Indian Inc brace for mandatory auditor rotation
The scramble for marquee audit mandates has begun as India Inc enters the final stretch of the 10-year mandatory rotation cycle introduced under the Companies Act in 2017-18, with several companies beginning discussions to onboard new auditors for the next decade.
Tata Motors was the first big company off the block, announcing Deloitte Haskins & Sells LLP as statutory auditors from FY28. According to Primeinfobase.com, 66 companies will complete their 10-year auditor term in 2025-26, followed by a sharp spike to 415 in 2026-27 and then 76 in 2027-28. The data covers all NSE-listed firms and BSE-listed companies with a market cap above Rs.1,000 crore. The big audit firms have already started setting up project offices, which will manage the whole audit rotation exercise.
Between 2018 and 2023, audit fees for FTSE 250 companies rose by 75%, reflecting rising costs and complexity. In contrast, India's NSE 500 saw only a 25% increase during the same period-despite operating in a high-inflation, high-growth environment. Also, this time around, companies are triggering a far more structured and competitive process than a decade back. Personal relationships no longer drive decisions-formal RFPs are fast becoming the norm.
Top auditors say the level of scrutiny has also sharply intensified. Audit committees want clean audit firms with strong governance, no regulatory baggage, and the assurance that their auditor won't face disruption mid-mandate.
With NFRA taking a stricter stance, firms now have to make a clear choice-either pursue the audit or continue advisory work. EY remains the only major firm still offering non-audit services to its audit clients, stating that they continue to remain compliant with auditor independence requirements under the Companies Act, 2013, the ICAI Code, and the firm's internal independence policy regarding non-audit services.
