NEW DELHI: The Institute of Chartered Accountants of India (ICAI) will extend the mandatory peer review requirement to all component auditors undertaking public sector bank (PSB) branch audits starting in January 2027. The institute is also planning to bring down the time taken to dispose of disciplinary cases against chartered accountants (CAs) to 365 days from the current two to three years, ICAI president Prasanna Kumar D said.
The peer review requirement will now cover component auditors of PSBs, while principal auditors of PSBs are already covered under the existing framework.
The peer review process is already mandatory for firms doing statutory audits of listed entities, specified large unlisted public companies, entities that have raised over Rs 50 crore from the public or from banks/financial institutions, and public-interest entities. The requirement also applies to firms rendering attestation services with three or more partners.
ICAI currently has more than 1,000 peer reviewers, with the institute also considering extending peer review to auditors of private sector bank branches. The expanded exercise is expected to cover around 15,000 audit firms, according to ICAI officials.
Simultaneously, it has shifted the peer-review process from a manual system to a web portal, covering the process from application to issuance of the certificate.
“Earlier, 4,000-5,000 firms used to be certified by us, with the certification valid for three years. Now, even 30,000-40,000 CA firms can be peer reviewed in a year. To that extent, we have increased our capacity,” Kumar said.
On disciplinary action, around 400 cases are pending across ICAI’s disciplinary benches after the prima facie opinion has been framed and accepted. Kumar said the institute wants to bring the disposal time down to 365 days, without seeking changes to the existing disciplinary procedure for now.
“We are trying to dispose of these cases within one year. At present, we are not planning any procedural reforms. Instead, we are devoting our time and energy to achieving this target,” Kumar said.
ICAI’s disciplinary process begins with a complaint or information received by the institute. The matter is examined by the independent Directorate of Discipline, which seeks the respondent’s response and subsequently gives the complainant an opportunity to respond. Based on the responses and documents, the directorate prepares a prima facie opinion, which is then considered by the disciplinary bodies (the Board of Discipline or the Disciplinary Committee).
Kumar said the prima facie stage itself can take six to eight months because the respondent and complainant are given time to respond and submit documents.
“Prima facie opinion itself takes time by Act and not by the deeds of the institute. It takes six to eight months to form a prima facie opinion,” he said.
Source: The Financial Express
