Appointment of Statutory Auditor in case of Government Companies


0

Appointment of Statutory Auditor in case of Government Companies

As per Section 139 of the Companies Act 2013: In case of Government company or any other company owned or controlled, directly or indirectly, by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, the appointment of the auditor will be as per the procedure mentioned below:

First Auditor Appointment {Section 139(7)}

Who and When ??: The first auditor shall be appointed by the C&AG (Comptroller and Auditor-General) of India within 60 days from the date of registration of the company.

What if C&AG Fails to appoint First Auditor??: If C&AG fails to appoint the first auditor then Board of Directors of the company shall appoint such auditor within the next 30 days i.e. (60+30=90).

What if C&AG and Board both Fails to appoint First Auditor??: If C&AG & Board both fails to appoint the first auditor then Board shall inform the members of the company who shall appoint such auditor within the 60 days at an EGM (Extra-Ordinary General Meeting) (i.e.within 60 days from the date of received of the information by the member for appointment of the auditor).

Tenure of the First Auditor: The first auditor shall hold office till the conclusion of the first annual general meeting.

Consent from the Auditor: Written consent of the auditor to such appointment, and a certificate shall be obtained from the auditor.

Resolution: Appointment of First auditor by passing of Board Resolution whether in the Meeting of Board of Directors or by Circular Resolution on the recommendation of the Comptroller and Auditor General.

ROC Form: There is no need to file ADT-1 for appointment of the First auditor.

Subsequent Auditor Appointment {Section 139(5)}

Who and When ??: The C&AG (Comptroller and Auditor-General) of India shall appoint the auditor within a period of 180 days from the commencement of the financial year and who shall hold office till the conclusion of the annual general meeting.

Tenure of the Subsequent Auditor: Subsequent auditor shall hold office from the conclusion this annual general meeting till the conclusion of the next Annual General Meeting (AGM).

Consent from the Auditor: Written consent of the auditor to such appointment, and a certificate shall be obtained from the auditor.

Resolution: Appointment of auditor in Annual General Meeting and the fixing of the remuneration of the auditors shall be an ordinary business to be transacted at an annual general meeting of a Company. Company will pass ordinary resolution for the same.

ROC Form: Company shall inform the ROC by filling Form ADT-1 within 15 days of the meeting in which the auditor is appointed.

Casual Vacancy Appointment { Section 139(8)}

Who and When ??: In the case of a company whose accounts are subject to audit by an auditor appointed by the Comptroller and Auditor-General of India, be filled by the Comptroller and Auditor-General of India within 30 days of such casual vacancy.

What if C&AG Fails to fill casual vacancy??: In case the Comptroller and Auditor-General of India does not fill the vacancy within the said period, the Board of Directors shall fill the vacancy within next 30 days.

What if CAG Fails to appoint First Auditor?? If casual vacancy not filled by the C&AG within 30 days, the Board of Directors of the company shall appoint such auditor within the next 30 days. (30+30=60).

Consent from the Auditor: Written consent of the auditor to such appointment, and a certificate shall be obtained from the auditor.

ROC Form: Company shall inform the ROC by filling Form ADT-1 within 15 days of the meeting in which the auditor is appointed.

Point to be Noted
  1. Explanation.—For the purposes of this Chapter, “appointment” includes reappointment.
  2. Where a company is required to constitute an Audit Committee under section 177, all appointments, including the filling of a casual vacancy of an auditor under this section shall be made after taking into account the recommendations of such committee.
  3. Where at any annual general meeting, no auditor is appointed or re-appointed, the existing auditor shall continue to be the auditor of the company.
  4. Subject to the provisions of section 139(1) and the rules made thereunder, a retiring auditor may be re-appointed at an annual general meeting, if—

(a) he is not disqualified for re-appointment;
(b) he has not given the company a notice in writing of his unwillingness to be re-appointed; and
(c) a special resolution has not been passed at that meeting appointing some other auditor or providing expressly that he shall not be re-appointed.

Related Article: Appointment of Statutory Auditor in case of Companies other than Government Companies


Like it? Share with your friends!

0

0 Comments

Your email address will not be published. Required fields are marked *