Any person certified as a Chartered Accountant (CA) under the Chartered Accountant Act, 1949, who has received training in reviewing and verifying accounting data, is considered to be an auditor. According to the 2013 Companies Act’s rules, every firm must appoint an auditor.
The goal of Auditor’s Appointment
The company’s auditors are there to safeguard the interests of the shareholders. The auditor is required by law to review the directors’ accounts and notify them of the company’s actual financial situation. In order to safeguard and maintain the firm in sound financial shape, the auditor provides his impartial assessment to the owners or shareholders of the company.
Appointment of an auditor for various types of businesses
This is to further explain that Section 139(6) of the Companies Act, 2013 which lays down that the first Auditor of a company, other than a Government company, shall be appointed by the Board of Directors within 30 days from the date of registration of the company and in the case of failure of the Board to appoint such Auditor, it shall inform the members of the company, who shall within 90 days at an extraordinary general meeting appoint such auditor and such Auditor shall hold office till the conclusion of the first annual general meeting.
A Special Notice Appoints An Auditor Other Than A Retiring Auditor
A special notice under Section 115 of the 2013 Companies Act must be given proposing that such a resolution would be moved at the following annual general meeting when it is proposed that someone other than the retiring auditor shall be appointed as an auditor or when it is proposed that the retiring auditor shall not be re-appointed.
Such a particular notice can be avoided if the retiring auditor has served for a continuous period of five or 10 years, as appropriate. Based on an application from the firm or another aggrieved party, if the Tribunal determines that the auditor is abusing his or her rights, then the copy of the representation need not be delivered, and it is not required to be read aloud during the meeting.