ICAI has announced on 19/07/2023 that the second phase of the Peer Review Mandate has been further deferred/postponed from 01/07/2023 to 01/04/2024.
During the 407th Council Meeting of ICAI held from 7th – 9th January 2022, it was decided to expand the Peer Review process to include more firms and timeline for Phase I to IV was announced.
Later, in the 420th Council Meeting held on 23rd – 24th March, 2023, it was decided to delay the implementation of the second phase of the mandate by three months, from 01/04/2023 to 01/07/2023. This was done because some Practice Units that were required to undergo Peer Review under the second phase were not prepared.
Recently, ICAI received requests from Practice Units stating that they were unaware of the Peer Review mandate and requested additional time to undergo the review. Taking this into consideration, in the 422nd Council Meeting held on 30th June – 1st July 2023, it was decided to further postpone the second phase of the Peer Review mandate. As a result, the new deadline for the second phase is April 1, 2024, instead of the previous deadline of July 1, 2023, for the following Practice Units:
i) Practice Units planning to conduct Statutory Audit for unlisted public companies with a paid-up capital of at least five hundred crores or an annual turnover of at least one thousand crores, or with outstanding loans, debentures, and deposits of at least five hundred crores as of March 31 of the previous financial year. These Practice Units must have a Peer Review Certificate.
ii) Practice Units providing attestation services and having 5 or more partners. These Practice Units must have a Peer Review Certificate before accepting any Statutory Audit.
Practice Units accepting Statutory audits on or before March 31, 2024, must ensure they possess a Peer Review Certificate at the time of signing effective April 1, 2024 and onwards.
The Council also decided that there will be no further postponement of the mandate and the Practice Units (CA Firms) must strictly comply with this revised deadline.
ICAI Announcement dated 19/07/2023: Second phase of Peer Review Mandate further deferred to 01/04/2024
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CA Abhinav Aggarwal is a qualified Chartered Accountant and ICAI member since 2010. He holds vast experience in Audit, Income Tax & GST and is a passionate writer on the CA profession and related topics.
ICAI has twice deferred the phase II, effectively from 01/04/2023 to 01/04/2024. The effective date of Phase III also is 01/04/2024 as announced by ICAI earlier. So what does this means? Whether Phase II & III both will have same effective date 01/04/2024 or Phase III also stands deferred by one year? ICAI needs to timely clarify this aspect as well.
Phase III mandate not yet announced by ICAI, however propsed impmentation date remains 01/04/2024. It’s likely that ICAI will review the date of mandate for Phase III only when announced.
Ignorance is not a valid reason for extension by ICAI. If some CA Firms (eligible Practice Units) were unaware of the requirements of Peer Review mandate (second phase) and requested additional time to undergo the review, rather they should have been ignored and left behind, as there was an extension of this deadline earlier also. Those who were ready by the timeline should have been allowed to go ahead. If there is some other reason than what’s stated in the ICAI Announcement, then my comment is null and void!