India’s National Financial Reporting Authority (NFRA) has finalised and recommended a set of auditing standards to the central government that would be applicable for LLPs. 

This will be notified under Section 34A of the LLP (Amendment) Act 2021, which was passed to support the start-up ecosystem and improve the ease of doing business. 

The decision was made during the NFRA’s 19th board meeting following an earlier announcement about the meeting this month. 

The authority has decided to recommend 40 SAs and related SQMs for the audit of LLPs on a mutatis mutandis basis.  

Of the eight NFRA members attending the meeting, seven members, including representatives from the Comptroller and Auditor General, the Reserve Bank of India and two independent experts, supported the proposal. 

Members of the Institute of Chartered Accountants of India (ICAI) also supported the proposals.  

However, they expressed reservations about certain SQMs and specific SAs such as SA 299, SA 600 and SA 800, 810, 805.  

These concerns were reiterated from previous meetings regarding the SAs and SQMs. 

Upon approval by the Central Government, these standards are recommended to be effective from 1 March 2026.  

In September, the NFRA proposed revisions to SA 600, aligning them with International Standards on Auditing (ISA 600).  

The revised SA 600 addresses considerations necessary for auditing group financial statements. 

In the same month, the ICAI called for a halt to the revision of auditing standards by the NFRA. 

The ICAI raised concerns that the updated standards may impact small audit companies’ viability and argues that the international definition of a component auditor doesn’t apply in India.