The Peer Review Mechanism of ICAI is no longer limited to audits of listed entities, banks, and insurance companies. With the launch of Audit Quality Maturity Model (AQMM v.2.0), ICAI has widened the mandatory scope in a phased manner starting April 1, 2026.
This has direct implications for signing of financial statements for FY 2024-25 (31.03.2025) and FY 2025-26 (31.03.2026). Firms must now carefully examine:
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Entity type (listed / unlisted / group entity / JV / foreign subsidiary)
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Thresholds of turnover, paid-up capital, and borrowings
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Date of signing (before or after April 1, 2026)
Applicability Framework
For signing 31.03.2025 financials (FY 2024-25):
Peer Review + AQMM mandatory only if firm audits:
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Listed entity (equity/debt listed in India)
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Banks (other than co-operative banks, except multi-state co-operative banks)
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Insurance companies
No threshold of turnover or capital applies yet.
Group entities (subsidiaries/JVs) not covered yet.
For signing 31.03.2026 financials (FY 2025-26):
(A) If report signed before 01.04.2026 → Old rules apply
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Only listed entities / banks / insurance audits require Peer Review.
(B) If report signed on or after 01.04.2026 → Expanded scope applies
Category 1 – Group Entities (Holding / Subsidiary / Associate / JV)
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If firm audits Holding, Subsidiary, Associate, or JV of:
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Listed entity (India listed)
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Banks (other than co-operative banks, except multi-state co-op banks)
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Insurance companies
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Branch audits are excluded.
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Foreign subsidiaries/JVs are covered only if parent is an Indian listed / Indian bank / Indian insurer.
Category 2 – Large Unlisted Public Companies
Peer Review mandatory if any one threshold is met as on 31st March of preceding year:
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Paid-up share capital ≥ ₹500 crores, OR
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Turnover ≥ ₹1,000 crores, OR
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Aggregate loans + debentures + deposits ≥ ₹500 crores
(Standalone financials, not consolidated, unless specified otherwise in law).
Category 3 – Effective from 01.04.2027 (future)
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Entities raising funds > ₹50 crores from public / banks / FIs during period under review, OR
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Any body corporate (including trusts) classified as a Public Interest Entity (PIE).
Year-wise Matrix
| FS Year | Signing Date | Entity Type | Thresholds / Conditions | Peer Review Mandatory? |
|---|---|---|---|---|
| 31.03.2025 | Anytime (before 31.03.2026) | Listed entities | Listing in India | ✅ Yes |
| Banks | All banks except co-op (but incl. multi-state co-op) | ✅ Yes | ||
| Insurance Companies | N/A | ✅ Yes | ||
| Large unlisted public companies | Thresholds not yet in force | ❌ No | ||
| Holding/Subsidiary/Associate/JV of listed/bank/insurance | Not applicable yet | ❌ No | ||
| 31.03.2026 | Before 01.04.2026 | Same as above | Same | ✅ Yes only for listed / banks / insurance |
| 31.03.2026 | On/After 01.04.2026 | Listed entities / Banks / Insurance | N/A | ✅ Yes |
| Holding/Subsidiary/Associate/JV of listed/bank/insurance | Parent is Indian listed / bank / insurer | ✅ Yes | ||
| Unlisted public companies | Paid-up cap ≥ ₹500 Cr OR Turnover ≥ ₹1,000 Cr OR Borrowings (loans+debts+deposits) ≥ ₹500 Cr | ✅ Yes | ||
| Private companies / foreign companies without Indian listing | N/A | ❌ No |
Special Cases
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JV of Indian Listed + Foreign Company → Covered (because of Indian listed linkage).
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Indian subsidiary of a foreign listed company → Not covered (unless foreign parent also listed in India).
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Indian audit of foreign subsidiary/JV of Indian listed company → Covered (group linkage test satisfied).
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Private companies → Not covered (unless they themselves become listed or fall under PIE category from April 2027).
Disclosure Requirements
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ICAI will now publish AQMM Levels (v.2.0) on its website for all peer-reviewed firms.
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Peer Review Certificates will explicitly mention the AQMM Level alongside validity.
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Clients, regulators, and banks will increasingly rely on this publicly available benchmark for firm selection.
Practical Checklist for Firms
Before accepting / signing an audit engagement for FY 2024-25 or 2025-26, check:
Step 1 – Identify entity type
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Listed (equity/debt) in India?
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Bank / Insurance company?
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Unlisted public company?
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Holding/Subsidiary/JV of listed/bank/insurance?
Step 2 – Check thresholds (for unlisted public co.)
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Paid-up capital ≥ ₹500 Cr?
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Turnover ≥ ₹1,000 Cr?
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Borrowings (Loans + Debentures + Deposits) ≥ ₹500 Cr?
Step 3 – Signing date
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Before 01.04.2026 → Old rules apply
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On/after 01.04.2026 → Expanded rules apply
Step 4 – Cross-border check
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If foreign group entity → Ask: is the Indian parent listed / bank / insurer? If yes → Covered. If no → Not covered.
Step 5 – Documentation
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Ensure valid Peer Review Certificate (with AQMM level) is available and uploaded with NFRA / SEBI / RBI filings wherever applicable.
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Maintain internal checklist and minutes of peer review compliance before signing audit reports.
Conclusion
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For 31.03.2025 FS → Peer Review applies only to listed entities, banks, and insurance audits.
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For 31.03.2026 FS →
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If signed before 01.04.2026 → old rule continues.
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If signed on/after 01.04.2026 → expanded scope applies: group entities of listed/bank/insurance + large unlisted public companies (₹500 Cr/₹1,000 Cr thresholds).
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Foreign JVs/subsidiaries are covered only if tied to Indian listed/bank/insurance companies.
With ICAI publishing AQMM levels publicly, Peer Review will now act as a quality seal, and firms must prepare well in advance to ensure compliance.
