Big Shock for CAs: ICAI to Cap Tax Audits at Just 60 per Partner from FY27!:

Big Shock for CAs: ICAI to Cap Tax Audits at Just 60 per Partner from FY27! Starting from the financial year 2026-27, a partner in an accounting firm will be allowed to do a maximum of 60 audits in a year. According to the ICAI president, Charanjot Singh Nanda, ICAI is implementing this rule to prevent the senior partners from taking on too many audits and to prevent unfair practices. At a recent meeting in May, the ICAI council decided to change the current guidelines, and the new rules will be officially announced soon.

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Currently, an individual chartered accountant can do up to 60 tax audits in a year. But in a partnership firm, the total number of audits allowed is the sum of the limits of all the partners. Due to this, the senior partners at these firms start using the limits of their junior colleagues after they run out of their own limits. As per Nanda, now under the new guidelines, the limit of 60 audits will include all audit limits, whether they do it individually or as part of a firm. Also, a partner cannot sign a tax audit report on behalf of another.

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However, this 60-audit limit will not apply to some audit assignments that are required by law under the Income Tax Act. By limiting the audit assignments of a partnership firm, ICAI wants to make sure each audit is done carefully and reports are of good quality.