NEWS

The Indian government is expected to finalise a comprehensive plan to revamp regulations, aiming to foster the establishment of large audit and consultancy firms similar to the Big Four, by the March 2026 quarter, reported the Economic Times, citing sources.

Recent statistics reveal that fewer than 1% of accounting firms in India have more than ten partners, highlighting the need for such reforms.  

"Necessary regulatory changes could be finalised this fiscal year," one of the sources said.   

A committee headed by corporate affairs secretary Deepti Gaur Mukerjee is currently examining the regulatory obstacles that prevent domestic firms from scaling up and is expected to publish its findings shortly.  

The government intends to first modify relevant legislation, with regulatory adjustments to follow, it added.   

Current data from the Institute of Chartered Accountants of India (ICAI) shows that out of 100,138 registered chartered accountancy firms, only 459 have more than ten partners, and just 13 have more than 50 partners.  

These 459 firms employ about 15% of the total workforce in the sector, which includes partners and paid assistants.  

The top 13 accounting firms employ approximately 7% of the total number of partners and paid assistants, with 1,349 partners and 11,543 paid assistants among them.   

Discussions on facilitating the growth of large domestic firms were held last month by Shaktikanta Das, principal secretary-2 to the prime minister, along with senior officials from the finance and corporate affairs ministries.  

A strategy is being considered to relax rules and regulations to enhance the consolidation of local accounting firms, the news publication said.   

This also includes the creation of multidisciplinary partnership firms, enabling easier partnerships with global firms, and allowing these firms to operate and market themselves more freely.   

The Association of Chartered Certified Accountants (ACCA) has commented on the Financial Reporting Council (FRC) market study, which scrutinises the audit and reporting obstacles encountered by small and medium-sized enterprises (SMEs).   

The study, part of a campaign by the FRC, seeks to understand the difficulties practitioners face when auditing SMEs and to explore the decision-making process for SMEs that choose to procure audit services, even when exempt.   

ACCA has shown its support for the FRC's initiative to lessen the reporting burden on these enterprises, emphasising the need to focus on the complexity of business operations rather than company size.  

It has recommended that the FRC engage in a formal consultation process, particularly regarding the International Standard on Auditing for Audits of Financial Statements of Less Complex Entities.   

The association has also called for the provision of clear, practical examples to aid in the application of UK ISAs, the Revised Ethical Standard 2024, and ISQM (UK) 1, alongside guidance for the use of emerging technologies such as AI analytics.   

Furthermore, ACCA suggests the development of sector-specific guidance, educational resources, and collaboration with software providers to facilitate the adoption of technologies and to fill existing knowledge gaps.  

ACCA urges the FRC to produce materials that distinguish the benefits of financial audits from the administrative burdens they may impose.   

Additionally, the association points to the need to bridge the expectation gap within the UK audit market, advocating for better audit work among the investors, public, and SMEs themselves.  

ACCA UK and EEMA policy lead Joe Fitzsimons said: “We believe securing stakeholder feedback in the UK would show the depth of feeling that exists across the profession about the need for a more scalable, proportionate approach to auditing and reporting on smaller and less complex businesses.”  

The Public Company Accounting Oversight Board (PCAOB) in the US has submitted a proposal for a 20% salary reduction for its board members amid scrutiny, reported the Wall Street Journal.   

As part of its preliminary 2026 budget, the move comes under the scrutiny of the Securities and Exchange Commission (SEC) concerning current compensation levels.  

This proposed budget, which aims to reduce overall spending by roughly 10% from the expected 2025 figures, was recently presented to the SEC; the news publication said, citing sources.   

The 2023 spending by the PCAOB is projected to be below the $399.7m budget approved by the SEC in 2024.  

The current salary structure, which has been in place since 2009, sees the PCAOB chair earning nearly $673,000, with the other four board members each receiving close to $547,000.   

Despite the proposed cuts, these salaries would still be considerably higher than those of the SEC commissioners.  

The SEC has the authority to propose changes to the PCAOB's preliminary budget by 31 October, with subsequent votes by the audit board and the SEC scheduled for November and December, respectively.   

These plans may be subject to change due to the potential impact of the government shutdown.  

The development coincides with the SEC's assessment of candidates for the PCAOB board, as the terms of current members are set to expire between 2025 and 2028.   

The SEC retains the power to remove board members at its discretion.   

The rationale behind the proposed budget cuts may be to address the SEC's considerations for expenditure reductions.   

Paul Atkins, who became head of the SEC in April 2025, has been vocal in the past about his view that PCAOB board member salaries are disproportionately high. 

The Financial Reporting Council (FRC) has released its 23rd Key Facts and Trends (KFAT) report, which provides an analysis of the UK accountancy and audit sector.   

The document includes contributions from 31 firms that audit Public Interest Entities (PIEs) and spans a range of firm sizes, highlighting demographic trends and market dynamics.  

It outlines a pattern of growth within the accountancy profession, with an increase in the number of members in the UK and internationally, despite a slight dip in student enrolment.   

The audit market is experiencing consolidation, with fewer registered audit firms, though there is an uptick in the number of FTSE 350 audits conducted by firms beyond the Big Four.  

The accountancy bodies in the UK and Republic of Ireland now have 408,000 members, with a global membership surpassing 623,000.   

In these regions, the growth rate for membership stood at 0.8% and 1.1% on a global scale between 2023 and 2024.   

Conversely, student numbers have seen a decline of 0.3% in the UK and Republic of Ireland and 0.1% globally.  

Despite the decline in student numbers, there has been a substantial 12.3% increase in students achieving membership status worldwide.   

The report also notes that the number of individuals obtaining the Audit Qualification in 2024 decreased slightly to 1,800.   

The AAT saw a decrease in membership by nearly 2%, in contrast to a more than 30% increase in student numbers in the UK and Republic of Ireland.  

In terms of revenue, the ACCA led with an income of £258.8m in 2024, with CIMA and ICAEW experiencing the most substantial income growth.  

The report also reflects a continued decline in the number of statutory audit firms, with a 24.9% decrease over the past five years.  

Earlier in October 2025, the FRC initiated a public consultation on proposed improvements to its Audit Enforcement Procedure, seeking stakeholder feedback on amendments designed to provide timely regulatory responses, open until 9 January 2026.