Page 161 - Quick Insights Book 2022

Ann. 14 – Revised Guidelines of Network

In order to overcome the above impediments, it is proposed members to view and take informed decision.
in Network Guidelines that firms may come together to form a b) Any firm of Chartered Accountants can become a part
Network and register the same with ICAI. By way of an internal of any one Alliance or any one Network. If it intends to
agreement amongst the firms, one of the firms will be chosen become part of one Alliance, it cannot become part of
as the Lead firm. This Lead firm will bid for professional work a Network, and vice versa.
on the basis of the combined strength and resources of the c) ICAI will consider providing a Model deed/ template.
Network firms. ICAI will consistently persuade the Government
and other appointing authorities to recognize strength of d) Name of Alliance/ Network should resemble name of
Network for the purpose of determining eligibility to bid for member-firms or a combination of acronym. Alliance/
tenders. While doing so, the ICAI will also emphasise merit Network should not bear the name of God/ Goddess/
points based on longevity of association of firms in Network. deity or which has no relationship with name of member-
The Network firms will then discuss and decide amongst firms. Descriptive names will not be allowed. Names
which smack of publicity will not be allowed. Names
themselves the strategy for execution of the professional which resemble any of the existing firms or network will
work. They may distribute the work on the basis of expertise not be allowed. Brand name should be owned only by
possessed by each firm or on the basis of geographical location Indian citizen who is resident in India.
of the firms or on any basis mutually acceptable to them. They
will also decide how the fees will be distributed amongst the e) Alliance/ Network will be permitted as joint ventures for
firms, on the basis of quantum of work, mandays and expenses specific assignments.
involved. Initially, some firms may sacrifice a bit in order to f) Documents such as deeds, MOUs, forms can be signed
sustain and continue in the Network, but gradually when work by the Managing Partner of each of the member-firms
starts flowing in, all firms are benefitted and can grow bigger. and need not be signed by all partners.
More importantly, when big professional work starts flowing g) Only firms and LLPs can become member-firms in
in, it will enhance the competency of all the firms in Network. Alliance/ Network. Individual practitioners are not
Capacity building and capability building will take care by itself. permitted to be part of Alliance/ Network.
The constituent firms will be at liberty to choose a different h) Every agreement, bye-law, MOUs, by whatever name
constituent firm as the Lead firm to represent the Network, called, must be filed with ICAI, without which registration
depending upon the specialism and expertise required for a will not be given.
particular assignment. i) The legal status of Alliance/ Network can be that of AOP
Since it may not be possible to obtain and execute work in the as recognised by tax laws. Alliance/ Network may open
name of Network, the lead firm will secure work and distribute bank accounts in its own name, obtain PAN and GST
tasks amongst the constituent firms, provided the client has registration.
no objection for such an arrangement. There are enormous j) Alliance/ Network can take up non-attest assignments
opportunities available other than audits allotted by authorities, in its own name, if work is so assigned.
and consultancy works, which can be executed under lead firm
concept. Once work starts to flow in the name of Network itself, k) Alliance/ Network may prepare a common balance sheet
lead firm concept can be done away with. and get the same audited.
ICAI may prescribe certain do’s and don’ts in the Internal l) Alliance/ Network can have website of its own.
agreements, so as to guide the firms as to what is permissible Appropriate guidelines will be prepared by Ethical
and what is not. The general prescription will be to adhere to Standards Board of ICAI.
ICAI’s Code of Ethics and Council Guidelines.
The issues that need to be kept in mind is wherever ANNEXURE I
appointment letter is taken in the name of Lead firm, other THE GUIDELINES FOR ALLIANCE
firms, though they may contribute in completing the assignment,
but may not be able to claim credit of experience of task. The 1. Short Title & Commencement
situation can be met by entering into Agreement listing out
respective tasks. (i) These guidelines may be called “The Guidelines
for Alliance‟, hereinafter referred as “The Alliance
5. Further guidance given by Council Guidelines‟.
Based on views collected at Outreach Programmes and based (ii) The Alliance Guidelines have come into force on
on deliberations within the Council, the Council has given the 9th February, 2021.
following further guidance to the members:
a) Firms might need to have detailed knowledge of other 2. Objective
firms to make up their mind as to with which firm they
will go for Alliance/ Networking. Therefore, data of firms 2.1 The objective of the Alliance Guidelines is to provide a
will be made available in the Self Service Portal for the framework for a firm of Chartered Accountants seeking
benefits from Alliance, such as:

148 Quick Insights on Professional Opportunities for Chartered Accountants