Accounting and Finance services are covered under Professional Services as per General Agreement on Trade in Services of WTO. Accounting and auditing services constitutes a major part of professional services covering wide range of activities like evaluation of reliability and credibility of financial information, Book keeping, financial audits and consultancy services on accounting and finance, etc.
Worldwide: $495 Billion revenue is generated from accounting services in the year 2017 (Global Accounting Services Industry Report, IBIS World).
- Indian accounting and finance services revenue has increased by 7% due to expanding Indian business sector.
- Industry anticipated to see 8% CAGR over 2016-2021 due to India’s rapid economic development, proliferation of digital accounting, and changing business regulations. Indian Accounting Services Market is expected to witness robust growth by 2022, owing to the factors such as growing professional workforce, increased Foreign Direct Investments, government initiatives to boost and attract businesses such as Start-up India, Make in India, Goods and Services Tax (GST), Digital India, etc.
- All such initiatives is expected to increase the demand of accounting and finance professionals for effective management of businesses TechSci Research (2017)
Role of Accounting Institutions in India
The Institute of Chartered Accountants of India (ICAI) is the national professional accounting body of India and is the 2nd largest professional Accounting & Finance body in the world.
- It recommends the accounting standards to be followed by companies in India to National Advisory Committee on Accounting Standards (NACAS).
It works closely with the Government of India in formulating and enforcing such standards and have association with many foreign bodies such as CICA, SOCPA, NZICA, SAICA, CPA, ICAEW, etc. promoting Indian accounting professionals worldwide.
ICAI have 2, 53,369 members – 2nd highest in the world. (Higher than Institute of Chartered Accountants in England and Wales (ICAEW) having 147,000 members).
The Institute of Cost Accountants of India (ICMAI) is the only licensing cum regulating body of Cost & Management Accountancy profession in India. The Institute of Cost Accountants of India (ICAI) has partnered in Memorandum of Understanding (MoU) with many leading Professional Accounting Bodies to enable Mutual Recognition, development and free movement of Management Accountancy professionals worldwide. It has partnered with –
- Institute of Management Accountants (IMA), USA
- Chartered Institute of Management Accountants, UK
- The Institute of Cost and Management Accountants of Oman
Indian Accounting and auditing professional are on high demand globally. To promote exports of Accounting, auditing and book keeping services from India, Indian Government has undertaken many initiatives. Some important initiatives include SEIS incentives under Foreign Trade Policy 2015-20 to services exporters. 5% of net foreign exchange earnings in the form of duty drawbacks to be given to accounting and professional services exporters. These duty scrips can be easily transferable and can be used for the payment of customs duty, GST to simplify accounting, Make in India to promote investments, Digital India to boost electronic transactions, Start up India, etc.
Earlier, accounting services were mostly traded in Mode 2 and 4 supply of services, but with the advent of digitalization and electronic transactions, many accounting services has become available in Mode 1 from India.
- Mostly, large Indian firms rely on Big Four auditors for their accounting and finance needs – EY, PWC, Deloitte and KPMG. However, some other leading players in the Indian Accounting Services Market are Essel Group, Khimji Kunverji & Co., Grant Thornton India LLP, Deloitte Haskins & Sells LLP, GIIP India Accounting & Advisory Pvt Ltd, Cohnreznick Professional Services Pvt Ltd, First Advantage Pvt Ltd, BDO India LLP (BDO India), Euler Hermes Services India Pvt Ltd etc.
References – Data and reports available in the public domain including Ministries Annual Reports and Data Statistics, IBEF Sectoral Reports, Department of Industrial Policy and Promotion (DIPP), RBI Handbook of Statistics on Indian Economy, Media & Industry Reports, Press Information Bureau (PIB), Union Budget 2018-19
Disclaimer – This information has been collected through secondary research and is available in the public domain. We are not responsible for any errors in the same.
Growth Drivers/Advantages for India
Rising international trade and financial activities has given more impetus to accounting and finance services around the globe. Large talent pool, technology and cost effectiveness are making India, a perfect destination for outsourcing accounting and financial services.
Similarly, from a domestic perspective, various factors such as rising investments from global players, increasing accounting professionals, new business models in the technology space, government initiatives, etc. are important growth drivers of Accounting and Finance services in India. Many renowned global companies setting up there financial and accounting shared services centres in India opening up new accounting and auditing profiles for the young talent pool in India. Business growth worldwide is creating huge growth prospects for Indian accounting/auditing professionals around the globe.
Technology upgradation, use of software’s, cloud computing and digital business processes have enabled the growth of accounting and finance services. Rising adoption of technology based audit process.
- 100% FDI through automatic route is allowed in Accounting and Book Keeping services to boost investments and exports.
- The implementation of Companies Act 2013 and convergence of New Indian accounting standards (Ind AS) with International Financial Reporting Standard (IFRS) has been a catalyst of growing demand for Indian Chartered Accountants in West Asia, Singapore and Australasia.
- Allowing foreign audit firms through ‘Joint Audit’ to work in collaboration with domestic audit firms. Opportunity for domestic firms to interact and compete on global scale.
- Schemes of Indian Government such as Start-up India, Make in India, Digital India, Skill India, etc. to attract investments and business in India thereby promoting accounting and finance services.
- The Institute of Chartered Accountants of India (ICAI) having 2, 53,369 members (Higher than Institute of Chartered Accountants in England and Wales (ICAEW) which has 147,000 members).
- Talent pool, niche expertise on cost, diverse portfolio offering and accounting standard makes India a hot destination for countries where Audit and Accounting is less developed.
- Indian Syllabus of Chartered Accountancy, Cost Accountancy and Company Secretary courses are aligned to the global standards creating tremendous opportunities for Indian accounting and auditing professionals to cater to the global markets.
- Large presence of shared services centres in India.