The Institute of Chartered Accountants of India (ICAI) has announced revised criteria for the applicability of the Peer Review Mandate for Practice Units. This decision comes in response to requests from Practice Units and aims to ensure compliance and quality assurance in professional services.
Detailed Analysis
Phase II and III of the Peer Review Mandate cover specific categories of firms and practice units. For Phase II, it includes Practice Units intending to undertake statutory audits of unlisted public companies with significant financial thresholds or those providing attestation services with five or more partners. As per the revised mandate, these units must possess a Peer Review Certificate from July 1, 2024, with a grace period until June 30, 2024.
In Phase III, Practice Units planning to conduct statutory audits of entities raising substantial funds from public sources or those with four or more partners providing attestation services fall under scrutiny. Similar to Phase II, these units require a Peer Review Certificate, with the mandate becoming effective from January 1, 2025.
These revisions aim to enhance the quality and credibility of auditing and attestation services provided by Practice Units. By ensuring mandatory peer review, the ICAI seeks to uphold professional standards and maintain public trust in financial reporting.
Conclusion
The extension of the Peer Review Mandate by the ICAI reflects a commitment to strengthening regulatory oversight and promoting excellence in professional practice. Practice Units covered under Phase II and III must adhere to the revised criteria and deadlines to maintain compliance and uphold the integrity of their services. This proactive approach underscores the importance of continuous improvement and accountability within the accounting profession.
****
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
(Set up by an Act of Parliament)
Peer Review Board
The Institute of Chartered Accountants of India
16th March 2024
ANNOUNCEMENT
Revised Applicability of Peer Review Mandate (Phase II & III)
Considering the requests from Practice Units, the Council decided that the applicability of the Peer Review Mandate for the Practice Units covered under Phase II and III is extended as under:-
| Phase | Category of firms covered for Mandatory Peer Review | Date from which Peer Review is Mandatory |
| II | Practice Units which propose to undertake 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 deposits of not less than rupees five hundred crores as on the 31st March of immediately preceding financial year: For these Practice Units, there is a pre-requisite of having Peer Review Certificate.
OR Practice Units rendering attestation services and having 5 or more partners: For these Practice Units, there is a prerequisite of having Peer Review Certificate before accepting any Statutory audit |
01.07.2024 (Grace period allowed upto 30.06.2024) |
| III | Practice Units 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: For these Practice Units, there is a pre-requisite of having Peer Review Certificate.
OR Practice Units rendering attestation services and having 4 or more partners: For these Practice Units, there is a prerequisite of having Peer Review Certificate before accepting any Statutory audit. |
01.01.2025 |
