{"id":29293,"date":"2025-05-15T19:40:48","date_gmt":"2025-05-15T14:10:48","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=29293"},"modified":"2025-09-03T12:50:12","modified_gmt":"2025-09-03T07:20:12","slug":"cag-empanelment-of-ca-llps-firms-selection-of-auditors","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/","title":{"rendered":"CAG Empanelment of CA \/LLPs Firms &#038; Selection of Auditors"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69f6e07792fb0\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69f6e07792fb0\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#New_CAG_Policy_of_Empanelment_of_CA_FirmsLLPs_and_Selection_of_Auditors_for_Financial_Year_2023-24\" title=\"New CAG Policy of Empanelment of CA Firms\/LLPs and Selection of Auditors for Financial Year 2023-24\">New CAG Policy of Empanelment of CA Firms\/LLPs and Selection of Auditors for Financial Year 2023-24<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Introduction\" title=\"Introduction\">Introduction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Criteria_for_Empanelment\" title=\"Criteria for Empanelment\">Criteria for Empanelment<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Eligibility\" title=\"Eligibility:\">Eligibility:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Scoring_Parameters_Total_score_based_on_100_points\" title=\"Scoring Parameters (Total score based on 100+ points):\">Scoring Parameters (Total score based on 100+ points):<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Quantitative_Parameters\" title=\"Quantitative Parameters\">Quantitative Parameters<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Qualitative_Parameters\" title=\" Qualitative Parameters\"> Qualitative Parameters<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#7a_Recognized_Professional_Certifications\" title=\"7(a) Recognized Professional Certifications\">7(a) Recognized Professional Certifications<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#7b_ICAI_Certification_Courses\" title=\"7(b) ICAI Certification Courses\">7(b) ICAI Certification Courses<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Additional_Qualifications_%E2%80%93_Full-Time_CA_Employees_Maximum_20_Points\" title=\"Additional Qualifications \u2013 Full-Time CA Employees (Maximum 20 Points)\">Additional Qualifications \u2013 Full-Time CA Employees (Maximum 20 Points)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#8a_Recognized_Professional_Certifications_1_Point_Each\" title=\"8(a) Recognized Professional Certifications (1 Point Each)\">8(a) Recognized Professional Certifications (1 Point Each)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#8b_ICAI_Certification_Courses_05_Point_Each\" title=\"8(b) ICAI Certification Courses (0.5 Point Each)\">8(b) ICAI Certification Courses (0.5 Point Each)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Professional_Track_Record\" title=\"Professional Track Record\">Professional Track Record<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Allotment_of_Audits\" title=\"Allotment of Audits\">Allotment of Audits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Rotation_of_Audits\" title=\"Rotation of Audits\">Rotation of Audits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Deductions_Penal_Consequences\" title=\"Deductions &amp; Penal Consequences\">Deductions &amp; Penal Consequences<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Professional_Track_Record_%E2%80%93_Deductions_and_Disqualifications\" title=\"Professional Track Record \u2013 Deductions and Disqualifications\">Professional Track Record \u2013 Deductions and Disqualifications<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Professional_income_from_other_sources_exceeds_firm_compensation\" title=\"Professional income from other sources exceeds firm compensation.\">Professional income from other sources exceeds firm compensation.