The Institute of Chartered Accountants of India has introduced a strict cap of 60 tax audit assignments per chartered accountant starting from the financial year 2026–27, tightening oversight on how audits are distributed within partnership firms.
Effective April 1, 2026, the rule will apply to all audits conducted under Section 44AB of the Income-tax Act, 1961.
Under the new framework, the 60-audit limit will function as a cumulative annual cap for each CA, regardless of whether audits are signed individually or as a partner across one or multiple firms. This means that even if a CA is associated with several firms, they will still be allowed to sign only 60 tax audits in a financial year.
The ICAI has also made it clear that partners cannot pool, transfer, or use the unused audit quota of other partners.
The move aims to curb the long-standing practice in some large firms where audit capacity was inflated by including multiple partners—sometimes only in name—while most of the work was carried out by a few individuals.
A senior tax practitioner noted that the clarification effectively closes a major loophole and ensures accountability lies with the professional actually signing and executing the audit.
Chartered accountant Karim Lakhani said the decision is intended to boost transparency, improve accountability, and ensure a fairer distribution of work among professionals. He added that the change could create more opportunities for junior CAs and younger partners.
He also highlighted that monitoring is expected to become more robust through the UDIN system, which records details whenever a CA signs an audit report, enabling the institute to track audit volumes for each member with greater accuracy.
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