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In an interview with Business Standard, Vishesh C Chandiok, CEO, Grant Thornton Bharat, emphasises the need for clarity in defining Indian audit firms versus international ones, highlighting challenges and opportunities in the evolving audit landscape.
Regulators must bring in more clarity on what defines an “Indian” audit firm and an “international” outfit, Vishesh C Chandiok, chief executive officer of Grant Thornton Bharat, told Business Standard in an interview on Monday.
Indian agencies, including the National Financial Reporting Authority (NFRA), have been pushing for more and bigger homegrown audit firms to compete with global giants. To support them, the NFRA also announced setting up a regulatory sandbox for innovation in auditing techniques.
Chandiok said GT Bharat’s long-term strategy had been to become an Indian audit firm that could compete with global giants. But it would need acknowledgement from companies as well as regulators.
“If the demand side continues to say ‘no’, we prefer a global multinational firm versus an Indian multinational firm, and then we will not be able to achieve our destination,” he said.
“So the companies have to think about how they are going to support the demand of the Prime Minister and the ask of the regulators. I am not saying GT Bharat only, but support all the firms that are trying to challenge the status quo.”
He said these firms must be allowed to form multidisciplinary partnerships with technology, actuaries and MBAs and not just chartered accountants.
“The entire reason to move towards limited liability partnerships (LLPs) under the Companies Act was to permit multidisciplinary partnerships, and it says that. But the rules weren’t ever defined on who can be a partner,” he said.
Chandiok also highlighted that most companies today did not consider the audit business as their main growth strategy. “It’s not that the opportunity is not there in the market,” he said. “But are there enough high-quality companies there to be able to deliver zero-defect audits? The answer is ‘no’.”
On the other hand, there are “massive” opportunities on the consulting side of the business, be it regulatory consulting or crisis management, he said. Chandiok also said although it was too early to talk about the impact of artificial intelligence (AI), it was clear that there was going to be a “dramatic transition” in management consulting. “Management consulting is probably supposed to be one of the biggest impact industries because of the use of AI,” he said.
On hiring more people this year, Chandiok said that GT Bharat added 122 partners and directors in 2023. In 2024, “we expect that to accelerate dramatically”, he said.
The interview was published on 19th March, 2024.