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#6_Audit_Experience_Points_based_on_UDINs\" title=\"[6] Audit Experience Points (based on UDINs)\">[6] Audit Experience Points (based on UDINs)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#CAG_Empanelment_Status_update_Fiancial_Year_2025%E2%80%932026\" title=\"CAG Empanelment Status update Fiancial Year 2025\u20132026\">CAG Empanelment Status update Fiancial Year 2025\u20132026<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#CAG_Empanelment_Compensation_Criteria_FY_2025%E2%80%9326\" title=\"CAG Empanelment Compensation Criteria (FY 2025\u201326)\">CAG Empanelment Compensation Criteria (FY 2025\u201326)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Section_194T_%E2%80%93_TDS_on_Partner_Payments\" title=\"Section 194T \u2013 TDS on Partner Payments\">Section 194T \u2013 TDS on Partner Payments<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/carajput.com\/blog\/cag-empanelment-of-ca-llps-firms-selection-of-auditors\/#Section_40b_%E2%80%93_Deductibility_of_Partner_Remuneration\" title=\"Section 40(b) \u2013 Deductibility of Partner Remuneration\">Section 40(b) \u2013 Deductibility of Partner Remuneration<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-20786\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/01\/CAG-Empanelment-2022-23.jpeg\" alt=\"CAG Empanelment 2022-23\" width=\"969\" height=\"505\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/01\/CAG-Empanelment-2022-23.jpeg 311w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2022\/01\/CAG-Empanelment-2022-23-300x156.jpeg 300w\" sizes=\"(max-width: 969px) 100vw, 969px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"New_CAG_Policy_of_Empanelment_of_CA_FirmsLLPs_and_Selection_of_Auditors_for_Financial_Year_2023-24\"><\/span><span style=\"color: #000080;\"><strong>New CAG Policy of Empanelment of CA Firms\/LLPs and Selection of Auditors for Financial Year 2023-24<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Introduction\"><\/span><span style=\"color: #000080;\"><strong>Introduction<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In India, Chartered Accountant firms and Limited Liability Partnerships with at least one full-time Fellow Chartered Accountant partner or FCA sole proprietor are eligible to apply for empanelment with the Comptroller and Auditor General of India. The objective of this empanelment is to facilitate the appointment of auditors for government companies under Sections 139(5) &amp; 139(7) of the Companies Act, 2013, and for statutory corporations or autonomous bodies as per their governing statutes.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Criteria_for_Empanelment\"><\/span><span style=\"color: #000080;\"><strong>Criteria for Empanelment<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The CAG Policy of Empanelment of CA Firms\/LLPs for FY 2025\u201326 outlines the revised criteria for The empanelment criteria have been developed in consultation with the Institute of Chartered Accountants of India. Points are awarded to firms\/LLPs based on quantitative and qualitative parameters. In certain cases, firms may either be denied empanelment or not considered for audit allotments despite empanelment, due to disqualifications or past conduct. the empanelment and selection of auditors for government companies and statutory corporations. Here&#8217;s a summary of key highlights from the document:<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Eligibility\"><\/span><span style=\"color: #000080;\"><strong>Eligibility:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>CA firms\/LLPs must have at least one full-time FCA partner or sole proprietor.<\/li>\n<li>Empanelment is for appointment as auditors under:\n<ul>\n<li>Section 139(5) and 139(7) of the Companies Act, 2013.<\/li>\n<li>Respective statutes of statutory corporations\/autonomous bodies.