TFS Gulf 
- Starting FY2027, each partner will be allowed to sign a maximum of 60 tax audit reports per financial year.
- The revised guidelines were approved by ICAI’s council in its May 2025 meeting.
- The final set of rules is expected to be officially notified soon, President Charanjot Singh Nanda told ET.
Tax Audit signing limits (Before FY2027 Rule)
ICAI issued guidelines back in 2008 “recommending” that a partner should not sign more than 60 tax audits under Section 44AB, in a financial year.
The 60-Tax audit cap was more of an ICAI-recommended best practice and had not been strictly enforced.
Many CA firms, especially larger ones, had partners signing far more than 60 audits by exploiting regulatory gaps or by being partners in multiple firms.
In many CA firms, only senior partners signed hundreds of audit reports, even if other partners did the work.
This led to
- Unequal workload
- Concentration of power
- Possible compliance risks
- Limited growth for younger partners
What’s changing now (from FY2027)
As per ICAI’s May 2025 council meeting, formal and stricter guidelines will be enforced starting FY2027, making the 60-audit limit mandatory and binding across all firms and partners.
The new rules will close loopholes, including
- How many firms are they a partner in
- Whether they sign some audits individually or through a firm
- How many different clients or businesses do they audit
Why it matters
More opportunities to sign audits
- Earlier, only senior or name partners signed most of the tax audit reports, even if others did the work.
- Now, with a cap of 60 audits per partner, everyone will get a chance to sign and be accountable.
- This gives visibility and credibility to junior or newer partners.
- This puts a stop to a common industry practice where senior partners would sign reports that were prepared or reviewed by junior partners or team members.
Career growth
- Signing audits builds track record, reputation, and ability to bring in business.
- This change will allow more partners to develop their client relationships and grow within the firm.
Legal accountability is spread out
- Previously, over-reliance on one or two partners could lead to legal exposure concentrated on them.
- Now, each partner will sign only what they’re directly responsible for.
Improve audit quality
When one person signs 200+ audits a year, quality can slip.
A member of the ICAI’s Central Council told Economic Times:
“It’s not about limiting a senior partner’s audit ability. The idea is to ensure that all auditors spend quality time on the audit assignments that they take up and deliver quality reports.”
Also read: Audit rotation 2026-27: 957 companies set to rotate. Can Big 6 maintain their dominance
For smaller Audit firms…
This could be a golden opportunity.
Imagine: When bigger firms need to offload extra audit assignments due to this cap, mid-sized and up-and-coming players could step in.
It’s a more level playing field now.
