1. Introduction
On April 10, 2026, a clarification is issued regarding the mandatory applicability of the Audit Quality Maturity Model (AQMM) version 2.0 for practice units subject to peer review.
This update clarifies that firms auditing holding companies, subsidiaries, associates, or joint ventures of listed entities, insurance companies, and banks, specifically those other than co-operative banks, except for multi-state co-operative banks, are now included in the mandatory scope. It is important to note that the model currently applies to firms auditing these types of entities, but firms engaged exclusively in branch audits remain exempt from these requirements.
2. Implementation Details for April 2026
Starting April 1, 2026, the mandatory review applies to firms auditing the specific group entities mentioned above, as well as firms proposing to undertake statutory audits for large unlisted public companies. For these unlisted public companies, the requirement is triggered if they meet certain financial thresholds as of March 31 of the immediately preceding financial year. These thresholds include having a paid-up capital of at least 500 crore rupees, an annual turnover of at least 1000 crore rupees, or possessing aggregate outstanding loans, debentures, and deposits of at least 500 crore rupees.
3. Future Expansion and Public Interest Entities
The scope of the AQMM v. 2.0 will widen further beginning April 1, 2027, to encompass firms proposing to audit entities that have raised more than 50 crore rupees from the public, banks, or financial institutions during the period under review. Additionally, this phase of the mandate will include firms auditing any body corporate, including trusts, that are classified as public interest entities.
This phased implementation ensures that practice units involved with significant public interest and high-value entities are progressively brought under the quality maturity framework.
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