Introduction:

A Chartered Accountant (CA), as acknowledged under the Chartered Accountant Act, 1949, is recognized as an auditor. According to the Companies Act, 2013, every company is required to appoint an auditor.

Purpose of Auditor Appointment

The role of auditors in a company is to safeguard shareholder interests. Legally bound, auditors review directors' accounts and disclose the company's financial state to the stakeholders, offering an independent opinion to maintain financial health.

Auditor Appointment in Various Company Types

Non-Government Company

Listed/Specified Company

Government Company

Initial Auditor Appointment Post-Incorporation

The Board of Directors must appoint within 30 days of registration, with possible Extraordinary General Meeting appointments within 90 days.

The Board of Directors must appoint within 30 days of registration, with potential Extraordinary General Meeting appointments within 90 days.

Appointment by the Comptroller and Auditor General of India within 60 days, or by Directors within 30 days of incorporation. Members can appoint at an Extraordinary General Meeting within 60 days.

An auditor is appointed at the first AGM with written consent and an auditor's certificate, holding office until the 6th AGM, abiding by specified conditions.

Appointment by members for up to 5/10 consecutive years, requiring a 5-year cooling period before re-appointment.

Appointment by the Comptroller and Auditor General of India within 180 days from April 1st.

Subsequent Auditor Appointment

Appointment by members, holding office until the end of the 6th meeting.

Members appoint for a maximum 5/10-year term.

Comptroller and Auditor General of India appoints within 180 days from April 1st.

Casual Vacancy Due to Resignation or Other Reasons

Appointment by members within three months of Board recommendations, holding office until the next AGM.

Appointment by members within three months of Board recommendations, holding office until the next AGM.

Appointment by the Comptroller and Auditor General within 30 days.

Appointment of Non-Retiring Auditor by Special Notice

If appointing a new auditor or ceasing re-appointment of the retiring auditor, a special notice under Section 115 of the Companies Act, 2013, is mandatory, stating the proposition at the forthcoming AGM.

If the retiring auditor served a 5 or 10-year consecutive term, the special notice can be omitted. For special notices, consider:

• Auditors may write a representation, requesting member notification, leading to:
• The company stating representation in meeting notices.
• Sending representation copies to members notified about the meeting.
• If not sent, filing the representation with the Registrar.
• On receiving a special notice for auditor removal, the company sends it to the retiring auditor.
• Representation should be concise.
• Ensure the special notice is timely for member circulation.
• If timely notification is missed, the auditor can request reading the representation in the meeting.

If Tribunal Finds Auditor Rights Misused, Based on Applications from Company or Aggrieved Parties:

• A representation copy may not be sent.
• The representation does not need reading at the meeting.

Disclaimer: Information herein is for educational purposes only, not creating an attorney-client relationship. It is not a substitute for legal advice from a licensed attorney.