The Institute of Chartered Accountants of India (ICAI) will initiate penal action against chartered accountants if they violate its new tax audit limit guidelines that would be applicable from April 2026, its president said on Wednesday, calling on accounting firms and partners to abide by the rules.
The institute on Tuesday notified the guidelines limiting the number of tax audits that an accounting firm partner can take up in a year to 60.
“These guidelines are not advisory but mandatory in nature. We won’t hesitate to take action against those who violate these,” he told reporters.
As per the extant guidelines, while a single chartered accountant operating on his or her own can undertake up to 60 tax audits in a fiscal year, a partnership firm, as a whole, is allowed to conduct audits up to the combined limit of all its partners. This often results in senior partners using the quota of their junior colleagues after exhausting their own limit.
The latest ICAI move is aimed at discouraging a concentration of audit assignments with only a few senior partners at accounting firms and curb any anti-competitive conduct.
Tie-ups with IVCA, NSE arm
The audit body on Wednesday joined hands with the Indian Venture and Alternate Capital Association (IVCA) and an arm of National Stock Exchange (NSE) to bolster the country’s alternative capital markets ecosystem.
The key areas of cooperation between the audit body and the IVCA include setting up of joint expert groups on alternative capital issues and work towards standardisation of financial reporting frameworks. The MoU will remain in effect for five years from August 1.
Similarly, the ICAI’s areas of cooperation with NSE-IFSC include knowledge sharing and content contributions for educating members and stakeholders and conducting joint events, seminars and workshops on capital market developments and regulatory updates. The MoU with the NSE arm will be valid for two years starting August 1.
Dispute resolution centre
Separately, the ICAI launched on Wednesday an international centre for alternative dispute resolution (ADR) on commercial matters. Arjun Ram Meghwal, minister of state (independent charge) of law & justice, inaugurated the centre.
The ICAI International ADR Centre, he said, will serve as a “specialised institutional platform offering structured and time-bound arbitration, mediation, conciliation, and negotiation services that are professionally managed, process-driven, and globally benchmarked.”
He also said the apex body of chartered accountants has started a certification programme in the US and will launch another in the UK from August, as part of its capacity building mission.
Source #ET
