The Institute of Chartered Accountants of India (ICAI) has released a significant update regarding the Audit Quality Maturity Model (AQMM) v. 2.0. This announcement, dated April 10, 2026, specifically expands the scope of firms that must comply with these quality standards.

For firms navigating the complexities of modern auditing, staying ahead of these regulatory shifts is no longer optional—it is a core professional requirement.

Understanding the Key Change

The core of the announcement is a clarification and widening of the "Practice Units" covered under mandatory review. While the previous announcement (August 2025) set the foundation, this update ensures that auditors of subsidiaries and joint ventures of large entities are brought into the fold.

1. Mandatory Applicability (Effective April 1, 2026)

The AQMM v. 2.0 is now mandatory for firms auditing the following categories, provided they are already subject to Peer Review:

• Listed Entities: Auditing the main listed company or its holding, subsidiary, associate, or joint venture.
• Banking Sector: Auditing Banks (excluding co-operative banks but including multi-state co-operative banks).
• Insurance Sector: Auditing Insurance companies.
• Large Unlisted Public Companies: Firms auditing unlisted public companies that meet any of these thresholds in the preceding financial year:
  • Paid-up Capital: greater than equal to Rs 500 Crores
  • Annual Turnover: greater than equal to Rs 1,000 Crores
  • Debt/Deposits: Outstanding loans, debentures, or deposits greater than equal to Rs 500 Crores.

Important Carve-out: The mandate does not apply to firms that conduct only branch audits of the entities mentioned above.

2. The Second Phase (Effective April 1, 2027)

ICAI has also outlined a future horizon for smaller but high-impact practice units. Starting in 2027, the mandate extends to firms auditing:

• Entities that have raised over Rs 50 Crores from the public, banks, or financial institutions during the period under review.
• Anybody corporate, including trusts, classified as Public Interest Entities (PIEs).

Summary Table: Compliance Deadlines

Why This Matters

The AQMM v. 2.0 is designed to move beyond a "tick-box" compliance approach. It focuses on the maturity of a firm's internal processes—from human resource management to the adoption of advanced audit tools.

As the scope widens, firms must evaluate their current "maturity level" and invest in the right infrastructure. Whether it is through automating vouching processes or enhancing technical training, the goal is clear: elevating the standard of Indian audit quality on the global stage.