India moves to create domestic capacity to challenge hegemony of Big 4 audit firms
By Unnikrishnan | 10 Jun 2025
The Prime Minister’s Office (PMO) is reported to have discussed the feasibility of developing large domestic consulting capacity, building on globally accepted practices, to challenge the hegemony of the Big Four audit firms — Deloitte, PriceWaterhouse Coopers, Ernst and Young, and KPMG.
The issue of creating domestic capacity is part of the government’s initiative to attain self-reliance in the professional services industry as recommended by a committee of experts. The committee was constituted on 20 April 2018 on the directions of the Supreme Court, pertaining to the case S Sukumar versus the Secretary, Institute of Chartered Accountants of India.
In its report, the committee of experts has recommended that the audit firms and their networks be brought under the regulatory control of the secretary in the ministry of corporate affairs.
The Big Four audit firms also provide non-audit consultancy services by leveraging their vast global network.
The report recommends strengthening of the legal framework in order to promote development of domestic audit firms, an issue raised by the Supreme Court.
The committee scrutinised the networking arrangements of the Big Four audit firms to study their operational strategy and the legal structure, besides addressing serious concerns like conflict of interest and transparency of the non-audit services provided by the global audit firms and the concentration of market power.
Also, there is a global trend of creating independent regulatory structure for audit firms as most of these multinationals have failed in self-regulation, because of business compulsions.
The committee has recommended setting up of a National Financial Reporting Authority (NFRA) to facilitate a globally acceptable Indian audit system. It has also recommended measures to further strengthen the operation of NFRA to address current and expected challenges posed by audit firms and their networks operating in India.
The committee had joint secretary in the ministry of corporate affairs Anurag Agarwal, additional secretary in the Department of Commerce Sudhanshu Pandey and joint secretary in the Department of Industrial Policy and Promotion Ravinder as members.
