Amid the debate on allowing foreign audit firms like PwC and KPMG to practice in India, Corporate Affairs Minister Veerappa Moily has said his ministry will have to take a balanced view as domestic companies and even government is utilising their services.

"This is a issue we are constantly in dialogue with the ICAI. Their (multi-national audit firms) services are also useful. Every company is utilising their services even our own government is using.

"One, we want to use them, at the same time we want to bar them, that can't be done. We have to take a balanced view on this," Moily told PTI when asked whether the government was considering taking tough steps against multi-national audit firms allegedly carrying out surrogate practice in India.

Existing rules do not allow foreign firms to carry out auditing functions in the country. However, these firms have often been accused of indulging in surrogate practices. At present, these companies are allowed to carry out functions such as advisory, consulting and research only.

The big four audit firms which operate in India through associates include, PricewaterhouseCoopers, KPMG, Ernst&Young, and Deloitte.

When asked if the MCA was considering holding talks with Commerce Ministry asking it to consider opening up the sector at the WTO for foreign audit firms to practise in India, Moily refused to speak much and just said, "This is a larger issue".

The name of global audit major PricewaterhouseCooper's member-firm PriceWaterhouse came under the scanner for its role in the Rs 10,000-crore Satyam scam which rocked the corporate world in January last year.

In its 'Report on Operation of Multinational Network Accounting Firms (MAF) in India, which was submitted to the Ministry of Corporate Affairs in October 2011, accounting regulator ICAI had pointed out that state and central governments, and PSUs, were deliberately favouring chartered accountant companies having affiliations with multinational audit firms.

In certain cases, ICAI has said, joint venture agreements, MoUs, foreign collaborations agreements, shareholders agreements, private equity participations and side letters are exchanged between parties mandating appointment of auditors as prescribed by international parent.

In the same report, the Institute of Chartered Accountants of India (ICAI) has also accused the multinational accounting companies of violating the CA Act and asked for joint action by agencies, including the Reserve Bank India and the Corporate Affairs Ministry, to enforce compliance.

The Ministry is still studying the report.