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TERM OF AUDITOR

27 November 2017

Sir, If the first auditor(audit firm) is appointed as subsequent auditor in first AGM then
in calculating the term of 5 years, is there any provision to include the term of first auditor in calculating the term of subsequent auditor???
2) if the first auditor is appointed as subsequent auditor it amounts to reappointment????
3) shall company appoint an auditor for any term below five years (other than first auditor)???

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5 Replies

Sameer Mathur (Article) (56 Points)
Replied 29 November 2017

the answer of first part is no

Sameer Mathur (Article) (56 Points)
Replied 29 November 2017

the answer to second part is yes

Sameer Mathur (Article) (56 Points)
Replied 29 November 2017

the term of 5/10 yrs is maximum term & needs to be ratified by the members at every AGM

Rajesh Dandi (5 Points)
Replied 29 November 2017

Is it mandatory to give appointment for 5 years when initially the auditor is appointed ??? If we given appointment for only 1 year then where goes the concept of ratification???

Sameer Mathur (Article) (56 Points)
Replied 29 November 2017

the concept of rotation of auditors applies to listed & prescribed class of companies as per sec 139(2). here again i want to stress on the point that the term 5/10 yrs applies only in case of companies prescribed u/s 139(2).
the period as stated is maximum & as in ur case if members do not ratify appointment at the end of year 1 vacancy shall be created u/s 139(8). however in case of removal of auditor before his term expires, compliance of section 140 is must.