ICAI to Limit Tax Audits to 60 Per Chartered Accountant Each Year from FY 2026–27

By Kishan Padsala

July 29, 2025

4 min read

A Move Towards Ethical Oversight and Global Standards

This change places India among the few countries to enforce a strict numerical limit on tax audits per auditor. While many international regulators focus on principle-based rules like partner rotation and independence guidelines, India’s method indicates a move towards volume-based oversight concerning tax audits.

Global Comparison of Audit Regulation:

United Kingdom: No limit on audit count, but mandatory partner rotation every five years for public interest entities. The Financial Reporting Council (FRC) monitors audit quality through regular inspections.
United States: The Public Company Accounting Oversight Board (PCAOB) mandates a five-year rotation for lead auditors of listed entities. While there is no cap, strict independence and quality control rules apply.
Australia: Lead auditors rotate every five years for listed entities. The Australian Securities and Investments Commission (ASIC) conducts oversight through routine audits.
European Union: Under Regulation (EU) No. 537/2014, there is no limit on audit count, but mandatory firm rotation every ten years for public interest entities, along with restrictions on non-audit services.
Philippines: Auditors can serve a listed entity for five consecutive years before taking a two-year cooling-off period.

In contrast, India’s cap of 60 audits per CA each year sets a clear limit on workload. The ICAI hopes this policy will encourage more professionals, especially younger ones, and reduce the concentration of audits among a select few.

Mixed Reactions from the Profession

While the reform has received praise for promoting ethical practices and fair work distribution, it has also raised concerns, particularly among small and mid-sized firms in rural and semi-urban areas.

Key Concerns Include:

Revenue Impact: Sole practitioners managing high volumes might see significant decreases in income.
Access to Services: MSMEs may struggle to hire auditors, particularly close to filing deadlines.
Client Prioritization: Chartered accountants may focus on larger clients to make the most of their limited audit quota.
Operational Delays: A smaller pool of available auditors might lead to service delays during peak demand periods.

Call for Readiness and Structural Change

The ICAI has urged firms to start internal restructuring, build partner capacity, and invest in digital tools to prepare for the changes in FY 2026–27.

At the same time, MSMEs and business owners are encouraged to begin audit engagements early in the financial year to avoid disruptions or availability problems.

Balancing Reform with Access

This cap aims to professionalize India’s audit ecosystem, improve audit quality, and reduce malpractice. Its success will depend on how well the profession responds to the operational changes and how inclusively it maintains access for smaller businesses.

India’s move to limit audit workload reflects a strong commitment to transparency and ethical governance while emphasizing the need for balancing reform with accessibility and economic diversity.

About the Author

Binoy Kumar B is a policy analyst and technology strategist with over twenty years of experience advising on regulatory innovation and business transformation. With a robust portfolio of patents in areas such as AI, blockchain, and quantum computing, he frequently writes about the intersections of governance, finance, and digital ecosystems, exploring how policy changes and technology influence economic outcomes.