
The Institute of Chartered Accountants of India (ICAI) has postponed the enforcement of Phases III and IV of its peer review mandate.
The new deadlines, which were initially set for 1 April 2024 and 1 April 2025, have now been extended to 1 July 2025 for Phase III and 1 January 2026 for Phase IV.
In a decision made during the 407th meeting in January 2022, the ICAI Council aimed to extend the scope of the peer review process.
The decision has been revised to address requests from practice units.
For example, in March 2024, the implementation of Phase III was postponed to January 2025.
The objective was to include more firms under this quality assurance initiative, which seeks to enhance professional standards in audit and attestation services.
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By GlobalDataHowever, based on an announcement dated 22 January 2025, after revising the schedule these phases will now commence six and nine months later than was planned.
Phase III applies to practice units conducting statutory audits for entities that have raised over Rs5bn ($58m) from the public, banks, or financial institutions.
Additionally, practice units with four or more partners offering attestation services are required to hold a peer review certificate before they can accept statutory audits.
Phase IV focuses on practice units conducting audits of branches of public sector banks and those with three or more partners providing attestation services.
These units must also obtain a peer review certificate prior to undertaking statutory audits.
Earlier in January 2025, the ICAI submitted its detailed suggestions for the comprehensive review of the Income-tax Act, 1961.
This move aligns with the Finance Minister’s budget speech for financial year 2024-25, which called for the simplification of tax legislation and a reduction in disputes and litigation.
A committee at Central Board of Direct Taxes level has been tasked with the review.