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Rotation of Joint Auditors. Companies Act 2013

28 September 2020

As per Co" Act 2013, " Where a company has appointed two or more individuals or firms or a combination
thereof as joint auditors, the company may follow the rotation of auditors in such a
manner that both or all of the joint auditors, as the case may be, do not complete
their term in the same year"

Why the joint audiors do not complete their term in the same year? what is the explanation for the above restriction?

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1 Replies

CA Amrita Chattopadhyay (Audit & Assurance) (13459 Points)
Replied 02 October 2020

The joint auditors are appointed to ensure that the work is equitably distributed & all the requisite areas are covered or it may be sometimes due to requirement of laws & regulations of the land. When a new auditor is appointed, it becomes a challenge for the auditor as well as auditee to get familiarize with the organization. Ensuring that one of the auditors of the joint auditors holds the office ensures the continuity of the audit. As per SA 299, it is important to have effective communication between the joint auditors. Thus, most of the information can be obtained from one of the auditor.