Recommended Free Tools
A statutory auditor independently examines a company’s financial statements and reports under India’s Companies Act, 2013. The appointment route depends on whether the auditor is being appointed for the first time, at an annual general meeting (AGM), to fill a vacancy, or for a company covered by the Government-company provisions. The deadlines below are statutory periods; confirm the current Act, rules and filing requirements before acting for a particular company.
What a statutory auditor does
A statutory auditor is an external professional appointed under company law to examine a company’s financial statements and report as required by the Companies Act, 2013. Section 143 sets out the auditor’s powers and duties, including the statutory audit and reporting framework. The auditor’s role is independent examination—not managing the company or preparing management’s financial statements.
An audit is not a guarantee that every instance of fraud will be detected or that the company will remain financially successful. The auditor reports within the applicable statutory and auditing-standards framework; the cited provisions do not amount to a promise of certainty about the company’s affairs. Section 143 of the Companies Act, 2013
Branch audits
Under section 143(8), a company’s auditor may audit a branch, or the company may use another qualified auditor. An overseas branch may also be audited by a person qualified under the law of the place where the branch is situated. Section 143(8) on branch audit
#1 Best Overall
Who is eligible to be appointed
An individual appointed as auditor must be a chartered accountant. A firm may be appointed in its firm name if a majority of its partners practising in India are qualified; only partners who are chartered accountants may act and sign on the firm’s behalf. Section 141 also disqualifies certain people because of specified employment, relationships, interests or other conflicts. Section 141 of the Companies Act, 2013
Before appointment, the company must obtain the auditor’s written consent and a certificate confirming eligibility under section 141. Section 139 of the Companies Act, 2013
Rank #2
- "A stirring history of the tribal sovereignty movement." ―Publishers Weekly
How the first auditor is appointed
For a company other than a Government company, the Board of Directors must appoint the first auditor within 30 days of the company’s registration. If the Board does not do so, it must inform the members, who then appoint the auditor at an extraordinary general meeting (EGM) within 90 days. The first auditor holds office until the conclusion of the company’s first AGM. Section 139 of the Companies Act, 2013
How the AGM appointment works
Members appoint the auditor at the first AGM. The ordinary appointment runs from the conclusion of that meeting until the conclusion of the sixth AGM, with subsequent appointments following the statutory cycle and applicable rules.
- Consider the proposed auditor. If the company is required to have an Audit Committee, that committee recommends a proposed auditor to the Board. If no Audit Committee is required, the Board considers and recommends a proposed auditor to the members. The selection should take account of the company’s size and needs, the candidate’s qualifications and experience, and relevant professional-conduct matters. Section 144 of the Companies Act, 2013
- Obtain consent and eligibility confirmation. Before appointment, obtain the proposed auditor’s written consent and section 141 eligibility certificate. Section 139 of the Companies Act, 2013
- Secure the members’ appointment. Members appoint the auditor at the AGM.
- Notify the auditor and file the appointment notice. The company must inform the auditor and file notice of appointment with the Registrar within 15 days of the meeting. Check the current MCA form and portal workflow before filing; the deadline is statutory, but this general explanation does not establish the current filing interface. Section 139 of the Companies Act, 2013
How Government-company appointments differ
The CAG-led process applies only to companies covered by the Government-company provisions of the Act. Do not assume a company qualifies based on its name or a general impression of government involvement; check its ownership or control against the current statutory wording.
| Appointment event | Company covered by Government-company provisions |
|---|---|
| First auditor | The Comptroller and Auditor-General of India (CAG) appoints the first auditor within 60 days of registration. If the CAG does not appoint, the Board has the next 30 days. If the Board also fails, members appoint at an EGM within the statutory period. Section 139 of the Companies Act, 2013 |
| Auditor for a financial year | The CAG appointment provision sets a period of 180 days from the commencement of the financial year. Section 139 of the Companies Act, 2013 |
| Casual vacancy | The CAG has 30 days to fill the vacancy. If it does not, the Board has the following 30 days. Section 139 of the Companies Act, 2013 |
What happens when an auditor leaves or a casual vacancy arises
For a company whose auditor is not appointed by the CAG, the Board generally fills a casual vacancy within 30 days. A vacancy caused by resignation has an additional member-approval step: the Board’s appointment must be approved by the company at a general meeting convened within three months of the Board’s recommendation. Section 139 of the Companies Act, 2013
For a company whose accounts are subject to audit by a CAG-appointed auditor, the CAG has 30 days to fill a casual vacancy. If it does not, the Board has the next 30 days. Section 139 of the Companies Act, 2013
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When auditor rotation applies
Rotation is not a rule for every company. It applies to specified classes of companies, subject to the scope, rules, exclusions and restrictions in the Act. Where section 139(2) applies, an individual auditor may serve one consecutive five-year term; an audit firm may serve up to two consecutive five-year terms. Restrictions also apply to association with the outgoing auditor. Establish whether the company falls within the covered classes before relying on these limits. Section 139(2) and auditor rotation
Free tools Windows power users keep installed
One-click scans. No signup required.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
