Rotation of auditor in companies bill 2011

The provisions of Rotation of auditors and audit firms in Companies Bill 2011 have been proposed as follows:

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:

Can you please clarify in simple language. Has there been any further amendment in light of recent cabinet approval

Regards,

Dear Dipjyoti,

In the latest amendments, there are following provisions regarding the rotation of auditors,:

8. The limit in respect of maximum number of companies in which a person may be appointed as auditor has been proposed as twenty companies. {Amendment in Clause 141(3) (g)}.

9. Appointment of auditors for five years shall be subject to ratification by members at every Annual General Meeting (Amendment of Clause 139(1).

10. Provisions relating to voluntary rotation of auditing partner (in case of an audit firm) modified to provide that members may rotate the partner `at such interval as may be resolved by members` instead of `every year` proposed in the clause earlier. {Amendment in Clause 139(3)}.

above provisions say that;

If the Auditor is appointed for five years, members can rectify this provision and change the term at every AGM.

Hope this throws clear light on amendments.

Regards,

Aditya