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Scoring_Parameters_Total_score_based_on_100_points\"><\/span><span style=\"color: #000080;\"><strong>Scoring Parameters (Total score based on 100+ points):<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Quantitative_Parameters\"><\/span>Quantitative Parameters<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<table style=\"height: 438px;\" width=\"837\">\n<thead>\n<tr>\n<td>Parameter<\/td>\n<td>Maximum Points<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Full-time FCA partners (up to 20)<\/td>\n<td>3 points each for first 5, half thereafter<\/td>\n<\/tr>\n<tr>\n<td>Full-time ACA partners<\/td>\n<td>2 points each<\/td>\n<\/tr>\n<tr>\n<td>Years of association<\/td>\n<td>Up to 2 points per partner<\/td>\n<\/tr>\n<tr>\n<td>Full-time CA employees (up to 20)<\/td>\n<td>1 point each for first 5, half thereafter<\/td>\n<\/tr>\n<tr>\n<td>Firm experience<\/td>\n<td>0.5 points\/year, max 10<\/td>\n<\/tr>\n<tr>\n<td>Audit turnover only<\/td>\n<td>Max 10 points<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ol start=\"2\">\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Qualitative_Parameters\"><\/span><span style=\"color: #000080;\"><strong> Qualitative Parameters<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<table style=\"height: 314px;\" width=\"838\">\n<thead>\n<tr>\n<td>Parameter<\/td>\n<td>Maximum Points<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Peer Review by ICAI<\/td>\n<td>25 points<\/td>\n<\/tr>\n<tr>\n<td>Audit experience (e.g., PSU audits)<\/td>\n<td>40 points<\/td>\n<\/tr>\n<tr>\n<td>Additional qualifications of partners (e.g., DISA, CISA, CPA)<\/td>\n<td>25 points<\/td>\n<\/tr>\n<tr>\n<td>Additional qualifications of employees<\/td>\n<td>20 points<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Additional Qualifications (Maximum 25 Points)<\/p>\n<h3><span class=\"ez-toc-section\" id=\"7a_Recognized_Professional_Certifications\"><\/span><span style=\"color: #000080;\"><strong>7(a) Recognized Professional Certifications<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>These international and specialized certifications are awarded 1.25 points each, subject to the following conditions:<\/p>\n<ul>\n<li>Eligible Certifications:\n<ol>\n<li>DISA \u2013 Diploma in Information Systems Audit (ICAI)<\/li>\n<li>CISA \u2013 Certified Information Systems Auditor (ISACA, USA)<\/li>\n<li>CPA \u2013 Certified Public Accountant (AICPA, USA)<\/li>\n<li>CIA \u2013 Certified Internal Auditor (IIA, USA)<\/li>\n<li>CFE \u2013 Certified Fraud Examiner (ACFE, USA)<\/li>\n<\/ol>\n<\/li>\n<li>Award Criteria:<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Only one qualification per full-time CA partner\/sole proprietor is considered.<\/li>\n<li>A maximum of 20 full-time CA partners can be awarded points under this sub-criterion.<\/li>\n<li>Maximum points possible from this category: 25 points.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"7b_ICAI_Certification_Courses\"><\/span><span style=\"color: #000080;\"><strong>7(b) ICAI Certification Courses<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>These domestic, sector-specific certifications from ICAI are awarded 1 point each:<\/p>\n<ul>\n<li>Eligible ICAI Courses:\n<ol>\n<li>IND AS<\/li>\n<li>Forensic Accounting and Fraud Prevention<\/li>\n<li>Public Finance &amp; Government Accounting<\/li>\n<li>Concurrent Audit of Banks<\/li>\n<li>Anti-Money Laundering Law<\/li>\n<li>Forex and Treasury Management<\/li>\n<li>Goods and Services Tax (GST)<\/li>\n<\/ol>\n<\/li>\n<li>Award Criteria:<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>1 point per course completed.<\/li>\n<li>Points awarded in addition to 7(a), but the total of Section 7 (a + b) is capped at 25 points.