India

The statutory framework for accounting and auditing in India is primarily established under the Companies Act, 2013, together with sector-specific legislation and regulations issued by relevant authorities. The Ministry of Corporate Affairs (MCA) is responsible for the administration of company law and the notification of accounting and auditing standards.

The financial reporting framework for companies is established under the Companies Act, 2013. Accounting standards are developed by the Accounting Standards Board of the Institute of Chartered Accountants of India (ICAI) and recommended to the Central Government for notification. Specified classes of companies, including listed companies and certain other public interest entities, are required to apply Indian Accounting Standards (Ind AS), which are substantially converged with International Financial Reporting Standards (IFRS). Other companies apply Accounting Standards (AS) based on their size, nature, and regulatory classification.

Statutory audit requirements are established under the Companies Act, 2013. Audits of companies are required to be conducted in accordance with auditing standards prescribed by the Central Government under Section 143(10) of the Act. Auditing standards are developed by the Auditing and Assurance Standards Board of the Institute of Chartered Accountants of India and are based on International Standards on Auditing (ISA), with modifications to reflect national legal and regulatory requirements.

India maintains a differential reporting framework based on the nature and size of entities. Listed companies, large unlisted companies, banks, insurance companies, and other specified public interest entities are subject to enhanced financial reporting, auditing, and regulatory oversight requirements. Smaller entities may apply simplified financial reporting frameworks and are generally subject to less extensive regulatory requirements.

The National Financial Reporting Authority (NFRA), established under the Companies Act, 2013, is responsible for the independent oversight of auditors and audit firms undertaking audits of specified classes of companies and other public interest entities. Other entities remain subject to oversight arrangements established through the Companies Act, 2013 and the professional regulatory framework.

The accountancy profession in India is regulated through a combination of statutory professional accountancy organizations and independent public oversight arrangements. The Institute of Chartered Accountants of India (ICAI) regulates Chartered Accountants under the Chartered Accountants Act, 1949, while the Institute of Cost Accountants of India (ICMAI) regulates Cost and Management Accountants under the Cost and Works Accountants Act, 1959. In addition, the National Financial Reporting Authority (NFRA), established under the Companies Act, 2013, exercises independent oversight over auditors and audit firms responsible for the audits of specified classes of companies and other public interest entities.

Regulation of Chartered Accountants

The Institute of Chartered Accountants of India (ICAI) was established under the Chartered Accountants Act, 1949 and is responsible for regulating the Chartered Accountancy profession in India. ICAI is responsible for establishing initial and continuing professional development requirements, maintaining the register of members, issuing certificates of practice, establishing ethical and technical requirements for members, and operating investigation and disciplinary mechanisms for professional misconduct.

ICAI also plays a central role in the development of accounting and auditing standards through its standard-setting boards, including the Accounting Standards Board and the Auditing and Assurance Standards Board. Accounting and auditing standards developed by ICAI are recommended to the Central Government for notification under the Companies Act, 2013 and other applicable legislation.

Individuals seeking admission to the profession are required to complete prescribed educational requirements, practical experience, and professional examinations. Members are awarded the Chartered Accountant designation and may obtain a certificate of practice to provide audit and other professional services. Statutory audits of financial statements under the Companies Act, 2013 may only be conducted by Chartered Accountants holding a valid certificate of practice.

ICAI operates a Peer Review Board that conducts peer reviews of firms undertaking assurance engagements to assess compliance with professional standards and quality management requirements. In addition, NFRA is responsible for the inspection and oversight of auditors and audit firms undertaking audits of entities within its jurisdiction. The Securities and Exchange Board of India requires statutory auditors of listed entities to hold a valid peer review certificate issued under ICAI’s peer review framework.

Regulation of Cost and Management Accountants

The Institute of Cost Accountants of India (ICMAI) was established under the Cost and Works Accountants Act, 1959 and is responsible for regulating the Cost and Management Accountancy profession in India. ICMAI is responsible for establishing entry and continuing professional development requirements, maintaining the register of members, issuing certificates of practice, establishing ethical and professional requirements, and operating investigation and disciplinary mechanisms for professional misconduct.

Individuals seeking admission to the profession are required to complete prescribed educational requirements, practical experience, and professional examinations. Members are awarded the Cost and Management Accountant designation and may obtain a certificate of practice.

Members of ICMAI are authorized to provide cost accounting and cost audit services, including cost audits required under the Companies Act, 2013. Statutory audits of financial statements, however, may only be conducted by Chartered Accountants holding a valid certificate of practice.

