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Appointment of auditor

Every company registered under Companies act, 2013 are required to appoint auditor. eTaxSupport will support you into appoint auditor for your company

Appointment of Auditor under Companies Act, 2013

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Auditors are appointed as per provisions of Companies Act, 2013 for full disclosure of books of accounts. The verification of books of accounts should only be done by authorised person i.e, Chartered Accountants

Auditor is a person appointed as per Companies Act, 2013 to verify accounting data. Only a person certified by the law to handle accounting and auditing with specific qualifications is eligible to be an Auditor. Only a Chartered Accountant is deemed to be an auditor as per Companies Act, 2013

All the government and non-government organizations have to keep track of their accounts and audit reports as the financial year approaches. The financial statements of these firms need to be thoroughly analyzed and assessed before submitting them to the authorized departments. This assessment of financial documents is done by an Auditor. In case of any discrepancy in the reports, the auditor is held responsible. Thus, the requirement of an auditor is a must for every organization.

Process of appointing an Auditor?

There is a process in appointing an auditor for the first time given undee the  provisions of Companies Act, 2013

First appointment within 30 Days:

A company must appoint its first auditor or an auditing firm within 30 days of registration of the company. Such appointments can be made during the Annual General Meeting(AGM) or within 90 days, in an Emergency General Body Meeting by the Board of Directors. The first auditor (or the auditing firm) shall be appointed after approval of the Board of Directors and Shareholders during AGM or EGM whichever is held first. The Auditor shall hold the office till the time when the sixth annual general meeting is held (five years).


Written Consent by Auditor

As there are conditions to be an auditor, proof of qualifications of the appointed person should be given before appointment. A consent in written form should be given by the Auditor in approval of appointment


Notice of Appointment

The company should issue an appointment order to the auditor, and Form, ADT- 1 should to be submitted with the Registrar Of Companies within 15 days of appointment of auditor


The companies listed in Section 139  and Rule 5 of the companies (audit and auditor) rules, 2014, shall not

  •  Appoint an individual as auditor for more than one consecutive five-year tenure;

  • Appoint an auditing firm for more than two terms of five consecutive years


Rights and Duties of an Auditor

  • An auditor has the right to access to the books of accounts of a company whenever he wants

  • An Auditor must protect the interests of members and shareholders of the Company

  • Auditor is responsible for true and fair view of the Company

  • If there are any fraudulent activities taking place, the Auditor must report it to the authorities in charge

  • All the auditing standards must be complied with while auditing the books of accounts

Removal of an Auditor

A company may remove an Auditor either if the Auditor's tenure is completed or if the company is not satisfied with the services of the Auditor

  • If the Auditor has to be removed before completion of tenure of office, prior approval of the Central Government should be taken by submitting the form ADT-2 as prescribed in Rule 7 of the Companies (Audit & Auditors) Rules, 2014.

  • The Auditor must be given a chance to lay his point

  • A special resolution has to be passed before applying for approval of Central Government

  • Once approval from Central Government is received, a General Meeting is to be held within 60 days of such approval for appointing new Auditor


All the provisions and rules given under the Companies Act, 2013 should be followed by an Auditor. If an Auditor fails to comply with the law, penalty shall be charged.

Know about appointment of auditor under LLP Act . Refer Link

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