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Additional_Qualifications_%E2%80%93_Full-Time_CA_Employees_Maximum_20_Points\"><\/span><span style=\"color: #000080;\"><strong>Additional Qualifications \u2013 Full-Time CA Employees (Maximum 20 Points)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"8a_Recognized_Professional_Certifications_1_Point_Each\"><\/span><span style=\"color: #000080;\"><strong>8(a) Recognized Professional Certifications (1 Point Each)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Eligible Certifications:\n<ol>\n<li>DISA \u2013 Diploma in Information Systems Audit (ICAI)<\/li>\n<li>CISA \u2013 Certified Information Systems Auditor (ISACA, USA)<\/li>\n<li>CPA \u2013 Certified Public Accountant (AICPA, USA)<\/li>\n<li>CIA \u2013 Certified Internal Auditor (IIA, USA)<\/li>\n<li>CFE \u2013 Certified Fraud Examiner (ACFE, USA)<\/li>\n<\/ol>\n<\/li>\n<li>Award Criteria:<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>1 point per employee for one qualification only (even if the employee holds multiple).<\/li>\n<li>Maximum of 20 full-time CA employees can be considered under this sub-category.<\/li>\n<li>Maximum points under 8(a): 20 points.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"8b_ICAI_Certification_Courses_05_Point_Each\"><\/span><span style=\"color: #000080;\"><strong>8(b) ICAI Certification Courses (0.5 Point Each)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Eligible ICAI Courses:\n<ol>\n<li>IND AS<\/li>\n<li>Forensic Accounting and Fraud Prevention<\/li>\n<li>Public Finance &amp; Government Accounting<\/li>\n<li>Concurrent Audit of Banks<\/li>\n<li>Anti-Money Laundering Law<\/li>\n<li>Forex and Treasury Management<\/li>\n<li>Goods and Services Tax (GST)<\/li>\n<\/ol>\n<\/li>\n<li>Award Criteria:<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>0.5 point per ICAI course completed.<\/li>\n<li>These points are in addition to 8(a), but total points under Section 8 (8a + 8b) are capped at 20 points.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Professional_Track_Record\"><\/span><span style=\"color: #000080;\"><strong>Professional Track Record<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Professional Misconduct: 10%-point reduction per guilty CA (partner, proprietor, or employee).<\/li>\n<li>Unsatisfactory PSU Audit Performance: 10%-point deduction.<\/li>\n<li>Refusal of CAG-Allotted Audits:\n<ul>\n<li>First refusal: 10% point deduction.<\/li>\n<li>Second refusal: Debarment for 5 years.<\/li>\n<\/ul>\n<\/li>\n<li>Adverse Comments from QRB\/NFRA: 10% deduction or debarment as applicable.<\/li>\n<li>Debarment by Regulator\/Government: Firm not empanelled during debarment period.<\/li>\n<li>CBI\/ED Convictions or Trials: Disqualification from empanelment or audit allotment.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Allotment_of_Audits\"><\/span><span style=\"color: #000080;\"><strong>Allotment of Audits<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>Audit Fee up to \u20b95 Lakhs\n<ul>\n<li>Selection is based on correlating the firm&#8217;s score with the audit fee.<\/li>\n<\/ul>\n<\/li>\n<li>Audit Fee above \u20b95 Lakhs (Major Audits)\n<ul>\n<li>Eligibility criteria:\n<ul>\n<li>At least 6 full-time CAs, including 5 partners.<\/li>\n<li>One partner with \u226510 years association; three with \u22655 years; two with \u22651 year.<\/li>\n<li>Firm must be at least 10 years old.<\/li>\n<li>At least one partner with DISA\/CISA qualification.<\/li>\n<li>At least 5 years of CAG-audit experience.<\/li>\n<\/ul>\n<\/li>\n<li>Other factors: experience, capacity, performance, branch location, etc.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"Rotation_of_Audits\"><\/span><span style=\"color: #000080;\"><strong>Rotation of Audits<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Tenure of appointment is up to 3 consecutive financial years, subject to continued eligibility and satisfactory performance.<\/li>\n<li>A firm that retires\/surrenders from a Maharatna company audit:\n<ul>\n<li>Not eligible for Maharatna audit for 4 years.