ICMAI operates a Peer Review Board to assess compliance with professional and technical standards among practicing members. The Quality Review Board, established under the Cost and Works Accountants Act, 1959, is responsible for reviewing the quality of services provided by Cost and Management Accountants and making recommendations to enhance professional quality and compliance.

Independent public oversight of the audit profession in India is established under the Companies Act, 2013, which provides the legal framework for the regulation and oversight of auditors and audit firms.

The Companies Act, 2013 designates the National Financial Reporting Authority (NFRA), constituted by the Government of India in 2018, as the independent audit oversight authority for specified classes of companies and other public interest entities.

Under the Companies Act, 2013, NFRA is responsible for monitoring and enforcing compliance with accounting and auditing standards, overseeing the quality of audit services, conducting inspections of auditors and audit firms within its jurisdiction, investigating professional or other misconduct, and imposing sanctions where appropriate. NFRA also has authority to make recommendations to the Central Government on matters relating to accounting and auditing standards and policies.

Statutory auditors in India are required to be members of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate of practice issued by ICAI. While NFRA exercises independent oversight over auditors and audit firms within its jurisdiction, ICAI continues to regulate its members through the establishment of professional and ethical requirements, continuing professional development requirements, and investigation and disciplinary mechanisms.

Quality assurance review arrangements operate through a combination of oversight and professional review mechanisms. NFRA conducts inspections of audit firms and auditors responsible for the audits of entities within its jurisdiction. In addition, ICAI operates a Peer Review Board that conducts reviews of firms undertaking assurance engagements to assess compliance with professional standards and quality management requirements.

The Quality Review Board (QRB), established under the Chartered Accountants Act, 1949, is responsible for reviewing the quality of services provided by members of ICAI and making recommendations to improve audit quality and professional standards. The Securities and Exchange Board of India requires statutory auditors of listed entities to hold a valid peer review certificate issued under ICAI’s peer review framework.

NFRA is not a member of the International Forum of Independent Audit Regulators (IFIAR).

The Institute of Chartered Accountants of India (ICAI)

The Institute of Chartered Accountants of India (ICAI) was established in 1949 under the Chartered Accountants Act, 1949 as the statutory professional accountancy organization responsible for regulating the Chartered Accountancy profession in India.

Membership in ICAI is mandatory for individuals seeking to use the Chartered Accountant designation, which is protected under the Act. ICAI is responsible for establishing initial and continuing professional development requirements, maintaining the register of members, issuing certificates of practice, establishing ethical and technical requirements, and operating investigation and disciplinary mechanisms for professional misconduct.

ICAI plays a significant role in the development of the profession through its standard-setting activities, including the development of accounting, auditing, assurance, and sustainability-related guidance. Through its Accounting Standards Board and Auditing and Assurance Standards Board, ICAI contributes to the development of standards that are subsequently considered for notification by the Central Government under applicable legislation.

ICAI also operates a Peer Review Board that conducts reviews of firms undertaking assurance engagements to assess compliance with professional standards and quality management requirements. In accordance with the Companies Act, 2013, only members of ICAI holding a valid certificate of practice are authorized to conduct statutory financial statement audits.

In addition to its national role, ICAI is a founding member of the International Federation of Accountants and is a member of the Confederation of Asian and Pacific Accountants and the South Asian Federation of Accountants.

The Institute of Cost Accountants of India (ICMAI)

ICMAI was established in 1944 and was constituted as a statutory professional body under the Cost and Works Accountants Act, 1959. ICMAI is responsible for regulating the Cost and Management Accountancy profession in India.

Membership in ICMAI is mandatory for individuals seeking to use the Cost and Management Accountant designation and engage in regulated cost accountancy practice. ICMAI is responsible for establishing initial and continuing professional development requirements, maintaining the register of members, issuing certificates of practice, establishing ethical and technical requirements, and operating investigation and disciplinary mechanisms for professional misconduct.

ICMAI supports the development of professional standards and guidance related to cost accounting, management accounting, sustainability reporting, and cost audit practice. It also operates a Peer Review Board to promote compliance with professional standards and quality requirements among practicing members.

Members of ICMAI are authorized to provide cost accounting and cost audit services, including cost audits required under the Companies Act, 2013. Statutory audits of financial statements, however, may only be conducted by Chartered Accountants holding a valid certificate of practice.

In addition to its national role, ICMAI is a member of the International Federation of Accountants, the Confederation of Asian and Pacific Accountants, and the South Asian Federation of Accountants.

