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Appointment of auditor for the f.y. 2016-17

ASHISH JAPPI (PROPRIETOR) (40 Points)

31 March 2016

can an auditor who is auditor for last 15 years be appointed at AGM of 2016 as statutory auditor

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3 Replies

Megha Choudhary (Management Trainee) (541 Points)
Replied 31 March 2016

he cant be appointed

CS Arjun Rajagopal (B.com, ACS) (1056 Points)
Replied 31 March 2016

Originally posted by : ASHISH JAPPI
	can an auditor who is auditor for last 15 years be appointed at AGM of 2016 as statutory auditor

Hi Ashish,

As per Section 139(1) of the Companies Act, 2013 every auditor must be appointed for 5 years by members at the AGM and thereafter if the members approves in the AGM reappoint again for 5 years.

If sub section (2) of Section 139 which is reproduced below is not applicable then you may reappoint the same person as auditor for next 5 years ie up to the AGM of 2021 and file ADT-1 with ROC within 15 days of AGM. Also the auditor should not be disqualified u/s 141 for his reappointment.

Pls note that this section was notified on 01.04.2014. So you were required to comply with this section for FY. 14-15 onwards.

As per Section 139(2) of the Companies Act, 2013 rotation of auditors is compulsory for following class of companies:-

1. All unlisted public comps having paid up share capital of Rs. 10 crore or more.,

2. All private comps having paid up share capital of Rs. 20 crore or more.,

3. All Listed Comps.,

4. All comps having paid up share capital of below threshold limit mentione in category 1 and 2, but having public borrowings from financial institutions, banks or public deposits of Rs. 50 crore or more.,

If your company falls into any of the above category then following provision is applicable

(2) 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:
Provided that—
(i) an individual auditor who has completed his term under clause (a) shall
not be eligible for re-appointment as auditor in the same company for five years
from the completion of his term;
(ii) an audit firm which has completed its term under clause (b), shall not
be eligible for re-appointment as auditor in the same company for five years from
the completion of such term:
Provided further that as 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:
Provided also that 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:
Provided also that, nothing contained in this sub-section shall prejudice the right of
the company to remove an auditor or the right of the auditor to resign from such office of the
company.