<\/li>\n<li>Not eligible for the same company for 5 years.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Deductions_Penal_Consequences\"><\/span><span style=\"color: #000080;\"><strong>Deductions &amp; Penal Consequences<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table style=\"height: 354px;\" width=\"864\">\n<thead>\n<tr>\n<td>Issue<\/td>\n<td>Penalty<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Professional misconduct (CA partner\/employee)<\/td>\n<td>10% score reduction<\/td>\n<\/tr>\n<tr>\n<td>Unsatisfactory audit performance<\/td>\n<td>10% score reduction<\/td>\n<\/tr>\n<tr>\n<td>Audit refusal (without valid reason)<\/td>\n<td>10% reduction; repeat leads to 5-year ban<\/td>\n<\/tr>\n<tr>\n<td>QRB or NFRA reprimands<\/td>\n<td>10% score reduction<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Professional_Track_Record_%E2%80%93_Deductions_and_Disqualifications\"><\/span><span style=\"color: #000080;\"><strong>Professional Track Record \u2013 Deductions and Disqualifications<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<thead>\n<tr>\n<td>Clause<\/td>\n<td>Parameter<\/td>\n<td>Impact on Firm\/LLP<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>9<\/td>\n<td>Professional Misconduct by Member (as per ICAI)<\/td>\n<td>10% point deduction per individual (sole proprietor\/CA partner\/employee) held guilty during the previous year under the Chartered Accountants Act, 1949.<br \/>\nNo credit given for such CA in empanelment.<\/td>\n<\/tr>\n<tr>\n<td>10<\/td>\n<td>Unsatisfactory PSU Audit Performance<\/td>\n<td>10% point deduction if firm\/LLP received an advisory for poor performance in the immediately preceding year.<\/td>\n<\/tr>\n<tr>\n<td>11<\/td>\n<td>Refusal of CAG-Allotted Audit<\/td>\n<td>\u00a010% point deduction for first-time refusal (without legitimate disqualification).<br \/>\nSecond refusal \u2192 Debarment for 5 years from subsequent empanelment.<\/td>\n<\/tr>\n<tr>\n<td>12<\/td>\n<td>Advisory by Quality Review Board (QRB)<\/td>\n<td>\u00a010% point deduction for any advisory issued by QRB in the previous year.<\/td>\n<\/tr>\n<tr>\n<td>13<\/td>\n<td>Action by National Financial Reporting Authority (NFRA)<\/td>\n<td>\u00a010% point deduction for advisory\/caution\/monetary penalty.<br \/>\nDebarment if barred by NFRA (with or without penalty), for the duration of debarment.<\/td>\n<\/tr>\n<tr>\n<td>14<\/td>\n<td>Debarment by Regulator or Govt. Authority<\/td>\n<td>Not empanelled for the period of debarment.<\/td>\n<\/tr>\n<tr>\n<td>15<\/td>\n<td>Conviction or Charges by CBI\/ED<\/td>\n<td>Not empanelled if any CA partner\/employee is convicted in such cases.<br \/>\nNo audit allotment if a charge sheet is issued or case is under trial against the firm\/partner\/employee.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><strong>Rotation of Audits<\/strong><\/p>\n<ol>\n<li>Tenure of Appointment<\/li>\n<\/ol>\n<ul>\n<li>Appointment of a firm\/LLP as auditor is typically for one financial year.<\/li>\n<li>Re-appointment is allowed year to year, but the total tenure (including initial appointment) should not exceed three years, unless exceptional circumstances exist.<\/li>\n<li>A firm may not be re-appointed if:\n<ul>\n<li>It becomes ineligible.<\/li>\n<li>Its point score drops by more than 25% compared to the previous year.<\/li>\n<li>It is debarred or has any other legitimate disqualification as determined by the CAG office.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol>\n<li>Post-Retirement\/Surrender Restrictions (Maharatna Companies)<\/li>\n<\/ol>\n<ul>\n<li>A firm\/LLP that retires\/surrenders from the audit of a Maharatna company:\n<ul>\n<li>Will be barred from auditing any Maharatna company for a period of 4 years.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>iii. Same Company Restriction (Maharatna \/ Navratna Companies)<\/p>\n<ul>\n<li>A firm\/LLP that retires\/surrenders from a Maharatna or Navratna company:\n<ul>\n<li>Will not be eligible for reappointment in the same company for 5 years.