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ICAI Peer Review Board Announcement / Guidelines for Practice Units 2025-26

ICAI Mandatory Peer Review Mandate (Phase IV) & Audit Quality Standards: Pre-requisite for Bank Branch Audits & Public Interest Assurance

Published: April 20, 20257 min readEffective: Enforced by ICAI Peer Review Board; Compliance Mandatory for Upcoming Audit CyclesDue: Application submission before undertaking statutory bank branch & assurance engagements
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Executive Regulatory Summary

The Institute of Chartered Accountants of India (ICAI), through the Peer Review Board, has enforced the Phase IV rollout of the Mandatory Peer Review Mandate. Holding a valid Peer Review Certificate is a strict statutory pre-requisite for all Practice Units undertaking statutory bank branch audits, public interest entity assurance, and multi-partner corporate attestations under SQC 1 standards.

Key Statutory Takeaways

  • Mandatory requirement: Practice Units must possess a valid Peer Review Certificate prior to accepting and signing statutory bank branch audits.
  • Phase IV coverage: Extends mandatory certification to all audit firms undertaking Public Sector Bank (PSB) branch audits regardless of partner count.
  • Attestation standards: Strict enforcement of Standard on Quality Control (SQC 1) and Audit Quality Maturity Model (AQMM) across member firms.
  • Pre-requisite for MEF empanelment: Bank branch audit allotment strictly linked to active Peer Review status on the ICAI portal.
  • Institutional excellence: ASGR and CO maintains active Peer Review Certification (#018Xxx) and Category XX Bank Audit empanelment.

Actionable Compliance Checklist for Businesses

Step-by-step advisory measures prescribed by ASGR and CO for immediate adherence:

1Verify your Practice Unit's Peer Review Certificate validity and expiry date on the ICAI Peer Review Board portal.
2Implement standardized SQC 1 documentation protocols for all statutory audit and tax audit working papers.
3Ensure all partners and qualified staff complete mandatory CPE hours in audit quality and electronic working paper preservation.
4Reconcile UDIN generations with bank branch audit appointments and statutory financial reports.
5Maintain institutional compliance files ready for peer reviewer inspection and sample file evaluations.

1. Regulatory Genesis: The Elevation of Audit Quality Standards by ICAI

Mandatory Attestation ConditionA Practice Unit cannot accept or sign statutory audit reports of listed entities, public interest corporations, or public sector bank branches unless it holds a valid Peer Review Certificate at the exact date of assignment acceptance.

The Institute of Chartered Accountants of India (ICAI) has progressively enhanced the regulatory architecture governing attestation and assurance services. The Peer Review mechanism, governed by the Peer Review Board of ICAI, assesses whether Practice Units have maintained proper quality control systems and adhered to the Technical, Ethical, and Professional Standards issued by the Institute.

Holding a valid Peer Review Certificate has shifted from being a best-practice credential to an unyielding statutory gateway requirement for audit empanelment and regulatory acceptance.

2. The Four-Phase Peer Review Rollout & Phase IV Bank Audit Mandate

To allow seamless institutional adaptation across sole proprietorships and multi-partner firms, ICAI structured the mandate into four progressive phases:

  • Phase I (Effective April 1, 2022): Mandatory for Practice Units auditing listed entities in India or abroad.
  • Phase II (Effective July 1, 2024): Extended to unlisted public companies (paid-up capital ≥ ₹500 Cr, turnover ≥ ₹1,000 Cr, or debt ≥ ₹500 Cr) and audit firms with 5 or more partners.
  • Phase III (Effective July 1, 2025): Enforced for entities with public/bank borrowings exceeding ₹50 Cr, Public Interest Entities (PIEs), and audit firms with 4 or more partners.
  • Phase IV (Effective December 31, 2026): Enforced for all Practice Units conducting statutory audits of Public Sector Bank (PSB) branches, regardless of partner count, as well as firms with 3 or more partners.

3. Alignment with SQC 1 and the Audit Quality Maturity Model (AQMM)

Peer review evaluations center strictly around Standard on Quality Control (SQC 1) — Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information. Reviewers scrutinize leadership responsibilities, ethical requirements, client relationship acceptance protocols, human resources, engagement performance, and internal inspection systems.

Furthermore, ICAI's Audit Quality Maturity Model (AQMM v1.0) provides a scoring matrix evaluating Practice Units on practice management, audit workflow digitisation, electronic working paper security, and human capital training.

4. Direct Linkage with RBI Bank Branch Audit Empanelment (MEF)

The Reserve Bank of India (RBI) and Public Sector Banks mandate that any firm selected for statutory branch audits or concurrent audit panels must reflect an active, validated Peer Review status on the ICAI portal during Multipurpose Empanelment Form (MEF) scrutiny.

Firms without a valid certificate or whose review is pending face automatic disqualification from branch audit allotments, underscoring the critical necessity of timely renewal submissions.

5. ASGR and CO's Commitment to Quality: Certified Peer-Reviewed Assurance

As an empaneled Category XX Bank Branch Audit firm and proud holder of a valid ICAI Peer Review Certificate (#018Xxx), ASGR and CO adheres strictly to SQC 1 compliance, partner-led reviews, and exhaustive digital working paper documentation.

Our multidisciplinary partners—CA Sanjay Agarwal (FCA, FAFD), CA Ghanshyam Sharma (ACA, CS, LLB, CMA), and CA Nitin Singrodia (FCA)—champion technical precision, transparency, and independence across every statutory audit, bank inspection, and corporate governance engagement.

Target Entities Governed by this Notification:
Chartered Accountant Practice Units & Sole ProprietorshipsBank Branch Statutory Auditors & Concurrent ReviewersAudit Committee Chairpersons & Corporate CFOsPublic Sector Banks & Financial InstitutionsCA Students & Articleship Trainees
CS
Advisory Published By

CA Sanjay Agarwal

Senior Partner & Co-Founder • B. Com, FCA, CS Inter, FAFD (ICAI)

ASGR and CO, Chartered Accountants (Peer Review Certified: #018Xxx)

Statutory Disclaimer: This publication is compiled by ASGR and CO solely for general informational and educational purposes to assist corporate clients and peers in understanding statutory notifications. It does not constitute legal, tax, or formal secretarial advice. Before acting upon any provisions, specific professional counsel should be sought.

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