Appointment of first auditor of company: The compliance of the company’s financial records and accounting procedures with the right laws is an inevitable prerequisite. An auditor keeps a hawk-eye on the changes that are revised from time to time in the provisions mentioned in the 2013 Act with the purpose to ensure that the company is complying with the set of laws. Not only this, the auditing of the books of the company and representation and explanation of the affairs of the Company to the shareholders are also two of the major areas that are covered and managed by the Auditor of a company. Appointment of the first auditor of the company. It’s significant to know that the provisions associated with the auditors in the 2013 Act have come up with substantial amendments as compared to those stated in the 1956 Act. Consequently, there are some provisions associated with the auditors for which the descriptions have been amended or revised in the companies Act, 2013.
Companies Act makes it mandatory for the companies to appoint a Statutory Auditor to do the audit of the books of account of the company. The primary responsibility of appointing the Auditor is on the Board Of Directors. We shall support you to appoint an auditor for your company. The board of directors of the company is obligated to find a suitable Chartered Accountant who is in full-time practise as a CA and is eligible to take a fresh assignment of statutory audit for the company. Please note that a CA is not eligible for an audit of your company if he is also providing his services for the purpose of accounting, consulting or GST Return filing. In other words to become an auditor of your company the CA must be an independent person and not involved in day to day accounting, tax or any other manner.
When it comes to the appointment of the first auditor in a company, provided that it’s not a government company or company owned/ controlled by CG/SG/CG and SG [139(6)]; Board of Directors appoint the First auditor of the company within thirty days of the date of incorporation for the period until the conclusion of the first annual general meeting of the company. Moreover, In case the board fails to appoint the first auditor of the company, the members of the company shall be informed, who shall further appoint the auditor within 90 days in an extraordinary general meeting.
We maintain a pool of experienced and independent chartered accountants who are eligible to conduct the statutory audit of the company as required under section 139 of the Companies Act. You may avail of our consulting service to find a suitable auditor in compliance with section 139 to 148 of the Act. We shall be working closely with the Board of Directors of the company to appoint the first auditor of the company.
Who Can be Appointed as Auditor: Section 139 of the Companies Act, prescribes qualification and condition for appointment of an auditor, according to it the auditor must be an independent person and must be qualified Chartered Accountant with valid membership of ICAI.
The Auditor Must be an Independent Person: Audit of the company is a statutory requirement and it must be done by an Independent CA who is in full-time practice and is not engaged in any other service directly or indirectly for the company or its holding company. Section 144 clearly lays down certain restrictions on the auditors to ensure independence and integrity on the part of the auditor while discharging their responsibility as an auditor of the company. The law prescribes that an auditor must not engage in providing below services to the company or its holding company, whether directly or indirectly:
In other words, a statutory auditor must not do anything for the company other than the audit of the finalized final accounts of the company. The company is under the responsibility to prepare the books of account and draft the balance sheet, profit, and loss account, and other financial reports and give them to the auditor for expression of his opinion and Audit Report.
“RESOLVED THAT pursuant to the provisions of Section 139(6) and other applicable provisions of the Companies Act, 2013 and the Rules framed thereunder, as amended from time to time, M/S ________ [Insert Name of Audit Firm], Chartered Accountant(s), be and is hereby appointed as the first auditor(s) of the company to hold office from the conclusion of this meeting till the conclusion of the first AGM of the company to be held in the year ____, at such remuneration as may be agreed upon between the board of directors and the statutory auditor(s), in addition to the reimbursement of actual out of pocket expenses incurred in relation with the audit of accounts of the Company