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Clarifications on Full-Time Association<\/strong><\/p>\n<p>[1] Full-Time CA Partner\/Sole Proprietor \u2014 Not Considered If:<\/p>\n<ul>\n<li>Is a partner in other firms or a sole proprietor elsewhere.<\/li>\n<li>Employed full-\/part-time elsewhere or involved in independent practice or other activities under Sec. 2(2) of the CA Act.<\/li>\n<li>Compensation received in the previous FY is below threshold (based on firm location and designation):<\/li>\n<\/ul>\n<table style=\"height: 185px;\" width=\"817\">\n<thead>\n<tr>\n<td>Category<\/td>\n<td>Metro Cities (\u20b9 lakh)<\/td>\n<td>Other Cities (\u20b9 lakh)<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>FCA<\/td>\n<td>6.00<\/td>\n<td>3.60<\/td>\n<\/tr>\n<tr>\n<td>ACA<\/td>\n<td>3.60<\/td>\n<td>2.40<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul>\n<li>Share in firm\u2019s total compensation is below threshold:<\/li>\n<\/ul>\n<table style=\"height: 289px;\" width=\"834\">\n<thead>\n<tr>\n<td>No. of Partners<\/td>\n<td>Minimum Share Required<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>&gt;14<\/td>\n<td>1%<\/td>\n<\/tr>\n<tr>\n<td>10\u201314<\/td>\n<td>3%<\/td>\n<\/tr>\n<tr>\n<td>5\u20139<\/td>\n<td>5%<\/td>\n<\/tr>\n<tr>\n<td>&lt;5<\/td>\n<td>8%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Professional_income_from_other_sources_exceeds_firm_compensation\"><\/span><span style=\"color: #000080;\"><strong>Professional income from other sources exceeds firm compensation.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>[1] Full-Time CA Employee \u2014 Not Considered If:<\/p>\n<ul>\n<li>A partner elsewhere or a sole proprietor.<\/li>\n<li>Employed\/engaged in other practice\/activity under Sec. 2(2) of CA Act.<\/li>\n<\/ul>\n<p>[2] Points Eligibility<\/p>\n<ul>\n<li>Points awarded only to those CAs (partners, proprietors, employees) who were exclusively associated with the firm throughout the calendar year preceding empanelment.<\/li>\n<\/ul>\n<p>[3] Merger Clause<\/p>\n<ul>\n<li>In mergers:\n<ul>\n<li>Partners of merging entities earn points only after one calendar year.<\/li>\n<li>For the first five years, they are treated as having joined on the date of merger.<\/li>\n<li>Earlier association counts only after 5 years from merger date.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>[4] Audit Turnover-Based Points<\/p>\n<table style=\"height: 309px;\" width=\"833\">\n<thead>\n<tr>\n<td>Audit Turnover (\u20b9 crore)<\/td>\n<td>Metro Cities<\/td>\n<td>Points<\/td>\n<td>Other Cities<\/td>\n<td>Points<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\u2264 1.00 \/ 0.60<\/td>\n<td>\u2014<\/td>\n<td>0<\/td>\n<td>\u2014<\/td>\n<td>0<\/td>\n<\/tr>\n<tr>\n<td>1\u20132 \/ 0.60\u20131.20<\/td>\n<td>\u2713<\/td>\n<td>1<\/td>\n<td>\u2713<\/td>\n<td>1<\/td>\n<\/tr>\n<tr>\n<td>&#8230;<\/td>\n<td>&#8230;<\/td>\n<td>&#8230;<\/td>\n<td>&#8230;<\/td>\n<td>&#8230;<\/td>\n<\/tr>\n<tr>\n<td>&gt;10.00 \/ &gt;6.00<\/td>\n<td>\u2713<\/td>\n<td>10<\/td>\n<td>\u2713<\/td>\n<td>10<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>[5] Peer Review Points<\/p>\n<ul>\n<li>Based on valid Peer Review Certificate as of January 1 of relevant years:\n<ul>\n<li>Current year: 5 points<\/li>\n<li>Each earlier year: Decreasing scale (max 25 points total)<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"6_Audit_Experience_Points_based_on_UDINs\"><\/span><span style=\"color: #000080;\">[6] Audit Experience Points (based on UDINs)<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li><strong> Statutory Audits \u2013 Corporate<\/strong><\/li>\n<\/ol>\n<table width=\"669\">\n<thead>\n<tr>\n<td>Turnover Band<\/td>\n<td>Points<\/td>\n<td>Max Points<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\u20b940\u2013100 