Peer Review vs Quality Review (QRB) — What's the Difference for CA Firms?

Indian Chartered Accountants often hear about two parallel quality-assurance regimes from the ICAI:

1. Peer Review — administered by the Peer Review Board (PRB) 2. Quality Review — administered by the Quality Review Board (QRB)

Both exist. Both are mandatory in certain situations. Both can result in adverse outcomes. But they're different in objective, scope, frequency, and consequence. Confusing them can lead to compliance gaps.

This post lays out the comparison cleanly.

Quick comparison

Dimension	Peer Review (PRB)	Quality Review (QRB)
Authority	Peer Review Board, ICAI	Quality Review Board (statutory body under CA Act)
Purpose	Quality assurance of firm-level systems + sample-based assurance test	Quality review of specific audit engagements (esp. listed entities)
Scope	The firm's entire assurance practice for the review period	Specific listed-entity audit (single engagement)
Trigger	Mandatory category, voluntary, or special case	QRB Board's annual programme + risk-based selection
Reviewer	Empanelled Peer Reviewer (another CA)	QRB-empanelled Reviewer (often retired CA or technical expert)
Cycle	3 years (firm-level)	1-2 years per engagement reviewed
Forms	Form 1 through Form 10 + Annexures I/II/III	QRB Reports format
Outcome — clean	Peer Review Certificate (3-yr / 18-mo)	"No major observations" report
Outcome — adverse	Qualified Report → Follow-On Review (Cl. 13(3))	QRB negative observation → -5 points in AQMM negative-marking; can escalate to Disciplinary Directorate
Public disclosure	List of peer-reviewed firms on ICAI website	QRB reports referenced in PRB Annexure III negative-marking

What does PRB Peer Review do?

Peer Review under the Peer Review Guidelines 2022 evaluates a CA firm's overall assurance practice — not a single audit. The reviewer:

1. Reviews SQC 1 compliance (Quality Control Standards) firm-wide 2. Samples a portion of audit engagements (per Annexure B size table + 10 selection criteria) 3. Tests each sampled engagement against applicable Standards on Auditing 4. Issues an opinion: Unqualified, Qualified, or (rarely) Adverse 5. Recommends Follow-On Review if the report is Qualified

The certificate, once issued, is valid for 3 years and is needed for the firm to continue auditing in mandatory categories (listed entities, banks, NBFCs > ₹100 cr, etc.).

What does QRB Quality Review do?

QRB is a statutory board established under the CA (Amendment) Act 2006 with specific jurisdiction over:

1. Audits of listed entities + companies above specified thresholds 2. Audit quality from a single engagement perspective (not firm-wide) 3. Risk-based selection — QRB picks which audits to review each year 4. Outcomes are reported to the Council of ICAI

A QRB review focuses on:

• Whether the audit followed Standards on Auditing properly
• Whether the audit evidence supported the audit opinion
• Whether the auditor's independence was demonstrably maintained
• Whether the engagement-specific risks were properly identified and addressed

How they interact

The two regimes are designed to be complementary, not redundant:

• Peer Review ensures the firm's overall quality-control system is robust → applies to ALL the firm's assurance work in aggregate
• Quality Review does deep-dive engagement-level testing on selected high-stakes audits → applies engagement-by-engagement

Adverse QRB observations have direct consequences in Peer Review: they're a negative-marking item in AQMM Part C (Section 3, -5 points). So a firm with a recent QRB negative review automatically loses 5 AQMM points in its next Peer Review.

Which one applies to your firm?

Your firm profile	PRB Peer Review?	QRB Quality Review?
Small firm, no listed clients	✓ if voluntarily applied	Generally not
Firm with NBFC ≥ ₹100 cr audit	✓ Mandatory	Generally not
Firm auditing listed entity	✓ Mandatory + AQMM + Annexure III	✓ Possible (QRB selection)
Firm auditing bank / insurance	✓ Mandatory + AQMM	✓ Possible (QRB selection)
New Unit (< 12 months)	✓ 7-WD short cycle	No
Branch audit only	✓ Mandatory (no AQMM)	No

Frequency

• Peer Review: Once every 3 years (firm-level)
• QRB Quality Review: Per QRB's annual selection — could be 0 or 1 reviews of your audits in any given year

Reviewer's role differs too

• Peer Reviewer (PRB): Reviews YOUR firm's system + samples. Empanelled CA. Files Form 2-9. Cl. 26-27 eligibility.
• QRB Reviewer: Reviews YOUR specific listed-entity audit. Often a former technical partner of a large firm. Reports to QRB Board.

What outcomes mean for the firm

Peer Review outcomes

• Unqualified Report → 3-yr certificate, firm continues normally
• Qualified Report → certificate may still be issued, but Follow-On Review ordered in 6-12 months
• Persistent issues → Sub-Committee report → may refer to Disciplinary Directorate

QRB outcomes

• "No major observations" → Report stays internal to QRB / Council
• Material concerns identified → Reported to Council; published in ICAI Annual Report; -5 in AQMM next time
• Severe concerns → Referred to Disciplinary Directorate

What both regimes share

• Both are CA-on-CA professional review, not regulator-led
• Both are confidential — working papers and findings don't go to clients or to the public (with limited exceptions)
• Both can result in disciplinary referral if findings warrant
• Both contribute to public trust in Indian audit quality
• Both don't replace each other — they're parallel, complementary

Bottom line

If you're a CA firm, you'll go through Peer Review every 3 years (mandatory if you fall in any category A-K). QRB Quality Review is a separate, risk-based process that may or may not pick up your specific listed-entity audits in any given year. Plan for both.

The good news: a firm that does Peer Review well — with honest AQMM, robust SQC 1, and clean engagement files — also tends to do well in QRB. The same disciplines support both.

Want a check-up before either review? Our Form 1 Filing Tool walks the SQC 1 questionnaire end-to-end, which is the foundation for both. WhatsApp CA Jatin Tagra at +91 99531 40464.