ICAI announces Deferment of Implementation of SQM 1 and 2
ICAI Announces Deferment of Implementation of SQM 1 and SQM 2
The Institute of Chartered Accountants of India (ICAI) had earlier issued Standard on Quality Control (SQC) 1, titled “Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information and Other Assurance and Related Services Engagements” in October 2007. This standard has been applicable to engagements relating to accounting periods starting on or after 1 April 2009. SQC 1 continues to remain in force and applies to firms providing the services covered under the standard.
Subsequently, through an announcement dated 14 October 2024, ICAI introduced the following Standards on Quality Management (SQMs):
- SQM 1 – Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements
- SQM 2 – Engagement Quality Reviews
These standards were scheduled to become mandatory from 1 April 2026, replacing the existing SQC 1 framework.
However, during its 451st Council Meeting held on 30–31 March 2026, the Council of ICAI reviewed the implementation timeline of SQM 1 and SQM 2. After consideration, the Council decided to postpone the mandatory applicability date of these standards until a further announcement is made.
Accordingly, SQC 1 will continue to remain applicable for the time being.
This announcement has been issued with the approval of the Council of ICAI.
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