Question:
A Listed/ Public Limited company has appointed an Audit Firm as its Statutory Auditors which will complete 5 years at the ensuing AGM for FY 2015-16 who are eligible for re-appointment for next 5 years.
Is it mandatory to appoint them for 5 years at the upcoming AGM of the Company or can they be appointed for less than 5 years as per Companies Act 2013?
Answer: The relevant Provisions are Sec 139 of Companies Act 2013 wherein, it says that maximum duration of a term of an Auditor is 5 years. It is important to note that the section specifically focus on the maximum limit and not minimum.
Further, section 139 also lays down the restriction on maximum number of terms an Auditor can stay which is 2 (Two). Here, Auditor means CA Firm and not individual CA.
Section 139(2):
No listed company or a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint-
a. An Individual as auditor for more than one term of five consecutive years; and
b. an Audit firm as auditor for more than two terms of five consecutive years
For more details, contact CS Neha Seth at csnehaseth@gmail.com or call us at 9871903449
A Listed/ Public Limited company has appointed an Audit Firm as its Statutory Auditors which will complete 5 years at the ensuing AGM for FY 2015-16 who are eligible for re-appointment for next 5 years.
Is it mandatory to appoint them for 5 years at the upcoming AGM of the Company or can they be appointed for less than 5 years as per Companies Act 2013?
Answer: The relevant Provisions are Sec 139 of Companies Act 2013 wherein, it says that maximum duration of a term of an Auditor is 5 years. It is important to note that the section specifically focus on the maximum limit and not minimum.
Further, section 139 also lays down the restriction on maximum number of terms an Auditor can stay which is 2 (Two). Here, Auditor means CA Firm and not individual CA.
Section 139(2):
No listed company or a company belonging to such class or classes of companies as may be prescribed, shall appoint or re-appoint-
a. An Individual as auditor for more than one term of five consecutive years; and
b. an Audit firm as auditor for more than two terms of five consecutive years
For more details, contact CS Neha Seth at csnehaseth@gmail.com or call us at 9871903449
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