ICAI Announces Expansion of Mandatory Applicability of Audit Quality Maturity Model

ICAI Announces Expansion of Mandatory Applicability of Audit Quality Maturity Model

The Institute of Chartered Accountants of India (ICAI) has issued an announcement, dated April 10, 2026, regarding an increase in the mandatory implementation limit of the Audit Quality Maturity Model (AQMM) Version 2.0. This announcement has been issued under the ICAI Peer Review Guidelines 2022.

The announcement explained that earlier, the Audit Quality Maturity Model was mandatory only for certain firms, such as firms auditing listed entities, banks (except cooperative banks), and insurance companies. Now, ICAI has expanded its scope and made AQMM Version 2.0 mandatory for more firms in a phased manner.

According to this announcement, this rule will be applicable to those firms that audit the holding, subsidiary, associate, or joint venture of listed entities, banks (except cooperative banks), or insurance companies and that come under peer review. Additionally, those firms are also included that propose to conduct a statutory audit of large-sized unlisted public companies whose capital or turnover exceeds the prescribed limit. Also included are those firms that audit such institutions from which a significant amount of funding has been taken from banks or financial institutions.

According to this announcement, these provisions will be implemented in a phased manner. This rule will be applicable for first- and second-tier firms from April 1, 2026. For Category III firms, it will be implemented from April 1, 2027. That is, the main objective of this notice is to make the Audit Quality Maturity Model Version 2.0 mandatory for more firms so that the quality of audits can be improved and quality standards can be ensured in the firms coming under the Peer Review system.