Institute of Chartered Accountants of India

The Institute of Chartered Accountants of India (ICAI) operates a quality assurance review system through its Peer Review Mechanism, established in 2002 and overseen by the Peer Review Board. The mechanism applies to firms performing assurance engagements and is being implemented through a phased peer review mandate. It assesses whether firms comply with applicable professional standards, ethical requirements, and quality control requirements.

Peer reviewers are experienced ICAI members who meet eligibility criteria and are subject to independence and confidentiality requirements. ICAI supports the operation of the system through peer reviewer training, peer review guidelines, implementation materials, frequently asked questions, and tools such as the Audit Quality Maturity Model. Practice units that meet the required standards are issued a Peer Review Certificate, while firms requiring improvement are provided with recommendations and may be subject to follow-up action.

ICAI also supports audit quality through technical guidance, continuing professional development programs, and implementation support for members. In 2024, ICAI issued Standards on Quality Management (SQM) 1 and SQM 2, which are based on International Standard on Quality Management 1 and International Standard on Quality Management 2. Their mandatory effective date has been deferred until further announcement, and the extant Standard on Quality Control 1 continues to apply.

Quality assurance arrangements in India also include audit quality inspections conducted by the National Financial Reporting Authority for auditors and audit firms within its jurisdiction and reviews conducted by the Quality Review Board. ICAI continues to play a central role in supporting audit quality and the implementation of quality assurance requirements within the jurisdiction.

ICAI is encouraged to continue strengthening the phased implementation of mandatory peer review, support firms in preparing for SQM 1 and SQM 2 implementation, and coordinate with the National Financial Reporting Authority and Quality Review Board to address recurring quality review findings and further align the jurisdiction-level quality assurance framework with SMO 1 requirements.

Current Status: Sustain

Under the Chartered Accountants Act, 1949, the Institute of Chartered Accountants of India (ICAI) is responsible for establishing initial professional development and continuing professional development requirements for Chartered Accountants.

ICAI operates a comprehensive education and training framework that includes entry requirements, the Chartered Accountancy curriculum, practical training, professional examinations, and continuing professional education. The New Scheme of Education and Training, implemented from July 1, 2023, covers the Foundation, Intermediate, and Final levels and is supported by study materials, online resources, practical training requirements, and assessment mechanisms.

ICAI states that, as an IFAC member body, it considers the International Education Standards in developing its entry requirements, Chartered Accountancy curriculum, practical training requirements, and assessments. ICAI also supports ongoing professional development through its Continuing Professional Education framework, Digital Learning Hub, online portals, and structured learning activities for members.

ICAI continues to monitor international education developments and participates in related consultations, including consideration of proposed amendments to International Education Standards on sustainability. While ICAI has incorporated significant elements of the International Education Standards into its education and training framework, full incorporation of all requirements in effect at the time of the assessment has not been demonstrated.

ICAI is encouraged to complete and document a comprehensive mapping of its entry requirements, curriculum, practical training, assessments, and continuing professional education framework against the latest International Education Standards, including recent sustainability-related revisions, and to address any remaining gaps identified through that process.

Current Status: Review & Improve

Under the Companies Act, 2013, auditing standards issued by the Institute of Chartered Accountants of India (ICAI) and prescribed by the relevant authorities are mandatory for statutory audits in India. ICAI, through its Auditing and Assurance Standards Board, is responsible for developing Standards on Auditing (SAs) for application in the jurisdiction.

ICAI develops SAs through an established due process that includes technical review, exposure drafts, stakeholder consultation, Council approval, and recommendation for notification where applicable. The SAs are developed through convergence with International Standards on Auditing issued by the International Auditing and Assurance Standards Board, with modifications to reflect national legal and regulatory requirements. Recent developments include the issuance of revised SA 800, SA 805, and SA 810, applicable for financial years beginning on or after April 1, 2024.

ICAI supports implementation through technical guides, implementation guides, guidance notes, checklists, continuing professional development programs, and other member resources issued by the Auditing and Assurance Standards Board. These resources cover areas such as audit documentation, auditor reporting, bank audits, audit of internal financial controls, and other practical implementation matters.

While ICAI has established robust processes for developing and supporting implementation of SAs, the standards in use are not fully aligned with ISA in effect at the time of the assessment. In particular, the corresponding Indian standard on group audits has not yet been revised to reflect ISA 600 (Revised), which became effective internationally for audits of financial statements for periods beginning on or after December 15, 2023.

ICAI is encouraged to continue its convergence efforts with the latest ISA, including timely resolution of remaining gaps such as group audit requirements, and to maintain strong implementation support for members as new and revised standards become effective.

Current Status: Review & Improve

The Institute of Chartered Accountants of India (ICAI) is responsible for establishing ethical requirements for Chartered Accountants under the Chartered Accountants Act, 1949.

ICAI issued its revised Code of Ethics, 13th Edition, applicable from April 1, 2026. Volume II of the Code is aligned with the 2024 Handbook of the International Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, with modifications to reflect national legal and regulatory requirements. ICAI supports implementation through its Ethical Standards Board, member communications, guidance materials, webinars, continuing professional development programs, and awareness activities on ethics-related topics.

