The Institute of Chartered Accountants of India ( ICAI ) has requested the Ministry of Corporate Affairs ( MCA ) to review recent changes suggested by the National Financial Reporting Authority ( NFRA ) regarding audit standards.
The NFRA, a regulatory body supervising auditing and financial reporting, has proposed updates to important standards, especially SA 600, SA 299, and SQC1, which affect how audits are conducted for large groups of companies.
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The NFRA believes these changes will align India’s auditing practices with global standards, hugely improving audit quality, particularly for complicated group structures.
The ICAI disagrees, arguing that the proposed changes could lead to extra work and higher costs for auditors. ICAI feels the current standards have served well, although they agree there is room for improvement. They believe these important changes need more discussion and seek the MCA to carefully weigh all perspectives before implementing new rules.
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While the ICAI requests for a cautious approach, the NFRA maintains that updating the standards is essential for international alignment and for addressing issues observed in cases like Reliance Capital and IL&FS.
If approved by the MCA, these revised standards could be implemented as soon as April 2026, bringing India closer to global auditing practices and improving consistency and reliability in audits.
The differing views between ICAI and NFRA shows the need for collaboration among regulatory bodies to ensure that any changes to auditing standards protect the interests of businesses and the public.
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