ICAI Postpones Start-date of Phase IV of Peer Review Mandate scheduled for 1 January, 2026
ICAI has essentially provided a one-year extension for the final phase of its mandatory Peer Review framework, deferring the compliance requirements for firms.
The Institute of Chartered Accountants of India (ICAI), through its Peer Review Board has announced the deferment of Phase IV of the Peer Review Mandate, which was initially set to come into force from 1 January 2026.
The Board has now decided to extend the implementation timeline by exactly one year, making it effective from 31 December 2026 onwards.
The decision was informed to the public through an official announcement dated 31 December 2025.
Phase IV covers two key categories of practice units (firms) that shall be covered for mandatory peer review:
- Practice Units which propose to undertake audits of branches of Public Sector banks: For these Practice Units, there is a pre-requisite of having Peer Review Certificate.
- Practice Units rendering attestation services and having 3 or more partners: For these Practice Units, there is a pre-requisite of having Peer Review Certificate before accepting any Statutory audit.
The extension was reportedly decided upon following the Council’s year-end meeting and now offers firms with an additional window to complete their review process to align themselves with the mandatory framework.
The Peer Review Mechanism is essentially an evaluation process through which a Chartered Accountant (CA) firm’s audit and assurance work is independently reviewed by another qualified firm or practitioner who is known as the ‘Peer Reviewer’.
The process was introduced by ICAI to enhance competency of professionals and to strengthen the confidence of the public in the quality of audits conducted by CA firms.
The current shift of the beginning date by a year allows practitioners ample time to revise their internal controls, strengthen audit documentation and ensure readiness for regulatory inspection before the final phase (Phase IV) becomes enforceable.
The ICAI had earlier in January 2025, postponed the rollout of Phase II and Phase IV to 1 July 2025 and 1 January 2026, respectively with this deferment marking another shift to address concerns raised by members.
With the revised deadline of 31 December 2026, the Institute aims to achieve a smoother transition into the new compliance requirement, all across the profession.
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