The Institute of Chartered Accountants of India (ICAI) has widened the scope of mandatory applicability of the Audit Quality Maturity Model (AQMM) through a revised clarification to its earlier announcement dated August 11, 2025. The updated framework brings more audit firms and practice units under the AQMM review mechanism, particularly those auditing group entities of listed companies, banks, and insurance companies.
Under AQMM Version 2.0, the applicability has now been expanded in a phased manner starting from April 1, 2026, covering firms auditing large unlisted public companies, entities raising significant public funds, and other public interest entities. The move is aimed at strengthening audit quality, enhancing transparency and ensuring higher compliance standards across the profession.
Official copy of the notification has been attached
Widening the scope of mandatory applicability of the Audit Quality Maturity Model (AQMM)
In partial modification of the Announcement dated 11th August 2025 hosted at https://resource.cdn.icai.org/87517caq-aps1943.pdf a clarification is hereby issued that the mandatory AQMM review shall be applicable to Practice Units undertaking audits of the holding/subsidiary/associates/ joint ventures of listed entity or banks other than Co-operative banks (except multi-state co-operative banks) or insurance companies which are subject to Peer Review.
The Revised Announcement should therefore be read as under:
At present the Audit Quality Maturity Model is mandatory for Firms auditing the following entities excluding the Firms conducting only branch audit:
a) A Listed Entity
b) Banks other than Co-Operative banks (except multi-state Co-operative banks)
c) Insurance Companies
The scope of mandatory applicability of AQMM version 2.0 has now been widened and accordingly, AQMM v. 2.0 has been made mandatory in a phased manner for the following categories of firms:
| Sr. No. | Category of Firms | Date of applicability (Peer Review conducted on or after) |
| 1 |
Firms which are subject to Peer Review and auditing the a) A Listed Entity However, the firms conducting only branch audits are not to be covered. |
April 1, 2026 |
| 2 | Firms (referred to as 'Practice Units' in Peer Review Guidelines 2022') which propose to undertake a Statutory Audit of unlisted public companies having paid-up capital of not less than rupees five hundred crores or having annual turnover of not less than rupees one thousand crores or having, in aggregate, outstanding loans, debentures and st deposits of not less than rupees five hundred crores as on the 31st March of immediately preceding financial year. |
April 1, 2026 |
| 3 | Firms (referred to as 'Practice Units' in Peer Review Guidelines 2022') which propose to undertake the Statutory Audit of entities which have raised funds from public or banks or financial institutions of over Fifty Crores rupees during the period under review or of any body corporate including trusts which are covered under public interest entities. |
April 1, 2027 |
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