Audit and Auditor- Companies Act' 2013
Rotation of Auditor- Section 139(3) & (4) Members of company may resolve to provide that In the audit firm appointed by it, the auditing partner and his team shall be rotated at such intervals as may be resolved The audit shall be conducted by more than one audito rotate their auditors Manner of rotation of auditors by companies on expiry of thei ' The CG may prescribes the manner in which the companies shal term as provided: The audit committee shall recommend to the board, the name of an auditor or firm; BOD shall consider the recommendation of such committeelif AC required), otherwise BOD shall itself consider and appoint next auditor by members in AGM
For the purpose of rotation of auditors o In case of an auditor, the period for which individual or firm has held office as prior to the commencement of the act shall be taken into account for calculating the period of one term or two terms, o The incoming auditor shall not be eligible if such is associated with outgoing auditor under the "same network" * Where company has appointed two or more individuals or firms or combination as joint auditors, the company may follow rotation of auditors in such a manner that both or all joint auditors, do not complete their term in the same year.
FIRST AUDITORS-Section 139(6) Other than Govt. company * Appointed by BOD within 30 days of DOR, and shall hold office till conclusion of first AGM * If board fails, then members will appoint within 90 da an extra general meeting(EGM), and shall hold office ti conclusion of first AGM .Government Company * Appointed by C&AG of India within 60 days from DOR * If C&AG fails, BOD shall appoints within next 30 days If BOD also fails, Members shall appoint within 60 days at an EGM and shall hold office till conclusion of first annual general meeting
Example- Managing Director of PQR Ltd. himself wants to appoint Shri Ganpati, a practicing Chartered Accountant, as first auditor of the company. Comment on the proposed action of the Managing Director. , Answer Provisions and Explanation: Section 139(6) of the Companies Act, 2013 lays down that "the first auditor or auditors of a company shall be appointed by the BOD within 30 days from the date of registration of the company". In the instant case, the appointment of Shri Ganapati, a practicing Chartered Accountant as first auditors by the Managing Director of PQR Ltd by himself is in violation of Section 139(6) of the Companies Act 2013, which authorizes the Board of Directors to appoint the first audito the company.
CASUAL VACANCY Section 139(8 .Other than Govt. Company - * The board may fill any casual vacancy in the office within 30 days b t vacancy is due to RESIGNATION, such appointment shall also be approved by company at a general meeting convened within 3 months of. recommendation & Any auditor appointed in a casual vacancy shall hold office till conclusion of next AGM Government Company * Whose accounts are subject to audit by an auditor appointed bythe C&AG, any casual vacancy of an auditor to be filled by C&AG within 30 days *If C&AG fails, then BOD shall fill vacancy within next 30 d
REAPPOINTMENT OF RETIRING AUDITOR- Section 139(9).(10)(11) At any AGM, a retiring auditor may be reappointed at an AGM, if-. He is not disqualified for re-appointed; He has not given the co. a notice in writing of his unwillingness to be re-appointed; and A SR has not been passed at that meeting appointed some other auditor or providing expressly that he shall not be re-appointed Where at any AGM, no auditor is appointed or re-appointed the existing auditor shall continue to be the auditor of the company
Ca Anubhav Jain
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