Ficci asks govt to drop audit rule change, flags cost, quality risks

The Federation of Indian Chambers of Commerce and Industry (Ficci) has asked the government to scrap a proposal to ban audit firms from offering non-audit services to clients for three years after their term ends.

- Devina Sengupt

It said the move will lead to inefficiencies, increased costs and hurdles for large corporate groups, and force companies to depend on smaller auditors, which could compromise ser vice quality in complex areas.

Companies including EY, PwC, KPMG, Deloitte, BDO and Grant Thornton Bharat, among other audit firms, will be impacted if amendments proposed to the Companies Act of 2013 are implemented. These companies offer other advisory services besides audits for clients.

Ficci submitted comments and suggestions on the Corporate Laws (Amendment) Bill, 2026, last week, Mint learnt.

According to the proposed clause in the bill, an auditor or audit firm shall not provide, directly or indirectly, any non audit services to a company or its holding company or subsidiary. This restriction will also apply for three years after the term of the auditor or audit firm has been completed.

Ficci, concerned that the cooling off period will hinder business, suggested that the "proposal to extend the restriction on non audit services for a period of three years following the completion of the audit term be omitted," according to the document reviewed by Mint.