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Reports: Indian firms moving away from revenue targets

A number of firms in India, including the Big Four, have removed or relaxed revenue targets for their audit partners, according to a report from The Economic Times.

Typically, partners at firms have ambitious revenue targets, with hitting these targets strongly linked to their financial compensation.

 Now, however, the report suggests a number of partners have been told they would either not have any revenue targets, or the link between their pay and the revenue they generate would be delinked.

The accounting industry has come under pressure internationally, following a number of high profile audit failures and accounting scandals. Notably PwC ‘s Indian firm was hit with a two year ban by the Securities Exchange Board of India (SEBI) from issuing audit certificates to any listed company in India after an investigation into the Satyam Computer services scam from nine years prior.

Removing the link between achieving high revenue and payment could be seen as a way of breaking some of the tension between a desire for sales and the need to challenge company figures and ask difficult questions.

According to the Economic Times, industry trackers confirmed the caution is the result of SEBI and the Reserve Bank of India coming down heavily on auditors in cases of financial fraud.

The International Accounting Bulletin has reached out to the Big Four in India and will update when responses are received.

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