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Appointment of Auditors
All you need to know
Who is an Auditor?
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.
Any individual trained to review and verify accounting data and recognised as a Chartered Accountant (CA) under the Chartered Accountant Act 1949 is deemed to be an auditor.
Qualifications of an Auditor:
- A person is eligible for the appointment as an auditor only if he is a Chartered Accountant.
- A firm is eligible for the appointment as an auditor only when the majority of its partners are Chartered Accountants practicing in India.
- In the case where a limited liability partnership firm is appointed as auditor, only the partners who are Chartered Accountants will be authorized to act and sign on behalf of the firm.
Failure to Appoint Auditor:
In case of failure of the Board of Directors to appoint an Auditor, within 30 days of incorporation of the company, then the Board should inform the members of the company about the failure to appoint Auditor. The members can then within 90 days at an extraordinary general meeting, appoint an auditor and the auditor would hold office till the conclusion of the first annual general meeting.
If in case, at any annual general meeting, no auditor is appointed or re-appointed, then the existing auditor of the company would continue to be the auditor of the company.
Appointment of an Auditor is significant in a company that analyses and understands a company’s financial records to deliver effective analyses and relevant information. Management can use this information to evaluate the company and implement measures necessary to meet their objectives.
ThinkBiZ Filings.com is an eminent business platform and a progressive concept, which helps end-to-end incorporation, compliance, advisory, and management consultancy services to clients in India and abroad. Changing Registered Office is easy, seamless, cheapest and quickest with ThinkBiZ Filings.com! Apart from an Auditor Appointment, ThinkBiZ Filings also helps entrepreneurs with Private Limited Company Registration, Public Limited Company Registration, LLP Registration, HUF, One Person Company and all other compliance easily. You may get in touch with our compliance manager on 09704561215or email info@Thinkbizfiling.com for free consultation.
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ESSENTIAL
- Documents Preparation
- Appointment or Resignation of Auditor
Compliance Requirements for a Partnership Firm
Documents Required for Partnership Firms
Key Benefits of a Partnership Firm
Points to make your decision easy
Our most honorable clients
- An auditor is a qualified professional (CA) appointed to examine a company’s financial records and ensure compliance with accounting standards and legal requirements.
- Yes, every company (except sole proprietorships and partnership firms) must appoint an auditor as per the Companies Act, 2013.
- Who can be appointed as an auditor?
- The Board of Directors must appoint the first auditor within 30 days of incorporation. If not, shareholders appoint the auditor within 90 days in a general meeting.
- The auditor is appointed in the Annual General Meeting (AGM) for a term of 5 years (for companies other than Government companies).
- Form ADT-1 is filed with the Registrar of Companies (ROC) within 15 days of the appointment. Eligibility & Disqualifications
- 📌 The following persons are disqualified from being appointed: ❌ A body corporate ❌ An officer or employee of the company ❌ A partner of an officer/employee of the company ❌ A person holding securities in the company
- The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of the proposed Company. Digital Signature application is to be filed to get a DSC.
- Yes, but in case of listed companies and specific public companies, an audit firm cannot be appointed for more than two terms of 5 years each.
- Yes, the auditor must file Form ADT-3 with ROC and state the reasons for resignation. 1️⃣1️⃣ How can an auditor be removed? 📌 The company must pass a special resolution and get approval from the Central Government for removal before term completion. 1️⃣2️⃣ What happens if a company fails to appoint an auditor? 📌 The ROC may impose penalties, and the company may face legal action under Section 139 of the Companies Act.
- Don’t worry!! Our expert will help you to choose the best suitable plan for you. Get in touch with our team to get all your queries resolved. Write to us at info@thinkbizfiling.com or call us @+91 970 456 1215
