ICAI Plans CA Act Amendments to Help Build Larger Indian Accounting Firms
Proposed regulatory reforms could help Indian chartered accountancy firms expand through mergers, professional networks, multidisciplinary services and new business structures.
Table of Contents
Overview of the Proposed Reforms
The Institute of Chartered Accountants of India (ICAI) is considering changes to the regulatory framework governing chartered accountancy firms, with the broader objective of helping Indian accounting firms grow in size, capability and competitiveness.
The reported proposals focus on measured deregulation of certain non-assurance services, wider professional networks, new structures for firm aggregation, capital infusion and multidisciplinary professional services.
The objective is to explore how Indian CA firms can develop greater scale and provide a wider range of professional services while continuing to operate within the applicable regulatory framework.
1. Proposed Changes to the CA Act
The reported initiative includes examining changes to the Chartered Accountants Act and related regulatory arrangements to facilitate the growth of larger Indian accounting firms.
One area under consideration is measured deregulation relating to non-assurance services. The broader discussion also includes professional networks and structures that could allow firms to collaborate and expand their service capabilities.
What could the proposals cover?
- Review of restrictions affecting certain non-assurance services.
- Wider opportunities for professional networking.
- Structures that may support the aggregation of CA practices.
- Possible arrangements for capital infusion.
- Opportunities for multidisciplinary professional services.
The precise scope, conditions and safeguards will depend on the proposals eventually approved through the relevant decision-making and legislative processes.
2. Multidisciplinary Firms and Professional Networks
A key theme in the proposed reform exercise is enabling Indian accounting firms to build broader professional capabilities. Multidisciplinary arrangements can potentially bring different areas of professional expertise together to serve clients.
Businesses increasingly require a combination of services covering accounting, taxation, advisory, technology, risk management and other professional requirements. Larger networks may be better positioned to coordinate these services, subject to applicable professional rules.
Potential advantages
- Access to a wider pool of professional expertise.
- Improved capacity to serve large and complex clients.
- Greater collaboration between professionals.
- Potential opportunities to compete for larger assignments.
- More scope to invest in technology, training and specialist teams.
Any future framework would need to address professional independence, conflicts of interest, confidentiality and accountability where relevant.
3. CA Firm Mergers and Aggregation Structures
Firm aggregation is another important aspect of the reported proposals. Instead of operating entirely as small independent practices, firms may explore permitted ways of combining their capabilities, resources and service offerings.
The report states that approximately 1,000 CA firm mergers were recorded during February to August 2026. It also refers to 10 networking structures and 18 management consultancy companies registered during the same period.
| Reported development | Period or figure | Why it matters |
|---|---|---|
| CA firm mergers | Approximately 1,000 | Indicates activity around firm consolidation. |
| Networking structures | 10 | Reflects interest in professional collaboration. |
| Management consultancy companies | 18 registrations | Highlights activity in related professional service structures. |
These figures are reported developments and do not, by themselves, establish that every type of merger, network or business structure is permitted. Firms should evaluate applicable professional and legal requirements before implementing any arrangement.
4. Technology Enablement and CA Setu
Technology enablement is also part of the broader discussion on strengthening professional capabilities. Digital tools can help firms improve workflows, manage information and coordinate services across teams and locations.
The report mentions CA Setu in the context of technology-related initiatives. The practical implications will depend on the features, implementation and future developments of the initiative.
Why technology matters for CA firms
- Digitisation of routine administrative processes.
- Improved client communication and document management.
- More consistent internal workflows.
- Better coordination between teams and offices.
- Greater ability to invest in specialised services.
Technology can support growth, but firms must continue to address data security, confidentiality, professional standards and the quality of their services.
5. What Happens Next?
The reported process involves consideration of the proposals through the relevant institutional and legislative stages. A draft is expected to be prepared within approximately two months, according to the report.
Stage 1: Preparation of the draft
The proposed reforms are to be developed and considered through the relevant internal process.
Stage 2: ICAI Central Council
The proposals would be considered through the ICAI Central Council process.
Stage 3: Ministry of Corporate Affairs
Proposals requiring government consideration may proceed to the Ministry of Corporate Affairs.
Stage 4: Parliamentary process, if required
If amendments to the Act are necessary, the relevant legislative process, including Parliament where applicable, would need to be followed.
6. Potential Impact on Indian CA Firms
If the proposed reforms are approved and implemented, they could influence how accounting firms plan their growth, build teams and collaborate with other professionals. The actual impact will depend on the final rules and the conditions attached to them.
For small and medium-sized CA firms
Smaller firms may explore permitted networking or collaboration opportunities to strengthen their service capabilities. Any decision to merge or collaborate should be based on commercial objectives, professional obligations and legal requirements.
For larger firms
Larger firms may be interested in the potential for wider professional networks, specialist teams and the ability to serve clients with more complex requirements.
For CA students and young professionals
Changes in firm structures and service offerings could influence future career opportunities, particularly in specialist advisory, technology-enabled professional services and larger organisations. These outcomes remain dependent on how the proposals develop.
For clients
Larger professional organisations could potentially offer a broader range of coordinated services. However, clients should continue to assess professional competence, independence, service quality and the suitability of the engagement.
Frequently Asked Questions
The reported proposals include measured deregulation of certain non-assurance services, wider professional networks, firm aggregation structures, capital infusion and multidisciplinary services.
The developments described here are proposals. They should not be treated as enacted amendments unless and until the relevant legal process is completed and the applicable provisions come into force.
The report indicates an expected timeline of approximately two months for preparing the draft. This is not necessarily the date on which any reform would take effect.
Firm mergers and aggregation structures may help practices combine resources, develop specialist capabilities and pursue larger assignments, subject to applicable rules.
Potentially. If suitable arrangements are approved, smaller firms may be able to explore collaboration and growth opportunities. The actual benefits will depend on the final framework and each firm’s circumstances.
No. The reported discussion of multidisciplinary firms does not automatically change existing professional rules. Any arrangement must comply with the rules in force unless and until relevant changes are formally implemented.
Conclusion
The proposed reforms reflect a broader discussion about the future scale, structure and competitiveness of Indian accounting firms. Professional networks, mergers, multidisciplinary capabilities and technology enablement are among the areas being considered.
The next important steps are the preparation and consideration of the proposals, followed by any government or legislative action required. CA firms and students should distinguish between proposed changes and provisions that have formally come into force.
Keep following Lecturepedia for updates relevant to chartered accountants and CA students.