Quality assurance review arrangements in India operate through a shared framework involving the National Financial Reporting Authority (NFRA), the Quality Review Board (QRB), and the Institute of Chartered Accountants of India (ICAI).

NFRA conducts inspections of auditors and audit firms undertaking audits of entities within its jurisdiction, including listed companies and other specified public interest entities. The QRB conducts quality reviews of audit services and may review audit firms outside NFRA's direct oversight. ICAI operates a Peer Review Board that conducts periodic reviews of firms undertaking assurance engagements to assess compliance with applicable professional standards and quality management requirements.

Together, these arrangements provide coverage of statutory audits across the jurisdiction and incorporate key elements of SMO 1, including mandatory quality reviews, independent oversight for public interest entity audits, and linkages to investigative and disciplinary processes.

Accordingly, a quality assurance review system aligned with the requirements of SMO 1 is established and operational in India and is assessed as Adopted.

ICAI also issued Standards on Quality Management (SQM) 1 and SQM 2, which are converged with ISQM 1 and ISQM 2; however, their mandatory effective date has been deferred and SQC 1 remains in force pending implementation.

Current Status: Adopted

Initial professional development and continuing professional development requirements in India are established by the Institute of Chartered Accountants of India (ICAI) and the Institute of Cost Accountants of India (ICMAI) under their respective enabling legislation.

ICAI establishes education, practical experience, assessment, and continuing professional development requirements for Chartered Accountants. ICAI states that, as an IFAC member body, it considers the International Education Standards (IES) in developing its entry requirements, Chartered Accountancy curriculum, practical training requirements, and assessments. ICMAI establishes education, practical training, assessment, and continuing professional development requirements for Cost and Management Accountants, including its Syllabus 2022, practical training scheme, and continuing professional education requirements.

While both ICAI and ICMAI have structured professional education and continuing professional development frameworks, formal adoption of the full IES in effect at the time of the assessment has not been demonstrated for all aspiring and professional accountants in the jurisdiction.

Current Status: Partially Adopted

Under the Companies Act, 2013, auditors are required to comply with auditing standards prescribed by the Central Government based on recommendations of the Institute of Chartered Accountants of India (ICAI) and, where applicable, consultation with the National Financial Reporting Authority (NFRA).

ICAI, through its Auditing and Assurance Standards Board, develops the Standards on Auditing (SAs) applied in India. The SAs are developed through an ongoing convergence process with International Standards on Auditing (ISA) issued by the International Auditing and Assurance Standards Board. The current suite of SAs is substantially aligned with the 2024 IAASB Handbook and incorporates many recent ISA revisions, including revised SA 800, SA 805, and SA 810. However, the SAs are not adopted in their entirety as issued by the IAASB and include modifications to reflect national legal and regulatory requirements. Certain ISA revisions effective at the time of the assessment have not yet been incorporated into the Indian framework.

ICAI has undertaken consultation on a proposed Standard on Auditing for Audits of Financial Statements of Less Complex Entities (SA for LCE). However, adoption of ISA for LCE or an equivalent national standard has not been finalized as of the date of the assessment.

Current Status: Partially Adopted

Ethical requirements for professional accountants in India are established by the Institute of Chartered Accountants of India (ICAI) under the Chartered Accountants Act, 1949 and by the Institute of Cost Accountants of India (ICMAI) under the Cost and Works Accountants Act, 1959.

ICAI establishes ethical requirements for Chartered Accountants through its Code of Ethics, 13th Edition, effective April 1, 2026. The Code is issued pursuant to ICAI's authority under the Chartered Accountants Act, 1949 and is based on the 2024 Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants, with modifications to reflect national legal and regulatory requirements.

ICMAI establishes ethical requirements for Cost and Management Accountants through its Code of Ethics, effective June 1, 2025, including independence standards for audit and review engagements. The Code is issued pursuant to ICMAI's authority under the Cost and Works Accountants Act, 1959 and is based on the 2024 Handbook of the International Code of Ethics for Professional Accountants, with modifications to reflect applicable Indian laws and regulations.

The current IESBA reference is the 2025 Handbook of the International Code of Ethics for Professional Accountants. While the ethical frameworks established by ICAI and ICMAI are substantially aligned with the 2024 IESBA Handbook and apply to their respective members, the latest 2025 Handbook has not yet been incorporated into the jurisdiction-level framework.

Current Status: Partially Adopted

Under Article 150 of the Constitution of India, the accounts of the Union and the States are maintained in the form prescribed by the President on the advice of the Comptroller and Auditor General of India (CAG).

