A partner of an accounting firm will be allowed to take up a maximum of 60 tax audits in a year from FY27, Institute of Chartered Accountants of India (ICAI) president said.
This would discourage a concentration of audit assignments with only a few senior partners at accounting firms and curb any anti-competitive conduct, he indicated.
ICAI, in its council meeting in late May, decided to alter the guidelines and the new ones would be notified soon, he told ET.
As per extant guidelines, while a single chartered accountant operating on their 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 at these firms using the quota of their junior colleagues after exhausting their own limit.
“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,” he said.
“Moreover, a partner of a firm won’t be able to sign any tax audit report on behalf of any other partner,” he added.
However, this limit won’t include audit assignments arising out of certain legal requirements under the Income-Tax Act.
“It’s not about limiting a senior partner’s audit ability. The idea is to ensure that all auditors spend quality time on the audit assignments that they take up and deliver quality reports,” said a member of the ICAI’s Central Council.
Source #ET
