What lies in the Future for CA Practice?
CA. Ramya C
“Your network is your networth” – Porter Gale
This statement couldn’t be more appropriate for the changing times that the Chartered Accountant community is facing. The profession calls for transformation in the ever-evolving world. The Revised Guidelines for Networking of Indian CA Firms is a push in the right direction.
Why is Networking needed?
Given the need for expansion and capacity-building, Networking is the most effective and efficient way to fulfill the purpose. It leads to not only pooling of resources, but also sharing of best practices between the firms to ultimately improve the quality-of-service multifold.
Networking also provides opportunities for presence in multiple states in India, thus increasing the exposure and enhancing the profession. Firms that are limited to practicing in taxation and audit can diversify themselves to newer areas providing many more opportunities to scale up.
It is important to understand the intricacies of the guidelines provided by ICAI including the advantages of practical implementation of networking. Register for FREE to this Exclusive Live Webinar Series on “Evolution of CA Firms” (Networking to Expand your Practice) to get an in-depth understanding of various facets of networking & alliances.
Registration Link: https://opto.tax/liveseries3-b
What are the Models of Networking prescribed by ICAI?
Through its Revised Guidelines, ICAI has suggested two approaches for networking of CA practices.
(A) Approach I:
Different firms coming together to form an Alliance with a new name (of the Alliance) and continuing to practice independently.
The firms involved can showcase as an Alliance to the world.
Firms are free to carry on practice as independent firms.
Alliance may direct the best practices to be followed by individual constituent firms.
Firms belonging to one Alliance can’t be allowed to become Associates of another Alliance or Network.
All firms in Alliance can apply for empanelment separately as individual firms.
(B) Approach II: Different firms come together to form a Network with a new Network name and practice in the name of firms belonging to Network. This approach is further sub-divided into two models/options:
Network of firms in the existing model by practicing in the individual firm name.
Firms are bound by internal integration agreement. The network’s decision prevails upon other firms.
Firms belonging to one Alliance can’t be allowed to become Associates of another Alliance or Network
All firms belonging to Network can apply for empanelment, separately as individual firms.
Network of firms with a Lead firm acting on behalf of constituent firms of Network.
Firms can have an internal agreement recognising one of the firms as the lead firm. The individual firms can carry on practice as independent firms.
The lead firm and its constituents can’t be allowed to become Associates of another Network or Alliance.
The lead firm is entitled to apply for empanelment in its own name, but it will be on behalf of the entire Network by way of internal agreement. Other constituent firms cannot apply.
Finding the most appropriate model becomes imperative to a successful network/alliance as well as for the individual firm. Given the ever-changing environment, networking can be considered a major boon to the profession as it opens up avenues such as multi-disciplinary firms also which allows networking with other professionals such as advocates.
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