What is the Procedure for the appointment of Auditor – CS Professional
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Following the topic ‘Procedure for the appointment of Auditor’ is discussed below:
Procedure for the appointment of Auditor (SEC.139(1) of the Companies Act, 1956)
- The company has to inform the auditor of his appointment within 15 days of the meeting in which he is appointed as an auditor.
- The Company has to also inform the Registrar of Companies of the appointment within fifteen days of the meeting in which the auditor is appointed.
The Notice of Appointment of the auditor is to be filed with the ROC in Form ADT-1.
The basic information required for filing ADT-1
- (a) CIN of the company.
(b) GLN of the company.
- (a) Name of the Company.
(b) Address of the registered office of the company.
- c) Email id of the company.
- Date of meeting at which the auditor is appointed.
- Category of Auditor – Individual or Firm.
- (a) Income Tax PAN of Auditor.
(b) Name of the Auditor
(c) Membership number of Auditors
- Address of the Auditor
- City, State, Pin Code
- Email id of Auditor
The company also has to pass a Board Resolution to authorize a person to sign and submit ADT-1 with the ROC.
- Obtain Consent of Auditor of his willingness to be appointed as auditor.
- Obtain a Certificate from auditor stating:
(a) That he is eligible and not disqualified for appointment.
(b) The appointment as per the provisions of Act.
(c) The proposed appointment is within the limits.
(d) The list of proceedings against the auditor with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.
- A Certificate from the Auditors u/s 139 of the Companies Act, which should be dated on or before the issue of Notice of AGM. (Auditor Certificate draft)
- Auditors Appointment Letter which should be dated as on Date of AGM. (Auditor Appointment Letter draft)
- AGM Resolution to be dated as of the date of the AGM. (AGM Resolution draft)
- Form ADT-1 which should be dated on or after the date of the AGM. (ADT-1 draft)
Resolutions for Appointment or Removing Auditor (SEC.225 of the Companies Act, 1956)
- 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.
- On receipt of notice of such a resolution, the company shall forthwith send a copy thereof to the retiring auditor.
- Where notice is given of such a resolution and the retiring auditor makes with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company shall, unless the representations are 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 representations having been made; and
(b) Send a copy of the representations to every member of the company to whom notice of the meeting is sent, whether before or after the receipt of the representations by the company;
and if a copy of the representations is not sent as aforesaid because they were received too late or because of the company’s default the auditor may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting, provided that copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Company Law Board is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for defamatory matter; and the Company Law Board may order the company’s costs on such an application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.
- Subsections (2) and (3) shall apply to a resolution to remove the first auditors or any of them under sub-section (5) of section 224 or to the removal of an auditor or auditors under subsection (7) of that section, as they apply in relation to a resolution that a retiring auditor shall not be re-appointed.
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