Why FDI policy stipulating joint audits may not help Indian firms

A section of the audit fraternity has been pitching with the govt to check the growing influence of international audit networks in Indian market

Last week the government amended the foreign direct investment (FDI) policy to stipulate ‘joint audits’ for the Indian investee company in cases where the foreign investor specifies a “particular auditor/audit firm having international network”. This is the first time that the government has brought in a rider relating to appointment of the auditor in the FDI policy. “The audit of such investee companies should be carried out as joint audit wherein one of the auditors should not be part of the same network,” the policy statement said.

Though this throws up new business opportunities for audit firms in India, the move