As per section 139(6) of Companies Act 2013, Private Limited company & One Person Company has to appoint its first auditor within 30 days from the date of incorporation in a board meeting. If board of directors are not able to appoint then it has to be appointed within 90 days in a general meeting of members.
First auditor as appointed is required to hold office till the conclusion of first annual general meeting. Companies Act 2013 does not require any form to be filed with ROC but this is a requirement of law and it has to be complied within time.
Only Practicing Chartered Accountant can be Auditor of the company.
Intimate the proposed auditor(s) regarding the intention of appointing him/it as auditor and ask whether he/ it is eligible and not disqualified to be appointed as auditor of the company.
Obtain consent & certificate from auditor.
Approve the appointment of auditor at the first Board Meeting.
As per section 139(1) every company shall appoint at its 1st annual general meeting an individual or a firm as an auditor of the company who shall hold office who shall hold office from the conclusion of that meeting till the conclusion of its sixth annual general meeting and thereafter till the conclusion of every sixth meeting.
Tenure subject to ratification :- The tenure of 5 consecutive years is subject to ratification by shareholders at every AGM.
Remuneration: – As per section 142(1) remuneration of the auditor of a company shall be fixed in its general meeting or in such manner as may be determined therein.
Written consent and certificate from the auditor :- As per 2nd proviso to section 139(1) auditor has to give a written consent to become auditor of the company & a certificate stating that appointment is in accordance with conditions prescribed.
Intimation to Auditor & ROC :- The company shall inform the auditor regarding appointment and also file a form ADT-1 to ROC within 15 days of the meeting in which the auditor is appointed.
RE-APPOINTMENT OF AUDITOR
After completion of tenure of 5 consecutive years the auditor may be re-appointed by complying with the provisions of section 139(9) which states that subject to the provisions of sub-section (1) & the rules made thereunder, a retiring auditor may be re-appointed at an annual general meeting, if-
He is not disqualified for re-appointment.
He has not given the company a notice in writing of his unwillingness to be re-appointed
A special resolution has not been passed at that meeting appointing some other auditor or providing expressly that he shall not be re-appointed.
Powers and duties of auditors
Every auditor of a company shall have a right of access at all times to the books of account and vouchers of the company, whether kept at the registered office of the company or at any other place and shall be entitled to require from the officers of the company such information and explanation as he may consider necessary for the performance of his duties as auditor.
The auditor shall make a report to the members of the company on the accounts examined by him and on every financial statements which are required by or under this Act to be laid before the company in general meeting and the report shall after taking into account the provisions of this Act
If any auditor, cost accountant or company secretary in practice do not comply with the provisions he shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees.
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