ICAI News – The Institute of Chartered Accountants of India has released an important announcement on 10 April, 2026 regarding the widening of the scope of mandatory applicability of Audit Quality Maturity Model. This update is crucial for CA firms, auditors, & practice units across India.
According to the official notification, ICAI has clarified that mandatory AQMM review will now apply to more categories of firms, especially those involved in auditing entities linked with listed companies, banks, and insurance companies.
What is ICAI Audit Quality Model & Why It Matters?
The Audit Quality Maturity Model (AQMM) is a framework introduced by ICAI to improve audit quality standards in India. It helps firms assess & upgrade their audit processes, ensuring transparency, & reliability in financial reporting.
Key Update: Expanded AQMM Applicability
Earlier, AQMM was mandatory only for firms auditing:
- Listed entities
- Banks (excluding co-operative banks, except multi-state co-op banks)
- Insurance companies
Now, ICAI has expanded AQMM applicability (AQMM Version 2.0) to include additional firms in a phased manner.
New Categories Covered Under ICAI Audit Quality Model
As per the revised announcement:
1. Firms under Peer Review auditing group entities
Firms auditing holding, subsidiary, associate, or joint venture entities of listed companies, banks, or insurance companies will now fall under mandatory AQMM (excluding branch audits).
2. Firms auditing large unlisted public companies
Practice Units planning statutory audits of companies with:
- ₹500 crore+ paid-up capital
- ₹1000 crore+ turnover
- ₹500 crore+ loans/deposits
3. Firms auditing entities raising public funds
Firms auditing entities that have raised ₹50 crore+ from public, banks, or financial institutions will also be covered.
Important Dates for AQMM Applicability
- From 1 April, 2026: Categories 1 & 2 become applicable
- From 1 April, 2027: Category 3 becomes applicable
Major Clarification by ICAI
ICAI clearly states that firms conducting only branch audits are not covered under AQMM applicability.
Impact on CA Firms & Audit Industry
This move by ICAI is a big step toward improving audit quality in India. It will:
- Increase accountability of CA firms
- Improve trust in financial statements
- Align Indian audit practices with global standards
This ICAI AQMM update is highly important for every CA student, auditor & firm. If you are planning to enter audit practice or already working in a CA firm, understanding AQMM applicability, ICAI guidelines & audit quality standards is now more important than ever.
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