Appointment of auditor to fill casual vacancy

Appointment of auditor to fill casual vacancy

Provisions applicable: Section 139(8), Section 140 (2) and Rule 8 of Companies (Audit and Auditor) Rules, 2014.

This article covers scope of appointment of auditor in case of casual vacancy except in the case of Comptroller and Auditor General of India and sample formats thereto.

Instances of casual vacancy:

Procedure for filling up Casual Vacancy on resignation/ Ordinary resolution could not be passed at General Meeting/ Disqualification of Auditor

Checklist:

1. The Company shall obtain a certificate in writing from the proposed auditor confirming his eligibility to be appointed and consent for the appointment.

2. Company to hold meeting of Board of Directors or via Circular Resolution may take note of resignation/casual vacancy, recommend appointment of new auditor and call for Extraordinary General Meeting for passing of ordinary resolution. (EGM shall be conducted within 3 months from the date of recommendation of the Board).

3. Auditor appointed on casual vacancy shall be appointed for a tenure of one financial year in case of Extraordinary General Meeting and for a period of 5 years in case of Annual General Meeting. (Provided the financial year for which the appointment is made is covered under the tenure of 5 years)

4. Otherwise, such auditor can be re-appointed for a period of 5 years under section 139(1) of Companies Act, 2013.

5. Company is required to file Form ADT-1 within 15 days from the date of appointment in a general meeting.

ADT-1 Attachment for casual vacancy:

a. Consent Letter and Eligibility Certificate from Auditor.

b. Letter to Auditor from company

c. Resolution passed for appointment of Auditor

SAMPLE FORMAT OF DOCUMENTS:

Format of RESIGNATION LETTER FROM AUDITOR

Date:
To
The Board of Directors,
(COMPANY NAME)
REGISTERED OFFICE ADDRESS OF COMPANY

SUB: Resignation as Statutory Auditor of the company

Dear Sir,

This is to inform you that due to preoccupation, we will not be able to conduct audit of your company from the financial year ——-. Accordingly, we are submitting our resignation as Statutory Auditors of the company, with immediate effect.

We therefore, request you to treat this letter as our resignation from the position of Statutory Auditors of the company.

Thanking You,

Yours Faithfully,

For ____________, Chartered Accountants,

____________,

(Partner)

M. No____________,

FRN: ____________,

****

Format Of Board Resolution To Take Note Of Resignation From The Auditor

“ RESOLVED THAT pursuant to the provisions of Section 140 of The Companies Act, 2013 read with Rule 8 of The Companies (Audit & Auditors) Rules, 2014 and other applicable provisions of The Companies Act, 2013 including any statutory modification(s) thereof for the time being in force, the resignation of existing Statutory Auditor/casual vacancy  M/s. ____________, FRN____________, vide letter dated ____________, be and is hereby accepted and taken on record with effect from____________.”

Format Of Board Resolution To Appoint Of Statutory Auditor Of The Company

“RESOLVED THAT pursuant to sub-section (8) of section 139 of the Companies Act, 2013 and other applicable provisions, if any, of the Companies Act, 2013 as amended from time to time or any other law for the time being in force (including any statutory modification or amendment thereto or re-enactment thereof for the time being in force), and subject to approval of members at the Extraordinary General Meeting to be held on ____________, ____________, Chartered Accountants, (Firm Registration No. ____________, be and are hereby appointed as statutory auditors of the company for the financial year 2020-2021 to fill up the casual vacancy caused due to resignation of ____________, Chartered Accountants, FRN____________, and they shall hold office until the conclusion of the ensuing annual general meeting at the remuneration as determined by the board.”

RESOLVED FURTHER THAT any of the Directors of the Company be and are hereby severally authorized to sign, execute all such documents and do all such acts, deeds and things which may be necessary to bring into effect the above resolution.”

Format Of EGM Resolution for Appointment of Statutory Auditors to fill casual vacancy-On Resignation:

“RESOLVED THAT pursuant to the provisions of Section 139(8) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 (The Rules), including any statutory modification(s) thereof for the time being in force and pursuant to recommendation made by the Board of Directors at its meeting held on ____________, ____________, Chartered Accountants, (Firm Registration No. ____________, be and is hereby appointed as statutory auditor of the company for the financial year ____________, to fill casual vacancy caused by resignation of ____________, Chartered Accountants, FRN____________,

“RESOLVED FURTHER THAT ____________, Chartered Accountants, (Firm Registration No. ____________, be and is hereby appointed as statutory auditor of the company for the financial year ____________, from the conclusion of  this Extraordinary General Meeting till the next Annual General Meeting of the company and that she shall be eligible for re-appointment in the next Annual General Meeting of the company to be held in the year ____________, and that they shall conduct the statutory audit for the period ended 31st March, ____________, on such remuneration as may be fixed by the Board of Directors in consultation with them.”

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Letter Of Appointment To Auditor

Date:

To
New Auditor Name,
Chartered Accountant,
Address of the new Auditor

Sub: Appointment letter to the Statutory Auditors

Dear Madam,

We are glad to inform you that your firm M/S. ____________, is appointed as the statutory auditor of the company by the members at the Extraordinary General Meeting of the company held on ____________, in the terms of provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013 and the rules framed thereunder, as amended from time to time.

For (Company Name)

Director Name

Designation:

DIN:

*****

Format Of Consent And Eligibility Certificate From Auditor

ELIGIBILTY CERTIFICATE & CONSENT FROM AUDITOR Certificate

[Pursuant to the provisions of Section 139 of the Chapter X of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014]

Date:

To
The Board of Directors,
Company Name
Address

Dear Sirs,

Sub: Letter for appointment and consent as statutory auditor under the Companies Act, 2013

In connection with the appointment our appointment and consent as auditors of M/s. ____________, (“The company”) & in accordance with the provisions of the Companies Act, 2013 (the Act) and rules and regulations made there under, we are pleased to confirm that:

1. The firm is eligible for appointment and is not disqualified for appointment under section 141 of The Companies Act, 2013, the Chartered Accountant Act, 1949 and rules and regulations made there under;

2. The proposed appointment would be as per the terms provided under the Act;

3. The proposed appointment is within the limits laid down by or under the authority of the Act;

4. There are no proceedings pending against either of the partners or the firm with respect to professional matters of conduct;

5. We satisfy other criteria as provided under Section 141 of the Act.

Thanking You.

Yours Faithfully,

For New Auditor Name/Firm Name,
FRN____________,
Name of the Member of Firm,
M.No- ____________,