In adherence to the Companies Act 2013, the appointment of an auditor is a pivotal step for every company. This article delves into the significance of a consent letter, its requirements, and the precise format for complying with the legal provisions.
Every company must conduct an annual audit to get its books of account verified. For the appointment of an auditor, a consent letter from the proposed auditor (or a firm) has to be obtained in the first place.
According to the proviso to Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, before an appointment or reappointment is made at the AGM, the written consent of the concerned auditor and a certificate from him has to be obtained ensuring that the said appointment or reappointment, if made, shall be in accordance with the rules & conditions prescribed under law.
Once the appointment is made, a company is under an obligation to intimate the ROC and should file a notice of appointment of auditor in Form ADT-1 within 15 days of such an appointment.
Key points: Consent letter for Appointment of Auditor as per the Companies Act 2013
- The consent letter from the auditor has to fulfill certain requirements as per the company law provisions.
- The eligibility & qualifications of the auditor (audit firm) as per the Companies Act, 2013 and the Chartered Accountants Act, 1949 must be proved for the appointment.
- The letter has to mention that the auditor is not debarred or restricted by any regulatory authority like ICAI, SEBI, RBI, etc.
- It has to mention that the auditor (audit firm) is an independent firm not connected to the company or its directors.
- Relevant details of the proposed auditor/audit firm should be mentioned.
Format of Consent Letter for Appointment of Auditor under Companies Act 2013
This letter is to be submitted by the Auditors as written approval to serve as Statutory Auditors of the Company and to affirm that their appointment, if made, will be in compliance with the stipulated requirements of the Companies Act, 2013.
Specimen Eligibility cum Consent Letter by Chartered Accountant proposed to be appointed as Statutory Auditor by the Company
Date:
The Board of Directors
_____________ Limited,
Address: _______
Subject: Consent for Financial audit of your Company for the year ending ________.
Dear Sir,
This is with reference to your proposal to appoint/reappoint us as the statutory auditors of the Company for the financial year ending on _____________. Pursuant to Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, we are pleased to give our consent and to accept the appointment as the statutory auditors of the Company if so, made by the Members of the Company or Board of Directors (*as the case may be), on the recommendation of the Audit Committee (*if applicable).
We would like to inform you that we do not suffer from any disqualifications as specified inter-alia under Section 141 of the Companies Act 2013 and are eligible for appointment under the Chartered Accountants Act 1949 and the rules or regulations made thereunder.
We further confirm that the appointment, if made, shall be within the limits prescribed under Section _____ of the Companies Act. Also, the proposed appointment is as per the term provided under the Act.
We would also like to inform you that the partners of our firm are holding a Certificate of Practice issued by the Institute of Chartered Accountants of India and are engaged in whole-time practice. The registration number of the firm is ___________ and the COP number of the partners is as follows:
Name of the partner ______ (COP/Membership No. _____)
Name of the partner ______ (COP/Membership No. _____)
Name of the partner ______ (COP/Membership No. _____)
Name of the partner ______ (COP/Membership No. _____)
We further certify that we are an independent firm of Chartered Accountants and are in an arm’s length relationship with the Company.
In addition, we would also like to bring to your notice that no orders or proceedings are pending against our firm or any of our partners relating to professional matters of conduct before the Institute of Chartered Accountants of India or any competent authority or any Court.
Other details of our firm are as under:
- Name of the Firm:
- Constitution of the firm:
- Address of office of the Firm:
- PAN of the Firm:
- GST of the Firm:
- Membership number of the partners:
- Email ID of the firm:
We look forward to having a sound and successful professional relationship with your Company.
Thanking you,
Yours faithfully,
Name of the firm (_____ & Associates)
(Firm Registration Number)
Name of the Partner(s)
Membership No. ________
Note: The format given above is only for reference purposes and it should be used only after adhering to the provisions of the relevant Acts and rules (if any) that may be applicable for the time being in force. It is only provided for reference and should not be treated as formal professional advice of any sort.
****
Conclusion: The consent letter for auditor appointment is a critical aspect of adhering to the Companies Act 2013. By following the prescribed format and ensuring compliance with regulatory provisions, companies can ensure a transparent and legally sound appointment process. This step contributes to the overall integrity of financial audits and strengthens corporate governance in accordance with the law.
Author Bio
