Just a few months after the issue of global accounting firms partnering with local firms in India to gain market access came to the fore, the Institute of Chartered Accountants of India (ICAI), the chief regulatory body for the accounting profession, has issued notices to 12 Indian accounting firms asking for details of any affiliations they might have with foreign accounting firms. The seven-member High Powered Committee of ICAI chaired by ICAI president Uttam Prakash Agarwal, which was formed exclusively to deal with the Satyam matter, has written to these firms asking them to furnish the relevant documents or details pertaining to their partnerships with global firms.

The issue first came to light after then president of ICAI Ved Jain had made a statement about KPMG's appointment for restatement of Satyam's accounts in January, saying that KPMG, being a foreign firm, is not allowed to carry out such activities here. Jain had then gone on to say that such partnerships should be discontinued since it gives foreign firms a window to operate in India. As per a resolution under the WTO, foreign firms are barred from carrying out auditing and assurance services in India. It was clarified only later that KPMG was hired as the management consultancy for Satyam and that its work would not involve any auditing or assurance services.

At present, multinational management consultancies, including the Big Four, have multiple Indian affiliates to help them carry out accounting and auditing business in the country. Deloitte, apart from its own auditing arm Deloitte Haskins and Sells, has CC Chokshi and Co., AF Ferguson and Co, Fraser and Ross, MCA and Co. and PC Hansotia as its local affiliates. Ernst and Young, on the other hand has SR Batliboi and Co. as its affiliates. BSR and Co. carries out the accounting and auditing business for KPMG while Lovelock and Lewes and RSM and Co. and Dalal and Shah serve as affiliates for PwC, apart from its own auditing division Price Waterhouse and Co. Grant Thornton, too, has the local firm Walker Chandiok and Co. as its India associate.