India to Revise Law on Global Audit Firm Accountability

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Sept. 29 – The government is considering amending the laws to hold multinational audit firms accountable for negligence done by their affiliates in the country.

“You (the global network) can’t say that you are not responsible,” said Corporate Affairs Minister Salman Khurshid. “If an associate firm does something wrong… will the liability rest with the firm doing the audit in India or will the liability go back to the firm with the same name globally?”

Indian laws presently will not hold the multinational audit firm accountable should their local Indian affiliates be charged with wrongdoing. Typically, multinational accounting companies have business tie-ups with local firms in the country for audit projects and are considered a separate legal entity from their affiliates.

The Institute of Chartered Accountants of India also wants the law to be changed to reflect greater responsibility for multinational audit firms working in the country.