MCA Likely to Notify SA 600 and 40 Revised Audit Standards by August

The Ministry of Corporate Affairs (MCA) is likely to notify a major overhaul of India’s auditing framework by August, including the much-discussed Standard on Auditing SA 600, “Using the Work of Another Auditor,” along with around 40 revised auditing and quality management standards.

As per reports, the proposed notification is expected to bring India’s audit standards closer to global practices and strengthen the accountability framework for auditors, especially in group audits involving holding companies, subsidiaries, associates and component auditors.

SA 600 has been one of the most closely watched and debated standards because it deals with the responsibilities of the principal auditor when relying on the work performed by another auditor. The revised framework is expected to place greater responsibility on the group or principal auditor to evaluate, review and obtain sufficient appropriate audit evidence in respect of the work carried out by component auditors.

The National Financial Reporting Authority had earlier finalised and recommended several auditing standards, including SA 299, SA 600 and SA 800, to the Central Government, with the proposed effective date from 1 April 2026, subject to government approval.

The move is seen as a significant step towards improving audit quality, transparency and investor confidence in India’s corporate reporting ecosystem. The revised standards are also expected to impact audit firms handling group audits, large corporate audits and entities having multiple subsidiaries or associates.

The notification of SA 600 is particularly important for the audit profession as it may redefine the extent of work, documentation, review procedures and accountability of principal auditors in group audit engagements.

Once notified, audit firms and companies will need to prepare for the revised audit regime, update internal methodologies, strengthen documentation practices and ensure proper coordination between principal auditors and component auditors.

The development is expected to be closely watched by Chartered Accountants, audit firms, listed companies, large corporates and other stakeholders in the financial reporting ecosystem. (CA Sansaar)