Important Update: ICAI Rolls Out Phase IV of Peer Review Mandate
The Institute of Chartered Accountants of India (ICAI) has announced that Phase IV of the Peer Review Mandate is effective from January 1, 2026.
Under Phase IV of the Peer Review Mandate, Certain accounting or auditing firms must have a valid Peer Review Certificate before undertaking assignments:
- If a firm wants to audit branches of public sector banks, they cannot do it without this certificate.
- If a firm provides attestation services and has three or more partners, they must get this certificate before accepting any statutory audit work.
If the practice unit falls under any of the aforesaid categories, Peer Review compliance must be ensured well in time to avoid disruptions in accepting or continuing audit assignments.
Consequences of Non-Compliance
(According to Clause 25 (2) of the Peer Review Guidelines 2022):
- If someone fails to comply, then they may attract disciplinary action under applicable provisions of the Chartered Accountants Act, 1949.
- It may also prohibit eligibility for specific audits, professional empanelments and regulatory positions.
Practising Units are encouraged to start or finish the Peer Review process as soon as possible. Doing so helps them stay fully compliant with professional rules and avoid any restrictions on their work.