Introduction

First Auditor of a Company, other than a Government Company, shall be appointed by the Board of Directors within 30 days from the date of Registration of the Company and  in the case of failure of the Board to name such Auditor, it will illuminate the individuals regarding the Company, who will within 90 days at an Extraordinary General Meeting choose such Auditor and such Auditor will hold office till the finish of the First Annual General Meeting. [Section 139(6)]

Types of Auditor

  • First Auditor
  • Internal Auditor
  • Subsequent Appointment of Auditor
  • Secretarial Auditor
  • Cost Auditor

Procedure for appointment of First Auditor

As per section 139(6) the first auditor of the company other than a government company shall be appointed by the Board within 30 days of Incorporation. In case of Board’s failure, an EGM shall be called within 90 days to appoint the first auditor. The law is silent regarding from when this time limit of 90 days be reckoned, it is better to take a stricter view and interpret that the 90 days limit starts from Incorporation rather than expiry of 30 days.

In case of Government Companies the first auditor shall be appointed by the Comptroller and Auditor-General of India within sixty days from the date of registration of the company and in case the Comptroller and Auditor-General of India does not appoint such auditor within the said period, the Board of Directors of the company shall appoint such auditor within the next thirty days; and in the case of failure of the Board to appoint such auditor within the next thirty days, it shall inform the members of the company who shall appoint such auditor within the sixty days at an extraordinary general meeting

Documents required for appointing a new auditor

These forms that need to be filed by the company at the time of appointing an auditor for a company

  • At the time of the First Auditor appointment, submit Form MGT-14 together with proof of the resolution.
  • Form ADT-1 needs to be filed with the ROC (Registrar of Companies)

The ROC requires the following information

  • New auditing firm’s name.
  • New auditing firm’s address.
  • PAN number and email address
  • The length of time for which the firm has been hired.
  • Information about the resigned auditing firm.
  • The new auditor firm’s appointment date.
  • Form ADT-1, digitally signed (along with the signature of the director of the company).