The Institute of Chartered Accountants of India (ICAI) has deferred the implementation of Phase IV of the Peer Review mandate by one year, extending the deadline from January 1, 2026 to December 31, 2026.
The decision was taken by the ICAI Council and announced by the Peer Review Board through an official notification dated December 31, 2025.
Who Is Covered Under Phase IV of Peer Review
Phase IV of the Peer Review framework applies to specific categories of Practice Units (CA firms), including:
- Firms proposing to undertake audits of branches of Public Sector Banks (PSBs), where possession of a Peer Review Certificate is a mandatory pre-condition, and
- Practice Units rendering attestation services with three or more partners, for whom a Peer Review Certificate is required before accepting any statutory audit assignment
Revised Mandatory Implementation Date
As per the revised timeline announced by ICAI, Peer Review under Phase IV will now become mandatory from December 31, 2026, instead of January 1, 2026, giving firms additional time to prepare for compliance.
Relief for CA Firms and Practitioners
The deferment is expected to provide much-needed breathing space to CA firms, especially mid-sized and growing partnerships, allowing them to:
- Strengthen internal audit and documentation systems
- Complete Peer Review formalities without disruption to ongoing assignments
- Plan statutory audit engagements in line with revised regulatory timelines
Background
The Peer Review mechanism, introduced to enhance audit quality and professional standards, has been implemented in phases. Phase IV was the final and most extensive phase, covering firms undertaking sensitive and high-risk audit assignments.
What Practitioners Should Do Now
While the deadline has been extended, ICAI members are advised not to delay preparations and to initiate the Peer Review process well in advance to avoid last-minute compliance issues.
Official copy of the notification has been attached
CAclubindia
