ICAI Postpones Mandatory Implementation of SQM 1 and SQM 2
ICAI has deferred the mandatory implementation of SQM 1 and SQM 2 beyond 1 April 2026
The Institute of Chartered Accountants of India (ICAI) has postponed the mandatory implementation of SQM 1 and SQM 2. These two Standards on Quality Management were earlier scheduled to become compulsory from 1 April 2026 but ICAI has now said their effective date is deferred until further announcement.
Until then, the old standard, SQC 1 will continue to apply.
The decision was taken by the ICAI Council in its 451st meeting held on 30 and 31 March 2026. The announcement was issued by the Auditing and Assurance StandardsBoard (AASB) under the authority of the Council, and it was placed on ICAI’s official announcements page on 31 March 2026.
This is important because ICAI had formally issued SQM 1 and SQM 2 on 14 October 2024. At that time, ICAI had also said that the then existing standard, SQC 1, would remain applicable till the new standards became effective. ICAI had also released conforming amendments to other standards along with SQM 1 and SQM 2.
The older SQC 1 is not new at all. ICAI had issued it in October 2007, and it became effective for engagements relating to accounting periods beginning on or after 1 April 2009. It has been the main quality control standard for firms doing audits, reviews and other assurance or related services in India for many years.
The move to SQM 1 and SQM 2 was part of a bigger international shift. Globally, the IAASB replaced the earlier quality control model with a more risk-based quality management approach. According to IFAC, the international standards were issued in late 2020, and this change was meant to make firms more proactive, adaptable and stronger in monitoring quality.
IFAC also explains that ISQM 1 replaced ISQC 1, and that the new model puts more focus on governance, leadership, risk assessment and monitoring.
About ICAI
The Institute of Chartered Accountants of India (ICAI) is a statutory body established under the Chartered Accountants Act, 1949, responsible for regulating and developing the profession of chartered accountants in India, including education, standards setting and professional conduct.
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