NFRA Approves 40 Auditing Standards and Quality Management Rules for LLPs



Quick Summary
The National Financial Reporting Authority (NFRA) has finalised and recommended 40 Auditing Standards (SAs) and related Standards on Quality Management (SQMs) to the Central Government. These standards, previously approved for company audits, will now apply to Limited Liability Partnerships (LLPs) on a similar basis. The recommendation received broad support from NFRA members and the ICAI, with some reservations noted by the ICAI regarding specific standards. If approved by the government, these new rules are set to take effect from 1st April 2026.

NFRA finalises and recommends Auditing Standards to the Central Government for notifying under Section 34A of LLP (Amendment) Act 2021

The Authority decides to recommend the 40 Standards on Auditing(SAs) and related Standards on Quality Management (SQMs)

NFRA Approves 40 Auditing Standards for LLPs

The National Financial Reporting Authority held its 19th Meeting on 25 November 2024 to finalise and recommend Auditing Standards to the Central Government for notifying under Section 34A of LLP (Amendment) Act 2021. The Authority decided to recommend the 40 Standards on Auditing (SAs) and related Standards on Quality Management (SQM), which were finalised by the Authority in its18th Meeting held on 11-12 November 2024 for audit of Companies, to be applicable to audit of LLPs on a mutatis mutandis basis.

Out of 8 Members of NFRA attending the meeting, 7 Members-the representatives of  CAG, RBI, two independent experts Prof Narayanswamy, Retired Professor IIM Bangalore, Professor Sanjay Kallapur, Professor ISB, Hyderabad, two Full-Time Members of NFRA and Chairperson of NFRA were in support of the proposal.  The ICAI members also supported the proposals (President, ICAI attended, and Chairman, ASB and Chairman AASB conveyed views vide email) except for their reservations to SQMs, SA 299, SA 600 and SA 800, 810, 805, as expressed by them earlier in respect of the SAs and SQMs finalized in the last meeting and which were reiterated in respect of the proposal under consideration for the audit of LLPs.

Upon the approval of the Central Government, these Standards are recommended to be effective from 1.04.2026.

FAQ :

The NFRA has finalised and recommended 40 Standards on Auditing (SAs) and related Standards on Quality Management (SQMs) to the Central Government for the audit of LLPs.

The standards are recommended to be effective from 1st April 2026, subject to the approval of the Central Government.

The recommendation was supported by 7 out of 8 NFRA members, including representatives from CAG, RBI, independent experts, and NFRA's full-time members and Chairperson. The ICAI members also supported the proposals.

The ICAI members expressed reservations, reiterating their earlier concerns regarding SQMs, SA 299, SA 600, and SA 800, 810, 805.

These standards are recommended for notifying under Section 34A of the LLP (Amendment) Act 2021.




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