The National Financial Reporting Authority ( NFRA ) has finalised and recommended the 40 auditing standards and quality management rules for the Limited Liability Partnerships ( LLP ). The standards are finalised in its 19th board meeting and cabinet clearance is pending. The 18th meeting held on November 11 and 12, 2024 has recommended revising the Standard quality control ( SCQ1 ) and Standard quality management ( SQM1 and SQM2 ) according to the global mandates.

Then, however, the ICAI conveyed its disagreement to the 4 proposals. In the 19th Meeting, all board members, including representatives from the Reserve Bank of India, the Comptroller and Auditor General of India, and the Institute of Chartered Accountants of India ( ICAI ), unanimously supported the majority of the proposals. Step by Step Guidance for Tax Audit & E-filing, Click Here However, the ICAI expressed concerns over three specific standards: SA 600, SA 800, and the standards on quality management.

These reservations align with the objections raised by the institute regarding these standards during the previous NFRA board meeting, particularly concerning their applicability to companies. According to the ICAI, the new standards might lead to the concentration of auditing to work for some big firms. It affects the comparative smaller firms.

Currently, the auditor of an LLP is required to conduct the audit and issue the auditor’s report in accordance with the auditing standards issued by the Auditing & Assurance Standards Board of ICAI. The NFRA has proposed extending auditing standards, originally designed for companies, to LLPs with necessary modifications to suit their specific auditing context. Once the standards get approved, it’ll come into effect from 1st April 2026.