NFRA Board approves overhaul of 40 auditing standards wef 1st April 2026 with a new name “Ind SAs”
NFRA has approved 38 out of 40 proposed standards on auditing (SAs), based on recommendations from ICAI for formal notification u/s 143(10) of the Companies Act, 2013.
However, ICAI has raised significant concerns regarding two key revisions—SA 600 and SA 299.
At NFRA’s meeting on 11-12 November, the 40 proposed standards, covering key areas like quality management (SQM 1 and SQM 2) and revisions to SA 600, SA 299, and the SA 800 series, were reviewed. NFRA approved most standards with minor amendments.
ICAI opposed Revised SA 600
(Group audits)
ICAI opposed the revised SA 600, which aligns with International Standard on Auditing (ISA) 600. The revised standard places full responsibility for the group’s entire financial statements on the group auditor, which ICAI argued is impractical for India’s complex audit landscape.
The revised SA 600 is intended to apply to public interest entities (PIEs) as defined under Rule 3 of the NFRA Rules 2018, with exceptions for public sector enterprises, banks, insurance entities, and their branches.
ICAI opposed Revised SA 299
(Joint audits)
Revised SA 299 requires mandatory cross-review of each auditor’s work.
ICAI believes this change could lead to unnecessary duplication of work and increased costs, particularly in complex joint audits.
Additional standards approved by NFRA
NFRA also approved the quality management standards (SQM 1 and SQM 2), which focus on quality management at the firm level.
Also, Audit files to be retained for 8 years instead of 7 years, in line with Indian regulatory requirements.
Nomenclature and timeline for implementation
NFRA plans to rename the standards on auditing as “Ind SAs” to align with India’s financial reporting standards (Ind AS). The new standards are scheduled to take effect from 1 April 2026, allowing audit firms and stakeholders ample time to familiarise themselves with the changes.
SIDDHARTH SIR
NFRA has approved 38 out of 40 proposed standards on auditing (SAs), based on recommendations from ICAI for formal notification u/s 143(10) of the Companies Act, 2013.
However, ICAI has raised significant concerns regarding two key revisions—SA 600 and SA 299.
At NFRA’s meeting on 11-12 November, the 40 proposed standards, covering key areas like quality management (SQM 1 and SQM 2) and revisions to SA 600, SA 299, and the SA 800 series, were reviewed. NFRA approved most standards with minor amendments.
ICAI opposed Revised SA 600
(Group audits)
ICAI opposed the revised SA 600, which aligns with International Standard on Auditing (ISA) 600. The revised standard places full responsibility for the group’s entire financial statements on the group auditor, which ICAI argued is impractical for India’s complex audit landscape.
The revised SA 600 is intended to apply to public interest entities (PIEs) as defined under Rule 3 of the NFRA Rules 2018, with exceptions for public sector enterprises, banks, insurance entities, and their branches.
ICAI opposed Revised SA 299
(Joint audits)
Revised SA 299 requires mandatory cross-review of each auditor’s work.
ICAI believes this change could lead to unnecessary duplication of work and increased costs, particularly in complex joint audits.
Additional standards approved by NFRA
NFRA also approved the quality management standards (SQM 1 and SQM 2), which focus on quality management at the firm level.
Also, Audit files to be retained for 8 years instead of 7 years, in line with Indian regulatory requirements.
Nomenclature and timeline for implementation
NFRA plans to rename the standards on auditing as “Ind SAs” to align with India’s financial reporting standards (Ind AS). The new standards are scheduled to take effect from 1 April 2026, allowing audit firms and stakeholders ample time to familiarise themselves with the changes.
SIDDHARTH SIR
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