Archive · 28 Oct 2025
ICAI Proposes Significant Rule Relaxations for Chartered Accountants
Imagine accountants, called Chartered Accountants (CAs) in India, have a set of rules they must follow, like a professional code of conduct.
The ICAI, the organization that oversees CAs, wants to change some of these rules.
They are proposing 41 changes to make things easier and more modern.
For example, they want CAs to be able to team up with other types of professionals, like lawyers or engineers, to form bigger firms.
They also want to relax rules about how CAs can advertise, removing limits on how big the text can be.
Some rules about how much money firms can earn from one client are also changing, and new rules are being added to ensure auditors are truly independent, especially for big companies.
Experts think these changes are good and are a step towards making Indian firms more competitive globally, but some believe even more changes are needed for the profession to reach its full potential.
ICAI proposes 41 changes to the Code of Ethics for CAs, including forming partnerships with other professionals.
Advertisement guidelines may be updated, removing font size limits and FRN mention requirements.
New auditor independence rules are proposed for Public Interest Entities (PIEs) after non-audit services are provided.
The reporting threshold for fees from PIEs is raised to 20% from 15% for consecutive years.
Experts view the proposed changes as aligning with government vision for larger firms and international standards, but suggest further reforms are needed.
- Who
- The Institute of Chartered Accountants of India (ICAI)
- What
- Proposed significant relaxations to the Code of Ethics and Advertisement Guidelines for chartered accountants, including allowing partnerships with other professionals, changing fee and independence rules, and updating advertisement regulations.
- When
- Recently released exposure draft, with a comment deadline of November 26.
- Where
- India
- Why
- To create large audit and advisory firms, align with international standards (IESBA), and make regulations more contemporary and practical.
ICAI Proposals
Expert/Industry View
Partnerships with Other Professionals
ICAI Proposals
Proposes allowing CAs to form partnerships with other professionals under insolvency professional entities (IPEs) and resolution vehicle entities (RVEs).
Expert/Industry View
Considered a necessary and long-overdue change that aligns with the government's vision for larger audit and advisory firms.
Advertisement Guidelines
ICAI Proposals
Proposes removing font size limits and the requirement to mention membership/firm registration numbers in advertisements.
Expert/Industry View
Aimed at making advertisement rules more contemporary, though not explicitly detailed as a viewpoint, it's implied as a positive step.
Fee and Independence Rules
ICAI Proposals
Raises reporting threshold for PIEs to 20% from 15% for total professional fees, changes PIE definition, permits quoting fees based on turnover, and adds new independence provisions regarding non-audit services to PIEs.
Expert/Industry View
Aligns with IESBA's code of ethics, particularly for ESG assurance. Some experts feel much more needs to be done to elevate the profession.
- Number of Proposed Changes
- 41
- Current Code of Ethics Effective Date
- 2020
- Comment Deadline
- November 26
- Reporting Threshold Increase for PIEs
- 15% to 20% (consecutive years)
- New Partnership Entities Allowed
- Insolvency Professional Entities (IPEs) and Resolution Vehicle Entities (RVEs)