Auditors related compliance

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Auditors related compliance’s under Companies Act 2013
An auditor who is expected to make an independent report to a company’s members is well
regulated through the company law.
Its appointment, reappointment, ratification, resignation are well defined in Companies Act
2013. The independent auditor has a responsibility to his profession, the responsibility to
comply with the standards accepted by his fellow practitioners. The professional
qualifications required of the independent auditor are those of a person with the education
and experience to practice as such.
FIRST AUDITOR – APPOINTMENT UPTO FIRST AGM ONLY
As per section 139 (6), First auditor, either appointed in the Board of Directors or in
extraordinary general meeting, shall hold office up to first AGM only.
The First Auditor shall hold office till the conclusion of first AGM. However No time period is
mentioned for Board to inform the members about the Non appointment of first auditor. If
a casual vacancy is rising by resignation, then the vacancy shall be filled by the Company in
its meeting within 3 months from the date of the recommendation of the Board. Whereas
casual vacancy is rising by other than resignation, then the vacancy shall be filled the Board
within 30 days..
APPOINTMENT FOR 5 YEARS
As per Section: 139 (1)Every company shall, at the first annual general meeting, appoint an
individual or a firm as an auditor 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. The tenure of 5 consecutive years is subject to ratification by
shareholders at every AGM.
RATIFICATION OF AUDITOR:
As per Section 139 (1), the Company shall place the matter relating to such appointment for
Ratification by members at every Annual General Meeting. Companies are required to ratify
the appointment of Statutory Auditors who was appointed in last AGM for 5 financial years.

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RESIGNATION OF AUDITOR
The auditor must give reasons for resignation with ROC within 30 days along with
resignation letter. The 30 days time for filing ADT-3 with the ROC starts from the date of
resignation i.e. the date written in the resignation letter. The auditor is required to file a
statement specifying the reasons and fact of resignation within 30 days of resignation with
ROC and the company or CAG in case of Govt. Companies. If the auditor fails to comply with
the above mentioned provisions then he shall be punishable with fine of Rs. 50,000- Rs.
500,000.