The rotation of auditors mandated by the Companies Act of India and the restriction on the number of chartered accountants hired by a firm, has proved lucrative for commerce graduates.
With the Act become stringent, the audit firms are planning to hire commerce graduates and also have anticipated that the demand of hiring may shoot up to 16,000 in the next three years.
Companies Act of India
The new Companies Act has formulated the rule stating that all companies have to rotate auditors every 10 years, starting from April 2017, following which the bigger companies that have relied on one auditors for long time are forced to hire new auditors.
It is estimated that 75,000 people appear for the CA examinations every year, out of which 6,000 CAs join the workforce in the country annually with the number representing just 8% .
"India does not have as many CAs as required. So we are looking at commerce graduates, mainly focusing on students who have passed their CA inter (and failed in final)," says the head of accounting advisory services at one of the big four consultancies, requesting not to be named.
Hiring estimation and salary structure
The consultancy plans to hire about 3,000 people in the next three years, of which 70-80% will be commerce graduates and the salary offered will be between 30,000-60,000 per month, he added.
"The demand is huge and we are going to tier 3 and tier 4 cities as the graduates from smaller cities tend to stick around with us for at least three to four years." he said.
In India, the domestic players have enjoyed an upper hand in auditing. According to a recent research by Prime Database, about 781 firms audited 1,437 companies.
Although the top10 audit firms accounted for audit of as many as 524 companies, the big four: Deloitte, KPMG, EY and PwC between them audited about 27% of the 1,437 firms.
This is a much smaller share than in the developed markets, where the big four companies handle more than 70 percent of the top 500 listed companies.
Grant Thornton to hire 1000 candidates
It is also expected that these four firms are hiring about 12,000 people in the next three years. Walker Chandiok, the domestic partner of Grant Thornton has plans to hire 1,000 candidates in its auditing practice in the next three years ahead.
New auditing regulations has resulted in hiring fresh graduates, says Suresh Surana, Chairman of RSM Astute.
He also stated that: "However it is essential for the companies to conduct training even for the CA and a commerce graduate. Hence, we prefer to hire commerce graduates and MBA graduates who come with on the same price."