The Institute of Chartered Accountants of India (ICAI) has disclosed its intention to set a restriction on the number of tax audits a partner may endorse each year.

The Economic Times has reported that effective from fiscal year 2027 (FY27), each partner will be limited to a maximum of 60 tax audits.

ICAI president Charanjot Singh Nanda mentioned that this initiative seeks to avert the concentration of audit responsibilities among a select few senior partners.

The move is also designed to tackle potential anti-competitive behaviours within the accounting industry.

The resolution was reached during a council meeting conducted in late May, with new regulations expected to be released soon, according to the publication.

At present, while individual chartered accountants can manage up to 60 audits, partnership firms are permitted to conduct audits based on the total limits of all their partners.

This current system has resulted in senior partners frequently using the audit quotas of their junior colleagues after reaching their own thresholds.

Nevertheless, this cap does not encompass any tasks that stem from specific legal obligations under the Income Tax Act.

Nanda told the publication: “The limit of 60 would be the aggregate limit (under the new guidelines) in respect of all tax audits signed by a member, both in his individual capacity and as a partner of an accounting firm.

“Moreover, a partner of a firm won’t be able to sign any tax audit report on behalf of any other partner.”