ICAI also participates in the international standard-setting process by monitoring developments and responding to exposure drafts issued by the International Ethics Standards Board for Accountants. While ICAI has recently updated its ethical framework, the current 2025 Handbook has not yet been incorporated.

ICAI is encouraged to establish and document an ongoing process to incorporate new and revised pronouncements issued by the International Ethics Standards Board for Accountants, including timely consideration of the 2025 Handbook and future revisions, and to continue supporting members with implementation guidance and training.

Current Status: Review & Improve

In India, responsibility for public sector accounting standards rests with government authorities. The Comptroller and Auditor General of India, through the Government Accounting Standards Advisory Board (GASAB), develops Indian Government Accounting Standards and Indian Government Financial Reporting Standards for application at the Union and State Government levels.

The Institute of Chartered Accountants of India (ICAI) does not have direct responsibility for the adoption of public sector accounting standards. However, ICAI supports the development and implementation of public sector accounting standards through its Committee on Public and Government Financial Management. The Committee formulates comments on drafts of accounting standards for governmental bodies, including exposure drafts issued by the International Public Sector Accounting Standards Board, and undertakes activities to support public financial management reforms.

At the local government level, ICAI develops Accounting Standards for Local Bodies (ASLBs), which are accrual-based standards intended to support improved financial reporting by local bodies. ICAI has issued a suite of ASLBs, including standards on revenue, property, plant and equipment, budget information, first-time adoption of accrual-basis ASLBs, consolidated financial statements, and other reporting areas.

ICAI further supports implementation through technical publications, training programs, seminars, and educational materials for members and public sector stakeholders. While IPSAS are assessed as Not Adopted at the jurisdiction level, ICAI continues to use its best endeavors to support public sector accounting developments within the scope of its mandate.

ICAI is encouraged to continue supporting GASAB and relevant public authorities in advancing accrual-based public sector accounting, further promote implementation of ASLBs at the local government level, and continue raising awareness of International Public Sector Accounting Standards and related sustainability reporting developments.

Current Status: Sustain

Under the Chartered Accountants Act, 1949, the Institute of Chartered Accountants of India (ICAI) is responsible for establishing and operating an investigative and disciplinary system for its members.

ICAI’s framework includes the Disciplinary Directorate, Director (Discipline), Board of Discipline, and Disciplinary Committee, which are responsible for receiving complaints and information, conducting investigations, determining cases of professional or other misconduct, and imposing disciplinary actions where appropriate. Sanctions may include reprimands, monetary penalties, suspension, or removal from membership. Members may appeal disciplinary decisions to the Appellate Authority established under the Act.

ICAI supports the effectiveness of its investigative and disciplinary system by publishing legal framework materials, cause lists, orders, and findings, and by communicating ethical and professional requirements through member guidance and continuing professional development activities. Recent publicly available disciplinary orders indicate that the system remains operational.

In addition, the National Financial Reporting Authority, constituted under Section 132 of the Companies Act, 2013, has authority to investigate professional or other misconduct and impose sanctions on auditors and audit firms within its jurisdiction.

Accordingly, ICAI maintains an established and operational investigative and disciplinary system supported by a statutory framework and aligned with SMO 6 requirements.

ICAI is encouraged to continue enhancing transparency around disciplinary procedures and outcomes, monitoring the timeliness of case handling, and using disciplinary findings to inform member education, guidance, and continuing professional development activities.

Current Status: Sustain

Under the Companies Act, 2013, the Ministry of Corporate Affairs is responsible for prescribing accounting standards for companies in India. The Institute of Chartered Accountants of India (ICAI), through its Accounting Standards Board, develops accounting standards and recommends them for notification through the national regulatory framework.

India has implemented Indian Accounting Standards (Ind AS), which are substantially converged with IFRS Accounting Standards issued by the International Accounting Standards Board, with modifications to reflect national legal, regulatory, and economic circumstances. Ind AS are required for listed companies and certain other classes of companies, while other entities apply accounting standards notified under separate frameworks.

ICAI supports implementation through due process for developing and revising accounting standards, stakeholder consultation, implementation guidance, continuing professional development programs, certificate courses on Ind AS, technical publications, and member support activities. ICAI also monitors financial reporting quality through its Financial Reporting Review Board, which reviews general purpose financial statements for compliance with applicable accounting standards, disclosure requirements, and regulatory reporting obligations.

ICAI continues to participate in the international standard-setting process through review of exposure drafts and engagement with global and regional stakeholders. In addition, ICAI supports sustainability-related corporate reporting through its Sustainability Reporting Standards Board, including certificate courses and member resources on sustainability and Business Responsibility and Sustainability Reporting.

While India has achieved substantial convergence with IFRS Accounting Standards through Ind AS, IFRS Accounting Standards are assessed as Partially Adopted at the jurisdiction level because they have not been adopted as issued.

ICAI is encouraged to continue supporting further convergence of Ind AS with IFRS Accounting Standards, monitor and address remaining national modifications, and expand implementation support for members on new and revised financial and sustainability reporting requirements.

Current Status: Review & Improve