No listed company or a company belonging to such class or classes of companies shall appoint or re-appoint:-
|
An individual |
For more than one term of five consecutive years |
|
An audit firm |
For more than two terms of five consecutive years |
An individual auditor or an audit firm who/which has completed his/its term as specified above shall not be eligible for re-appointment as auditor in the same company for five years from the completion of his term. A break in term for a continuous period of 5 years shall be considered as a break for fulfilling the requirement of rotation
On the date of appointment no audit firm having a common partner or partners to the other audit firm, whose tenure has expired in a company immediately preceding the financial year shall be appointed as auditor of the same company for a period of five years.
Every company existing on or before the commencement of this Act which is required to comply with provisions of this sub-section, shall comply with the requirements of this sub-section within three years from the date of commencement of this Act
Rotation of Auditors will not apply to the following classes of Companies
i. One Person Companies
ii. Small Companies
iii. Dormant Companies
Rotation of Auditors will apply to the following classes of Companies
|
Type of company |
Paid up share capital / Public borrowing |
Public Borrowing from banks / fi’s OR Public deposits |
|
|
Listed Companies |
All |
All |
|
|
Unlisted public companies |
Rs 10 crore or more |
OR |
Rs 50 Crores or more |
|
Private limited companies |
Rs 20 crore or more |
OR |
Rs 50 Crores or more |
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