Auditor appointment

Hi,

Before accepting the appointment as the auditor of the company, you should ensure that the Company has removed the previous auditor as per the process provided in sec. 140 (1), which are reproduced below.

Section 140 : Removal, Resignation of auditor and giving of special notice

• The auditor appointed u/s 139 may be removed from his office before the expiry of his termonly by way previous approval of CG and a special resolution of the company to be passed in a general meeting within 60 days of receipt of approval of CG. However, before such step, the auditor shall be given a reasonable opportunity of being heard.  The application to CG has to be made within 30 days of passing the board resolution. (Form No. ADT- 2 along with fees).

The   issue raised   is  on  lack of communication 

The incoming Auditor need to communicate  in writting with the old Auditor  enquiring whether there is any professional or other reasons why  the offer  should not be accepted by him ( newauditor) 

This communication has to be  by regd post or by hand delivery with acknowledgement 

If there is no reply  within a reasonable time  the new Auditor can go ahead  

In case the old auditor replies  the new auditor need to ascertain the reasons . For  Eg  non payment of fees , Issue of  qualified report  etc .  The new auditor need to safe guard his professional interest .  In case of   non payment of fees     the new auditor should take steps to ensure that the old auditor is paid   . 

The requirement of communication is in no way to prevent  the change  but for the protection of the interest of the profession 

There can be no hurdles as you apprehend  . You may consider your relationship with the old auditor  and should not be too enthusiastic 

Reason for removal  is seemingly not  the look out of  the incoming auditor  , of course you may enquire it .  Compilation of accounts , filing MCA  / Tax returns  should not  not be mixed with Audit 

All the best