• In 2013, the parliament of India passed companies ACT 2013 on Indian company law. The act regulates the affiliation of a company, dissolution of companies, and directors.
• The provisions of 2013 deal with the Auditors of the company. A crucial role is played by the Auditors of the company towards the stakeholders of such a company.

FORMAT FOR APPOINTMENT OF FIRST AUDITOR

• Except for government companies, the first auditor of a company will be appointed by the BOARD OF DIRECTORS. The company has to make the appointment within 30 days of the incorporation of the organization. 
• Suppose the BOARD OF DIRECTOR failed to appoint the first auditor within 30 days. Then EOUM will be conducted by sending a notice to members. Then the auditor will be set within 90 days from the date of failure to appointment. The company will be under the appointed auditor until the interpretation of the first annual general meeting (AGM).

FORMAT OF INTIMATION BY THE COMPANY TO AUDITOR OF HIS (APPOINTMENT/RE-APPOINTMENT)

DATE

ADDRESS OF THE AUDITOR/FIRM

Dear Sir,

Sub: – Re-appointments as statutory Auditors of a company

As a recommendation to the above subject, we are Re-appoint you/your firm as the Statutory Auditors of a company……………..to the Annual General Meeting.

Signature of Auditor

COURSE OF ACTION FOR APPOINTMENT OF AUDITOR

• The recommended auditor relates the inner motives of presenting him as an auditor and questions if he is permitted and qualified to be designated as the company’s auditor.
• Call Board meeting.
• Accept the interview of an auditor at the first board meeting.
• If the adult cabinet wants to be constituted under section 177, then create a recommendation (Section 139(11).
• Confidential with the auditor and file with the ROC form ADT-1( attached in GNL-2 as per MCA circular 09/2014. Dated April 25, 2014) within 15 days.
• Take consent and certificate from the auditor. 

FATE OF AUDITOR AT 1st ANNUAL GENERAL MEETING (AGM) 

• The auditor will be appointed to hold a company till the conclusion of the sixth Annual General Meeting. This decision is taken from the results of the first annual general meeting.
• For an individual, the period of an auditor of a company will be consecutive five years.
• In the case of an auditor firm, this duration is consecutive (5 Years).
• In the case of a government company or company controlled by CG/SG/CY and SG139(*).
• Here the first auditor of the company is appointed by CAG. This process is done within 60 days of the enrollment of the company.
• If CAG doesn’t assign the first auditor within the given duration, then a notice will be sent to members if members are duties to appoint an auditor within 60 days at EGM.

ON FOLLOWING MATTERS, EDITORS ARE ASK TO ISSUE CERTIFICATES TO THE COMPANY UNDER SECTION 189 (1) OF THE COMPANY ACT 2013

1. Auditor/The firm should fulfill the criteria provided under section 141 of the company’s act 2013.
2. Auditor/The firm should satisfy all certain eligibility companies work, 2013 and chartered accountants act, 1949 and all norms under them.
3. Appointment of the auditor/firm should be made by or under the companies’ authority, 2013.

NOTICE TO REGISTRAR OF STATEMENT TO AUDITOR

• In 15 days of the annual general meeting (AGM):- The Company has to check thoroughly that he is eligible for this. The company should inform the auditor that the one has been appointed on his post; secondly, the company should file the notice of the author’s appointment within ROC in form-ADT-1 and file with ROC. [As per MCA circular number 09/2014. DATED:- April 25, 2014.  

M/s Dinesh J. Shah & Associates is a practicing CA firm in the field of Taxation, GST, Audit, Project Finance, and Government Subsidy for more than 20 years. If you need further clarification/query, you can contact us on 9825373707 or mail at info@djshahca.com or officeidk@gmail.com.