This document summarizes key provisions around the appointment and removal of auditors under Section 139-140 of the Companies Act 2013. It discusses the periods of appointment for individual and audit firm auditors, requirements around rotation of auditors and filling casual vacancies. It also outlines the process for reappointing retiring auditors, circumstances allowing removal of auditors before the end of their term, requirements for auditor resignation, and removal of auditors by the central government.

1. BHARATHI KUKUTLA
ASSOCIATE PROFESSOR

2. APPOINTMENTOF AUDITORSSEC139
SEC 139(1) Appointment of auditor by members
SEC139(2) Period for appointment to be made
SEC139(3) Rotation of auditor
SEC139(5) Appointment auditor of Govt company
SEC139(6) Appointment of first auditors
SEC139(7) First auditor of a govt company
SEC139(8) Casual vacancy
SEC139(9) Reappointment of a retiring auditor
SEC139(10) Existing auditor continue
SEC139(11) Audit committee

4. PERIODFORWHICHAPPOINTMENTTOBE
MADE139(2)
INDIVIDUAL
For five years
AUDIT FIRM
2 terms of five
years

5. ROTATIONOF AUDITORS139(3)
• The member of the company may
resolve the rotation of partner and his
team after certain intervals or audit to
be conducted by more than one auditor.

6. CASUALVACANCYOF AUDITOR139(8)
Government
Company
Comptroller and
auditor general of
India
With in 30 days
Board fill the
vacancy with in next
thirty days
Non Government
Company
Board of directors
with in thirty days
If it is resignation
Approved by
Company

7. REAPPOINTMENT OF A RETIRING AUDITOR
139(9)
He is not disqualified for reappointment
Not given any notice to company of his unwillingness
A special resolution has not passed not to appoint some
other person

8. Sec 139(10)
• No auditor is appointed or reappointed at annual
general meeting the existing auditor shall continue to be
the auditor of company

9. RECOMMENDATIONOD
AUDITCOMMITTEE139(11)
• If audit Committee under sec177 is constituted all appointments
of auditor shall be made after considering recommendations of
such committee.

10. QUALIFICATIONSOF AN AUDITORSEC141
• QUALIFICATIONS:

11. BHARATHIKUKUTLA
ASSOCIATEPROFESSOR
REMOVALOFAUDITOR

12. REMOVALOFAUDITOR
REMOVAL OF AUDITOR BEFORE EXPIRY OF HIS TERM SEC140(1)
RESIGNATION BY AUDITOR SEC140 (2) &(3)
SPECIAL NOTICE FOR NOT REAPPOINTING THE RETIRING AUDITOR SEC140(4)
REMOVAL BY CENTRAL GOVERNMENT SEC 140(5)

13. REMOVALOF AUDITORS
SEC140(1)
Special Resolution
should be passed
Central government
approval within
30days from AGM
Reasonable
opportunity be given
REMOVALOF AUDITOR BEFORE EXPIRY OF TERM

14. RESIGNATIONBY AUDITORSEC.140(2)&(3)
STATEMENT
WITH IN
30DAYS
Registrar
Company
CAAG
Reasons and other facts
relevant with regard to his
resignation.
Shall be punishable with
fine not less than fifty
thousand rupees which may
extend to five lakh rupees.

15. SPECIAL NOTICE FOR NOT REAPPOINTING THE RETIRING
AUDITOR
(i) Special notice shall be required for a resolution at an annual general meeting
appointing as auditor a person other than a retiring auditor, or providing expressly
that a retiring auditor shall not be re-appointed, except where the retiring auditor
has completed a consecutive tenure of five years or, as the case may be, ten years,
as provided under sub-section (2) of section 139.
(ii) On receipt of notice of such a resolution, the company shall forthwith send a
copy thereof to the retiring auditor.
(iii) Where notice is given of such a resolution and the retiring auditor makes
with respect thereto representation in writing to the company (not exceeding a
reasonable length)

16. Contd…….
and requests its notification to members of the company, the company shall,
unless the representation is received by it too late for it to do so,—
(a) in any notice of the resolution given to members of the company, state the
fact of the representation having been made; and
(b) send a copy of the representation to every member of the company to whom
notice of the meeting is sent, whether before or after the receipt of the
representation by the company,

17. Removal by Central Government
 the application is made by the Central Government and the
Tribunal is satisfied that any change of the auditor is required, it
shall within fifteen days of receipt of such application, make an
order that he shall not function as an auditor and the Central
Government may appoint another auditor in his place:
 Provided further that an auditor, whether individual or firm,
against whom final order has been passed by the Tribunal under
this section shall not be eligible to be appointed as an auditor of
any company for a period of five years from the date of passing of
the order and the auditor shall also be liable for action under
section 447