4th August 2006: Realising the threat posed by global management and consultancy firms like KPMG and Ernst & Young, the Governing body of Chartered Accountant professionals today allowed its members to set up management consultancy companies to help shore up capital and human resource.

Practicing CAs were so far not allowed to be equity holders in companies and could function in the capacity of individual or partnership firms.

Institute of Chartered Accountants of India (ICAI) president T N Manoharan said that its Council members had approved the proposal, keeping in mind the growing role of CAs in management consultancy as well as helps them compete with major consultancy firms who could employ huge capital and human resource.

Manoharan said professionals were increasingly being involved in management consultancy works and today's decision would help them expand to respectable levels.

"Gradually, decision-making jobs are being outsourced by managements to CAs. These include management decisions like deciding on debt or equity, methods to improve operational effiencies, interest swapping and cost effiency measures," he said.

He said that with the permission, CAs would get empowered to operate in a corporate form in specialised management subjects without the constraint of human resource or capital.

ICAI also introduced a new course on consultancy management which will be open to practicing CAs and based on self-assessment.