ICAI has made it compulsory for certain audit firms that manage audits of listed entities, Insurance companies and Banks other than Co-operative banks to estimate their audit quality maturity model using AQMM.
Vanshika verma | Aug 12, 2025 |
ICAI Tightens Audit Standards: AQMM 2.0 Mandatory for Larger Firms
The Institute of Chartered Accountants of India (ICAI) has made it compulsory for certain audit firms that manage audits of listed entities, Insurance companies and Banks other than Co-operative banks to estimate their audit quality maturity model using AQMM.
Right now, the Audit Quality Maturity Model is compulsory for Firms auditing the below-mentioned entities, excluding the firms conducting only branch audits:
The scope of mandatory applicability of AQMM has now been extended and it has been made mandatory in a step-by step manner for the below-mentioned categories of firms:
| S. No. | Category of Firms | Date of Applicability (Peer Review conducted on or after) |
| 1 | Firms auditing the Holding/Subsidiary/Associates/Joint Ventures of the following entities:
a) A Listed Entity b) Banks other than Co-operative banks (Except multi-state Co-operative banks) c) Insurance Companies (But, Firms conducting only branch audits are excluded) | April 1, 2026 |
| 2 | Firms (referred to as ‘Practice Units’ in Peer Review Guidelines 2022) proposing to undertake Statutory Audit of unlisted public companies having: Paid-up capital ≥ Rs. 500 crores or Annual turnover ≥ Rs. 1,000 crores or Aggregate outstanding loans, debentures, and deposits ≥ Rs. 500 crores (as on March 31 of the preceding financial year) | April 1, 2026 |
| 3 | Firms (referred to as ‘Practice Units’ in Peer Review Guidelines 2022) proposing to undertake Statutory Audit of Entities that have raised funds from public/banks/financial institutions > Rs. 50 crores during the period under review or Any body corporate, including trusts, covered under public interest entities | April 1, 2027 |
The Centre for Audit Quality of ICAI is further coming out with a digitalized version of the AQMM soon to help the firms take up the evaluation and also to help the reviewers manage the reviews remotely.
While the model is still mandatory for a few sets of firms, the other firms can use AQMM for assessing their level and identifying the strengths and the concern areas for improvement.
To know complete details of the above, refer to the below mentioned pdf:
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