No Audit Exemption for Small Companies: ICAI Acts Against Rumors

The Winter Session of Parliament has concluded without introducing any amendments to the Companies Act proposing an audit exemption for small companies.

Recently, there were rumours spreading online that the Ministry of Corporate Affairs (MCA) was planning to remove the mandatory audit requirement for small companies with a turnover of up to Rs 1 crore. The news suggested that this change might be introduced during the winter session of the parliament through an amendment to the Companies Act. However, no such change has been introduced.

The rumour surfaced online on 25th November 2025, and on the same day, the Institute of Chartered Accountants of India (ICAI) President CA Charanjot Singh Nanda, along with other dignitaries, met with Shri Arjun Ram Meghwal, the Hon’ble Union Minister of Law & Justice. This shows ICAI’s vigilance and readiness in protecting the fundamentals of audit, transparency, and corporate governance.

Currently, all companies in India, including one-person companies and small private firms, must get their financial statements audited annually. This ensures transparency and accountability. Removing this requirement can lead to increased fraud risk, loss of investor trust and weakened governance.