ICAI releases Exposure Draft of 2026 Guidance Note on Audit of Banks
The Auditing and Assurance Standards Board (AASB) of The Institute of Chartered Accountants of India has released the Exposure Draft of the “Guidance Note on Audit of Banks (2026 Edition)” on 13 February 2026 for public consultation. This Exposure Draft is a precursor to the final 2026 edition and forms part of ICAI’s annual exercise of updating audit guidance applicable to the statutory audit of banks and their branches.
The AASB has invited comments from practitioners, banks, regulators, academicians and any other interested stakeholders, with the objective of refining and strengthening the final Guidance Note for the 2026 audit cycle.
Background and purpose of the Guidance Note
Annual revision of bank audit guidance
Every year, the AASB, acting under the authority delegated by the Council of ICAI, issues a revised “Guidance Note on Audit of Banks”. This document is a detailed technical resource for statutory auditors engaged in:
- Audit of head offices of banks
- Audit of domestic and foreign branches of banks
The Guidance Note is updated annually to:
- Reflect changes in regulatory requirements issued by authorities such as the Reserve Bank of India
- Align with newly issued or revised Standards on Auditing and other pronouncements of ICAI
- Incorporate emerging practices and risk areas observed in bank audits
- Address implementation challenges faced by auditors in the previous audit cycle
The 2026 edition continues this tradition of periodic revision, aiming to ensure that statutory audits of banks remain robust, consistent and aligned with current professional expectations.
Role of AASB and ICAI Council
The Auditing and Assurance Standards Board functions as a technical body of ICAI responsible for:
- Developing guidance for effective implementation of Standards on Auditing
- Issuing pronouncements such as Guidance Notes, Implementation Guides and Technical Guides
- Supporting members of ICAI in performing high‑quality audits across sectors, including the banking industry
The Council of ICAI authorises AASB to bring out the annual edition of the bank audit Guidance Note. The 2026 Exposure Draft has been prepared under this authority and placed in the public domain to receive structured feedback before finalisation.
Key features of the 2026 Exposure Draft process
Objective of issuing the Exposure Draft
The circulation of the Exposure Draft serves several important purposes:
- Consultative development: It enables the profession and other stakeholders to participate in shaping the final Guidance Note.
- Technical robustness: Inputs from diverse users help identify ambiguities, gaps or areas needing further clarification.
- Practical orientation: Feedback from practicing auditors familiar with ground-level audit challenges ensures the final document is practically implementable.
- Enhanced credibility: A transparent due‑process approach strengthens confidence in the resulting guidance.
Scope of the Exposure Draft
While the full text of the Exposure Draft is contained in the document hosted on the ICAI website, its broad scope typically includes: