Global accounting and professional services firms have raised significant concerns regarding the Institute of Chartered Accountants of India’s (ICAI) recent Exposure Draft on ‘Guidelines for Overseas Network’. Issued on June 6, 2025, the draft outlines stricter regulatory provisions for accounting networks, particularly those with international affiliations operating in India. The ICAI aims to bring greater transparency and accountability among firms functioning under a network model, especially where these networks span multiple jurisdictions.
The draft guidelines propose comprehensive disclosure requirements, including details of affiliations, revenue-sharing arrangements, operational structures, and governance models of both Indian and global networks. The ICAI has also recommended mandatory registration and periodic reporting obligations. According to the draft, such measures are necessary to ensure that Indian accounting firms operating under foreign banners do not circumvent existing professional standards and regulations.
However, several global firms have pushed back against these provisions, citing concerns around client confidentiality, operational feasibility, and the administrative burden the rules would impose. They argue that the granular level of information required under the draft could result in inadvertent breaches of client agreements and data privacy norms, especially where operations are integrated across multiple geographies. Moreover, they contend that the guidelines risk creating inconsistency with international regulatory standards, potentially affecting cross-border collaborations and service delivery.
Industry representatives have urged the ICAI to reconsider some of the more stringent provisions and engage in wider stakeholder consultation before finalising the rules. The firms have emphasised the need for a balanced approach that upholds professional integrity and transparency without stifling innovation or global integration. With the consultation window now active till 27 June 2025, the ICAI is expected to review feedback and may issue a revised set of guidelines after due deliberation.
Source – The Economics Times CFO
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