Nidhi | Jun 28, 2025 |
Big Breaking: ICAI to Limit 60 Tax Audits per Partner
The Institute of Chartered Accountants of India (ICAI) has made significant change in the rules regarding audit limits. As per the announcement, ICAI is imposing a limit on the number of tax audits a chartered accountant partner can take per year. The new change will come into effect from the financial year 2026-27. With this new rule, the partner in the accounting firm will be able to do only 60 audits annually. The initiative aims at boosting work accountability in audit and promoting transparency within the organisation.
At present, the individual CA can undertake up to 60 tax audits per year. However, the CA Partnership firms have a benefit as the total number of audits allowed in such a firm is the sum of the limits of all the partners. After the implementation of this regulation, no matter if it is an individual CA or partners in an accounting firm, they will not be allowed to take more than 60 audits per year.
Earlier, senior partners used to handle most audit work. But under the new rules, one partner cannot sign tax audit reports for others. This strengthens individual accountability. Every partner must take part in the work while staying within the limit. However, this 60-audit limit will not apply to some audit assignments that are required by law under the Income Tax Act.
This new rule will discourage the senior partners from undertaking several audits. The senior partners at accounting partnership firms often use the limits of their junior partners when their 60-audit limits are exhausted. Therefore, to prevent such malpractices in tax auditing, the ICAI has come up with this change so that partners cannot use the limit of other partners.
The new rule ensures that the audit work is done properly because if a CA handles too many audits, the quality of work may suffer. The cap prevents CAs from being overworked and helps maintain professional standards.
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