The Institute of Chartered Accountants of India (ICAI) recently issued a draft on auditing standards for limited liability partnerships (LLPs) in order to bring them at par with “companies” in terms of accountability and transparency. These standards are a step towards increasing the regulatory oversight over LLPs which are increasing across the country. Currently, LLPs are not legally required to follow any specific accounting and auditing standards. In addition, LLPs are exempted from Auditor’s Report Order (CARO), a format for the issue of audit reports in case of statutory audits of companies. The draft has incorporated amendments from the recently-finalised six standards, in addition to revising the terminologies in the context of LLPs. In the draft rules, the standards of auditing (SAs) will be notified for the first time under the LLP Act 2008.

The section 34A of the LLP Act, 2008 mandates the central government to prescribe auditing standards for LLPs as recommended by the ICAI. The government is required to consult National Financial Reporting Authority (NFRA) before notifying these norms. The latest draft has come after MCA had directed ICAI to prepare and present a separate set of standards on auditing for LLPs. 

Due to the surge in LLP registrations over the past few years, MCA has been proactively involved in defining the accounting norms for them. In India, LLPs are preferred because of their lower compliance burden as compared to companies.

Comments may be submitted by 1^st May, 2025.
 

Click the icon to access the ICAI’s draft-