The Government Accounting Standards Advisory Board (GASAB), established by CAG in 2002, formulates accounting and financial reporting standards for government entities. GASAB issues Indian Government Accounting Standards (IGAS), which are based on the cash basis of accounting and become mandatory once notified by the Government. GASAB has also developed Indian Government Financial Reporting Standards (IGFRS), which are accrual-based standards intended to support pilot studies and a gradual transition toward accrual accounting.

India has not adopted accrual-basis IPSAS, cash-basis IPSAS, or national standards based on IPSAS for application by public sector entities. Accordingly, the jurisdiction-level public sector accounting framework is not aligned with SMO 5 requirements, and IPSAS are assessed as Not Adopted in India.

Current Status: Not Adopted

Investigative and disciplinary arrangements in India operate through a shared framework involving the Institute of Chartered Accountants of India (ICAI), the Institute of Cost Accountants of India (ICMAI), and the National Financial Reporting Authority (NFRA).

Under the Chartered Accountants Act, 1949, ICAI operates an investigative and disciplinary system for Chartered Accountants through the Director (Discipline), Board of Discipline, and Disciplinary Committee. The framework provides for investigation of complaints and information, consideration of professional or other misconduct, and sanctions including reprimand, monetary penalties, suspension, or removal from membership.

Under the Cost and Works Accountants Act, 1959, ICMAI operates a similar investigative and disciplinary system for Cost and Management Accountants through the Director (Discipline), Board of Discipline, and Disciplinary Committee. The framework provides for investigation, disciplinary action, sanctions, and appeal.

In addition, NFRA, constituted under Section 132 of the Companies Act, 2013, has authority to monitor and enforce compliance with accounting and auditing standards, oversee audit quality, investigate professional or other misconduct, and impose sanctions on auditors and audit firms within its jurisdiction.

Together, these arrangements provide coverage of professional accountants across the jurisdiction and incorporate key elements of SMO 6, including complaints-based and information-based investigation, disciplinary mechanisms, sanctions, and rights of appeal. Accordingly, the jurisdiction-level investigative and disciplinary system is aligned with SMO 6 requirements and is assessed as Adopted in India.

Current Status: Adopted

Under the Companies Act, 2013, the Ministry of Corporate Affairs (MCA) is responsible for prescribing accounting standards for companies in India. Accounting standards are developed through a standard-setting process led by the Accounting Standards Board of the Institute of Chartered Accountants of India (ICAI) and are notified by MCA through the Companies (Indian Accounting Standards) Rules, 2015, as amended.

India has implemented Indian Accounting Standards (Ind AS), which are substantially converged with IFRS Accounting Standards issued by the International Accounting Standards Board. Ind AS are mandatory for listed companies and other specified classes of companies and are periodically updated to reflect changes in IFRS Accounting Standards. However, Ind AS contain certain carve-outs and modifications to reflect national legal, regulatory, and economic circumstances and therefore do not constitute IFRS Accounting Standards as issued by the International Accounting Standards Board.

The National Financial Reporting Authority (NFRA) is responsible for monitoring compliance with accounting standards for entities within its jurisdiction.

The current IASB reference is the 2025 Issued IFRS Accounting Standards. While the Indian financial reporting framework is substantially aligned with IFRS Accounting Standards through Ind AS, IFRS Accounting Standards in effect at the time of the assessment have not been adopted in their entirety for application by all domestic publicly accountable entities. Accordingly, the jurisdiction-level financial reporting framework is substantially aligned with SMO 7 requirements and IFRS Accounting Standards are assessed as Partially Adopted in India.

The IFRS for SMEs Accounting Standard has not been adopted in India.

Current Status: Partially Adopted

Relevant Organizations

• Institute of Chartered Accountants of India (ICAI)
• Institute of Cost Accountants of India (ICAI-CMA)
• Quality Review Board(QRB) of ICAI
• Quality Review Board (QRB) of ICAI-CMA
• Comptroller and Auditor General of India (CAG)
• Government Accounting Standards Advisory Board (GASAB)
• National Financial Reporting Authority.

Relevant Legislation

• Chartered Accountants Act, 1949 (as amended)
• Cost and Works Accountants Act, 1959 (as amended)
• Companies Act, 2013
• Companies (Indian Accounting Standards) Rules, 2015

Relevant Publications

• Government Accounting Standards Advisory Board, “Preface to Indian Government Accounting Standards.”
• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: India,” October 2019.