ICAI Postpones Mandatory Applicability of SQM 1 and SQM 2: Extant SQC 1 to Remain in Force

The Auditing and Assurance Standards Board, operating under the aegis of the Institute of Chartered Accountants of India (ICAI), has released a pivotal update concerning the regulatory framework that governs audit quality. Through an official declaration dated March 31, 2026, the regulatory authority has elected to indefinitely postpone the mandatory enforcement of its newly formulated quality management standards.

Historical Context: The Reign of SQC 1

To ensure rigorous quality control protocols are maintained during the audit of an assessee, the ICAI originally instituted the extant Standard on Quality Control (SQC 1). Formally designated as "Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements", this foundational standard was unveiled to the professional community in October 2007.