The Ministry of Corporate Affairs (MCA) is likely to recommend deeper deregulation of non-assurance services offered by chartered accountant firms, while keeping audit and other assurance services under a strict regulatory framework, a person familiar with the matter told ETCFO.
This follows MCA’s internal discussions and stakeholder consultations, officials said.
The discussions are aimed at identifying areas where non-assurance services continue to face regulatory friction, even after recent changes.
The MCA’s deliberations are separate from, but aligned in direction with, the work of a high-level committee constituted under the Prime Minister’s Office (PMO) that is looking to frame a broader framework for the growth of large, globally competitive domestic multi-dimensional firms.
“The MCA’s consultations are independent and internally driven,” an official tracking the process said.
“However, the policy ideas emerging from MCA are likely to be put on the agenda as discussion pointers in the next meeting of the PMO committee, which is working on a broader framework for the Multi-Disciplinary Practice (MDP) of large-sized domestic firms that meet international standards.”
The PMO committee is chaired by former Reserve Bank of India Governor Shaktikanta Das and includes Sanjeev Sanyal, Member of the Economic Advisory Council to the Prime Minister, among others.
Clear regulatory boundary around audit
Officials said the MCA’s approach draws a firm distinction between assurance and non-assurance services.
“Audit and assurance involve public interest and trust. The safeguards there will remain non-negotiable,” the official said.
Audit and other assurance services will continue to remain under strict regulatory oversight, people aware of the matter said.
Non-assurance services reviewed separately
Services outside audit are being examined as a distinct policy category.
“The view is that consultancy, accounting and advisory services should not continue to be constrained by rules designed primarily for audit,” the official said.
According to a source familiar with the discussions, the MCA is assessing residual constraints affecting non-assurance services.
“There are still issues around aggregation structures, branding flexibility and the ability to scale multiple service lines,” the source said.
Segregation of service lines anchors policy thinking
Clear and demonstrable segregation between assurance and non-assurance businesses has emerged as the central anchor of the MCA’s policy thinking.
“The idea is to completely insulate audit, while allowing room for growth in areas where independence concerns do not arise,” the official said.
Any easing for non-assurance services would be conditional on strict separation from audit engagements, the official added.
ICAI reforms seen as baseline
Earlier, the Institute of Chartered Accountants of India (ICAI) approved amendments to the Advertisement and Website Guidelines under the 13th edition of the Code of Ethics, effective April 1, 2026.
The changes expand permissible advertising formats, allow detailed firm write-ups, and permit push notifications for non-exclusive, non-assurance services such as consultancy and accounting.
“These changes are being treated as a base layer, not the end point,” a source aware of the MCA discussions said.
Government signals need for broader movement
Officials said the government believes incremental easing alone may not be sufficient to help Indian firms build scale comparable to global peers.
“MCA is broadly comfortable with the direction ICAI has taken, but there is a sense that greater operational freedom in non-assurance services will be required if domestic firms are to build meaningful scale,” the official said.
ICAI points to statutory limits
An ICAI official, speaking on condition of anonymity, told ETCFO that the institute has exhausted the scope of reforms possible within its existing mandate.
“We have liberalised advertising guidelines and eased aggregation norms where permitted. Any further changes would require amendments to the Chartered Accountants Act, which is a legislative process under the Ministry of Corporate Affairs,” the ICAI official said.
Objective remains creation of domestic champions
Officials said the MCA’s engagement with stakeholders is aimed at capacity creation for Indian-owned multi-dimensional firms, while preserving a high-integrity audit regime.
“The objective is scale and competitiveness without compromising audit standards,” the official said.
Discussions are ongoing, and no final decisions have been taken, people aware of the matter said.
