Tenure of auditor from incorporation

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This query is : Resolved

Raj Raj (Querist)

24 January 2018 Companies Act, 2013 says first auditor to be appointed by the Board of Directors within 30 days of incorporation. First Auditor will hold office till the conclusion of first AGM.

Thereafter, Auditor can be appointed for a period of 5 years from the conclusion of first AGM till the conclusion of 6th AGM. In the case of audit firm, they can be re-appointed from 6th AGM to 11th AGM.

My query is in this case, the tenure of auditor exceeds 10 years from the date of appointment by the Board. Is this logic correct?

CA Suresh Jain

CA Suresh Jain (Expert)

24 January 2018 The section 139(2) does not use the words "Ten Years" instead it says
No listed company or a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint—
(a) an individual as auditor for more than one term of five consecutive years; and
(b) an audit firm as auditor for more than two terms of five consecutive years
Therefore, there is nothing wrong

Raj Raj

Raj Raj (Querist)

24 January 2018 thank you for the clarification

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