The Institute of Chartered Accountants of India (ICAI) has postponed the implementation of its Standards on Quality Management (SQMs) for audit and assurance firms, The Economic Times has reported.
The new framework, earlier slated to come into force on 1 April, has been deferred “until further announcement”.
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The decision was taken at a two-day meeting of the ICAI Council that concluded on 31 March.
Until fresh timelines are announced, the existing Standards on Quality Control (SQCs) will continue to govern firms, the institute said in a statement.
The postponement follows a disagreement between ICAI and the National Financial Reporting Authority (NFRA) over the institute’s October 2024 notification of SQM 1 and SQM 2.
NFRA had objected, saying that under the Companies Act, 2013, the authority to notify such standards rests with the central government.
The ICAI had countered that SQM 1 and 2 are not auditing standards requiring government notification.
It described them as quality management frameworks that lay down “essential standard operating procedures for accountancy firms”.
At the same time, the institute had indicated it would cooperate if the government, acting on NFRA’s advice, chose to notify SQM 1 and 2 as auditing standards under the Companies Act.
The SQMs were meant to replace the SQCs that have been in place for audit firms since April 2009, with the transition earlier planned from April 2026.
Tensions between the two regulators had intensified after NFRA, in 2024, recommended to the Ministry of Corporate Affairs a revision of a key auditing standard in line with international requirements, despite ICAI’s opposition.
Subsequently, ICAI went ahead and notified SQM 1 and SQM 2 without NFRA’s clearance.
In a separate development, the ICAI has set timelines for the application of its guidance notes on financial statements by non-corporate entities and limited liability partnerships.
From the accounting period starting 1 April 2026, all such entities will be required to follow these guidance notes.
Entities with annual turnover above Rs50m ($536,826) will need to adopt the guidance earlier, from accounting periods beginning 1 April 2025. The notes are intended to support standardisation and raise the consistency of financial reporting.