Cr<\/td>\n<td>3<\/td>\n<td>20<\/td>\n<\/tr>\n<tr>\n<td>\u20b9100\u2013250 Cr<\/td>\n<td>4<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>&gt; \u20b9250 Cr<\/td>\n<td>5<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ol>\n<li>Statutory Audits \u2013 Branch<\/li>\n<\/ol>\n<table style=\"height: 308px;\" width=\"821\">\n<thead>\n<tr>\n<td>Turnover Band<\/td>\n<td>Points<\/td>\n<td>Max Points<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\u20b940\u201360 Cr<\/td>\n<td>1<\/td>\n<td>10<\/td>\n<\/tr>\n<tr>\n<td>\u20b960\u2013100 Cr<\/td>\n<td>2<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>\u20b9100\u2013250 Cr<\/td>\n<td>3<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>&gt; \u20b9250 Cr<\/td>\n<td>4<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ol>\n<li><strong> Internal Audits (Turnover &gt; <\/strong><strong>\u20b9<\/strong><strong>40 Cr)<\/strong><\/li>\n<\/ol>\n<ul>\n<li>2 points per audit, max 5 points.<\/li>\n<\/ul>\n<ol>\n<li><strong> Audit of Government Schemes (Expenditure &gt; <\/strong><strong>\u20b9<\/strong><strong>40 Cr)<\/strong><\/li>\n<\/ol>\n<ul>\n<li>2 points per audit, max 5 points.<\/li>\n<\/ul>\n<p><em>Points will be based on UDINs generated in FYs 2020\u201321 through 2023\u201324. From FY 2026\u201327 onwards, 5-year UDINs will be considered. <\/em>Other Notable Points:<\/p>\n<ul>\n<li>Audit experience is given significant weight.<\/li>\n<li>Peer Review Certificate is critical to score high.<\/li>\n<li>A firm can be disqualified or debarred for non-compliance or repeated violations<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"CAG_Empanelment_Status_update_Fiancial_Year_2025%E2%80%932026\"><\/span><span style=\"color: #000080;\"><strong>CAG Empanelment Status update Fiancial Year 2025\u20132026<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"230\" data-end=\"478\">We would like to inform you that the provisional empanelment status of the firm, along with the provisional point score for the Fiancial Year 2025\u20132026, has been made available by the Office of the Comptroller and Auditor General of India (CAG).\u00a0You may log in to the official website <a class=\"\" href=\"http:\/\/www.care.cag.gov.in\" target=\"_new\" rel=\"noopener\" data-start=\"523\" data-end=\"572\">www.care.cag.gov.in<\/a> to check the details. Availability Period From: 09 June 2025 To: 18 June 2025,<\/p>\n<p data-start=\"673\" data-end=\"744\">Please log in using your firm credentials to Verify the provisional empanelment status. and Check the provisional point score. CA Firm must report any discrepancies or issues, if any, to the CAG office within the stipulated time frame.\u00a0It is important to ensure that all information is accurate, as this empanelment is crucial for audit assignments for the upcoming year.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><span style=\"color: #000080;\"><strong>Conclusion<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Comptroller and Auditor General of India empanelment process is a structured and merit-based system that scores CA firms and LLPs based on objective parameters. With the ultimate goal of ensuring competent and compliant audit practices across public sector undertakings and statutory bodies, this policy establishes transparent, performance-linked eligibility criteria that emphasize capability, ethics, and accountability.