Branch auditor appointment and rotation

der is no separate provision for appointment of branch auditor.. it will b same as statutory auditors

Where a company has a branch office, the accounts of that office shall be audited either by

The company’s auditor; or
Any other person, qualified to be and appointed as an auditor as per the provisions of the Act to act as branch auditor under section 139.
where the branch office is situated in a country outside India, the accounts of the branch office shall be audited either by the company’s auditor or by an accountant or by any other person duly qualified to act as an auditor of the accounts of the branch office in accordance with the laws of that country and the duties and powers of the company’s auditor with reference to the audit of the branch and the branch auditor, if any, shall be such as may be prescribed.


Statutory Provisions Contained Under the Act:

As per provision of Companies Act, 2013 Section 143(8): Where a company has a branch office, the accounts of that office shall be audited either by

The company’s auditor; or
Any other person, qualified to be and appointed as an auditor as per the provisions of the Act to act and appointed as such under section 139.
The duties and powers of the company’s auditor with reference to the audit of the branch and the branch auditor, if any, shall be as contained in sub-sections (1) to (4) of section 143 i.e. right of access to books of accounts, ensure about the mandatory books of accounts maintained, prepare auditors’ report and state the reasons of qualification in report, if any etc

The provisions of sub-section (12) of section 143 read with rule 12 hereunder regarding reporting of fraud by the auditor shall also extend to such branch auditor to the extent it relates to the concerned branch.

Interpretation Note:

If we gone through the provisions mentioned above, It is clearly mentioned that. If company appointed a separate auditor as branch auditor to audit the branch office of the Company then such appointment will be as per section 139 (Appointment of Auditor). Provisions of 139 applicable on the statutory auditor are same applicable on the branch auditor.

Conclusion

Hence, considering the provisions of Section 143(8) one can opine that all the provisions of section 139 relating to appointment of statutory auditor are applicable on Branch Auditor also.

Thus, here can opine that there is no separate process for appointment of branch auditor. Whatever process we follow for statutory auditor appointment will be applicable on the branch auditor

Auditor can be single or jointly or partners. All proviso which are applicable to auditor will also be simiarly applicable to brach auditor, cost auditor & Secretarial auditor.

Thanks you Priyanka,Rahul and Sudhir for your replies.

But, require more clearance on whether provisions for rotation of auditor are also applicable to branch auditors also (owing to sec 143(8), which states that "..... appointed as such under section 139" ) ?

 

Yes he also liable to retire by rotation in case such company is :

Listed company
Public company having paid up capital of >= 10 Crore
Private company having paid up capital of>= 20 Crore
Both public and private company having public borrowing 50 Crore or more..

However the aforesaid provision is not applicable for OPC and SMALL Companies

All statutory auditor should not be associate with the company or its group companies. So it's equally applicable to brach statutory auditor also to retire by rotation..

Thanks