A key amendment in the Corporate Laws (Amendment) Bill, 2026 restricting auditors and audit firms from providing non-audit services after their term completes, could potentially increase the compliance cost for domestic companies by 20-30%, top auditors working with Big Four firms told FE. These auditors, while opposing the rule, said that such restrictions don’t exist anywhere else in the world, and would result in service quality deterioration as companies will have to rely on lower-tier firms to deliver crucial services like tax advisory, internal audits and consulting.

As per the Bill, which has been referred to the joint parliamentary committee (JPC) for detailed scrutiny, Section 144 of the Companies Act will be amended to include a new provision that prohibits auditors or audit firms from giving non-audit services to a company or its subsidiary for a period of three years after their term as statutory auditor has completed.