The Institute of Chartered Accountants of India (ICAI) is planning a key reform that will limit the number of tax audits a partner in an accounting firm can undertake to 60 per year starting from the financial year 2026-27 (FY27). ICAI President Charanjot Singh Nanda announced that the move is aimed at discouraging audit concentration among a few senior partners and promoting equitable distribution of work.
Currently, while an individual Chartered Accountant can conduct up to 60 tax audits annually, partnership firms are allowed to undertake audits up to the combined limit of all their partners. This has led to a practice where senior partners sign off on the majority of audits, often exceeding individual thresholds by using quotas assigned to junior partners.
Under the proposed guidelines, ICAI will impose an aggregate limit of 60 tax audits per member, covering both audits signed in individual capacity and those as a partner in a firm. "This would prevent concentration of audit assignments and ensure that partners dedicate adequate time and attention to each engagement," said ICAI President Charanjot Singh Nanda.
In a significant shift, partners will also be barred from signing tax audit reports on behalf of other partners, strengthening individual accountability and professional responsibility. However, audits mandated under certain legal provisions of the Income Tax Act will remain outside the purview of this limit.
A Central Council member of ICAI clarified, "This isn't about restricting senior partners; it's about ensuring all auditors contribute equally and maintain the quality of audits."
The proposed reform was discussed and approved during ICAI's council meeting in late May, and the new rules are expected to be formally notified soon. The move is part of ICAI's broader effort to uphold transparency, enhance audit quality, and promote fair work distribution across accounting firms.
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