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"CAG_Empanelment_Compensation_Criteria_FY_2025%E2%80%9326\"><\/span><span style=\"color: #000080;\"><strong>CAG Empanelment Compensation Criteria (FY 2025\u201326)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Comptroller and Auditor General (CAG) has mandated\u00a0minimum partner compensation\u00a0for firms seeking empanelment:<\/p>\n<p><span style=\"color: #000080;\"><strong>Minimum Annual Compensation (Based on HQ Location):<\/strong><\/span><\/p>\n<ul>\n<li><span style=\"color: #000080;\"><strong>Metros (HQ):<\/strong><\/span>\n<ul>\n<li>FCA: \u20b96,00,000<\/li>\n<li>ACA: \u20b93,60,000<\/li>\n<\/ul>\n<\/li>\n<li><strong><span style=\"color: #000080;\">Other Cities (HQ)<\/span>:<\/strong>\n<ul>\n<li>FCA: \u20b93,60,000<\/li>\n<li>ACA: \u20b92,40,000<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Minimum Share of Firm\u2019s Compensation:<\/strong><\/span><\/p>\n<ul>\n<li>Sole Proprietor \/ 2\u20133 Partners:\u00a0<strong>20%<\/strong><\/li>\n<li>4\u20135 Partners:\u00a0<strong>15%<\/strong><\/li>\n<li>6\u20137 Partners:\u00a0<strong>10%<\/strong><\/li>\n<li>8+ Partners:\u00a0<strong>5%<\/strong><\/li>\n<\/ul>\n<p>However Partners cannot earn more from outside professional income\u00a0than their share in the firm.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Section_194T_%E2%80%93_TDS_on_Partner_Payments\"><\/span><span style=\"color: #000080;\"><strong>Section 194T \u2013 TDS on Partner Payments<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>Applicability Timeline:<\/strong><\/span><\/p>\n<ul>\n<li>FY 2024\u201325 (AY 2025\u201326): Not Applicable \u2013 No TDS required.<\/li>\n<li>FY 2025\u201326 (AY 2026\u201327): Applicable \u2013 TDS @10% on qualifying payments.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Covered Payments:<\/strong><\/span><\/p>\n<ul>\n<li>Salary \/ Remuneration<\/li>\n<li>Commission \/ Bonus<\/li>\n<li>Interest (on capital or loan)<\/li>\n<\/ul>\n<p>Threshold &amp; Rate:\u00a0 TDS rate is INR 20,000 aggregate per partner per FY\u00a0 &amp; applicable rate is 10% on amount credit or payment made , whichever is earlier (even if credited to capital account)\u00a0 However following are Exclusions:<\/p>\n<ul>\n<li>Share of profit (exempt under Section 10(2A))<\/li>\n<li>Return of capital \/ drawings<\/li>\n<li>Revaluation reserves (unless in nature of remuneration\/interest)<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Section_40b_%E2%80%93_Deductibility_of_Partner_Remuneration\"><\/span><span style=\"color: #000080;\"><strong>Section 40(b) \u2013 Deductibility of Partner Remuneration<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>To ensure admissibility of partner payments as deductible expenses:\u00a0 following are <span style=\"color: #000080;\"><strong>Conditions for Deductibility:<\/strong><\/span><\/p>\n<ul>\n<li>Partner must be a\u00a0working partner &amp;\u00a0Remuneration must be\u00a0authorized by the partnership deed.<\/li>\n<li>Partners Payment must relate to period after deed authorization &amp;\u00a0Interest on capital must not exceed\u00a012% p.a.<\/li>\n<\/ul>\n<p><span style=\"color: #000080;\"><strong>Revised Deduction Limits (Effective AY 2025\u201326):<\/strong><\/span><\/p>\n<ul>\n<li>On first \u20b96,00,000 of book profit: INR 3,00,000 or 90%, whichever is higher<\/li>\n<li>On balance book profit:\u00a060%<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>New CAG Policy of Empanelment of CA Firms\/LLPs and Selection of Auditors for Financial Year 2023-24 Introduction In India, Chartered Accountant firms and Limited Liability Partnerships with at least one full-time Fellow Chartered Accountant partner or FCA sole proprietor are eligible to apply for empanelment with the Comptroller and Auditor General of India. The objective &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10103],"tags":[10290],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29293"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=29293"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29293\/revisions"}],"predecessor-version":[{"id":29793,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/29293\/revisions\/29793"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=29293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=29293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=29293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}