Appointment of First Auditors by Company

Every company other than a Government company shall appoint its first auditor within 30 from the date of registration of the company. Boards of Directors of the company have to do the appointment of first auditors within the required time.

Who can be the Auditor?

A Chartered Accountant who holds a valid certificate of practice can only be appointed as the Statutory Auditor of the Company. A company may also appoint a firm as auditor of the company in which majority of partners practicing in India are qualified for appointment as auditor.

Term of appointment of First Auditor. 

The first auditor appointed by the Board of Directors or by the Extraordinary General Meeting shall hold office till the conclusion of the first Annual General Meeting.

What happens if Board of Directors fails to appoint the first auditor in time?

In case the Board of Directors fails to appoint the first auditor within thirty days from the date of registration of the company, the members of the company have to appoint the first auditor at an Extraordinary General Meeting with in 120 days from the date of registration of the company.

Consent & Certificates from Proposed Auditor

The Company has to obtain a written consent from the auditor for such appointment and a certificate from him stating that the appointment, if made, shall be in accordance with the conditions as may be prescribed and that the certificate shall also indicate whether the auditor satisfies the criteria provided in section 141 of the Companies Act, 2013.

Filing of Form ADT-1: Is it Mandatory?

Filing Form ADT-1 with ROC office is not mandatory for appointment of First Auditor under the Companies Act, 2013. Filing of Notice of appointment of Auditor in Form ADT-1 with ROC office is mandatory in case of appointment of Auditors at Annual General Meeting (AGM)

However, it is advisable to file notice of appointment with the Registrar as the Service Request Number (SRN) of form ADT-1 will be required to be referred while filing Form ADT-1 for appointment of new auditor, in case the first auditor is vacated from his office.