ICAI shelves rollout of new quality management rules for audit firms

The Institute of Chartered Accountants of India (ICAI) has postponed the implementation of its Standards connected Quality Management (SQMs) for audit and assurance firms, The Economic Times has reported.

The caller framework, earlier slated to travel into unit connected 1 April, has been deferred “until further announcement”.

The determination was taken astatine a two-day gathering of the ICAI Council that concluded connected 31 March.

Until caller timelines are announced, the existing Standards connected Quality Control (SQCs) volition proceed to govern firms, the institute said successful a statement.

The postponement follows a disagreement betwixt ICAI and the National Financial Reporting Authority (NFRA) implicit the institute’s October 2024 notification of SQM 1 and SQM 2.

NFRA had objected, saying that nether the Companies Act, 2013, the authorization to notify specified standards rests with the cardinal government.

The ICAI had countered that SQM 1 and 2 are not auditing standards requiring authorities notification.

It described them arsenic prime absorption frameworks that laic down “essential modular operating procedures for accountancy firms”.

At the aforesaid time, the institute had indicated it would cooperate if the government, acting connected NFRA’s advice, chose to notify SQM 1 and 2 arsenic auditing standards nether the Companies Act.

The SQMs were meant to regenerate the SQCs that person been successful spot for audit firms since April 2009, with the modulation earlier planned from April 2026.

Tensions betwixt the 2 regulators had intensified aft NFRA, successful 2024, recommended to the Ministry of Corporate Affairs a revision of a cardinal auditing modular successful enactment with planetary requirements, contempt ICAI’s opposition.

Subsequently, ICAI went up and notified SQM 1 and SQM 2 without NFRA’s clearance.

In a abstracted development, the ICAI has acceptable timelines for the exertion of its guidance notes connected fiscal statements by non-corporate entities and constricted liability partnerships.

From the accounting play starting 1 April 2026, each specified entities volition beryllium required to travel these guidance notes.

Entities with yearly turnover supra Rs50m ($536,826) volition request to follow the guidance earlier, from accounting periods opening 1 April 2025. The notes are intended to enactment standardisation and rise the consistency of fiscal reporting.

"ICAI shelves rollout of caller prime absorption rules for audit firms" was primitively created and published by The Accountant, a GlobalData owned brand.

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