Appointment of auditor

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Is tenure for appointment of auditors mandatory to be for 5 years or lesser period is possible. Incase of a private company
Replies (10)
Yes it is mandatory for 5 years irrespective of which type of company it is only rotation is not applicable if it satisfies the conditions under Rule 5 of Companies audit and auditors rules 2014
No ,Not mandatory to appoint for 5 Years....
Mr chirag sir you are absolutely wrong
Mr. achuth ,give me interpretation of provision where it's mandatory to appoint Auditor for continuous period of 5 Years...Rules and section says about appointment " Which will be till the conclusion of 5th AGM".... here word "till" if interpreted gives impression of up-till 5th AGM....I have seen many companies which are appointing auditor for lesser than 5 Years, and it's absolutely correct,( If there is any ministry clarification on the same) then provide me link of it...
Please go through section 139(1) it has never used the word term of 5 years like it has used in 149(10) of Companies Act 2013 the word 'shall' is used in section 139(1) with respect to holding office the word 'till' is used to denote that his right as an auditor as per 4th proviso to section 139(2) is not undermined even if he is appointed for a period of 5 years

APPOINTMENT SHOULD BE RATIFIED BY SHAREHOLDER EVERY YEAR,
IF SHAREHOLDER DO NOT RATIFY CURRENT AUDITOR,  THEN NEW APPOINTMENT SHALL BE CALL

@ Tarun sharma that provision is no more read first proviso to section 139(1) and proviso to Rule 3(6) of Companies (Audit and Auditor) Rules 2014
No, the auditor can be appointed for less than 5 years but the cooling period should be five years from the time when the auditor has completed his tenure or when he was disqualified
Sorry it is wrong it is because of the fixed term auditor can be removed only by way of special notice in an AGM 140(4)

As per section 139(1) of the Companies Act 2013, the auditor shall be appointed for the period of 5 years from the conclusion of first AGM till the conclusion of sixth AGM . But for private Limited Company if the Company are below the treshold limit, the provisions of rotation of auditor is not applicable , so auditor can be further appointed for 5 years for n no of years. But if rotation of auditor is appliacble, then Company cannot appoint the firm as the auditor for two terms of five years and individual for one term of five year and after the expiry of the term, the same auditor cannot be appointed for five years .i.e. the cooling off period.


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