Big Win for Big 4: ‘Govt Audit’ Gives a Thumbs up to MNCs
Being part of MNC network does not mean firms are controlled by foreign entities, says MCA panel
Mumbai: The government should continue to allow multinational audit firms to operate in the country, said a ministry of corporate affairs panel report, a finding that should come as a relief for international networks, including the big four — Deloitte, PwC, EY and KPMG.
Being part of a multinational network and sharing global costs does not mean these firms are controlled or owned by international entities, said the committee of experts in a 200-page report, which ET has seen. The exercise followed complaints by Indian firms to the government that foreign ones were apparently flouting norms and gaining undue advantage. The fight between multinational auditing firms (MAFs) and Indian auditing firms (IAFs) intensified two years back in the wake of audit rotation mandated by the Companies Act 2013 that took effect on April 1, 2017. This led to several IAFs losing clients to multinational competitors. Foreign firms are not allowed in auditing, but MAFs operate through network firms that do not use the multinational’s brand name. MAFs have come under scrutiny as some got entangled in controversies such as those involving fraud-accused jeweller Nirav Modi or Infrastructure Leasing & Financial Services (IL&FS).
If this turns out to be the case, it will be the first quarter ever of higher online sales volume than offline sales.
CMR has also estimated that total smartphone sales during the quarter would be 36 million units, marking a 16% increase year-on-year.
Counterpoint Research’s Jain said October was a record month for smartphone sales, with online sales accounting for 42% of the total volume.
“There have been more offers available in the online channel, even as handset players were aggressive with onlineexclusive launches,” she said.
Last year, the festive season fell in the third quarter of the year, but this time the festive season began in October.
Jain said that in brick-and-mortar stores, festive offers would continue even post-Diwali.
This festive season, more users are looking for an upgrade and are moving to the higher price band. Jain said the ₹ 10,000-15,000 smartphone category would account for 30-35% of the overall sales during the ongoing quarter, driven by a faster replacement cycle.
IDC’s Joshi said a strong online exclusive portfolio driven by brands such as Xiaomi, Honor, Realme, Asus and OnePlus has resulted in a huge spurt in online sales. “E-commerce has really transformed the shopping experience with its focus now on consumer convenience and affordability,” she said.