Companies Act, 2013: Provisions regarding Company
Description: Companies Act, 2013: Provisions regarding Company Auditor- Appointment of Auditor (Sec. 139) Removal of the Auditor (Sec. 140) Qualification and disqualification of Auditor (Sec. 141) Remuneration of Auditor (Sec. 142) Power and Duties of
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slide1. Companies Act, 2013: Provisions regarding Company Auditor- Appointment of Auditor (Sec. 139)
Removal of the Auditor (Sec. 140)
Qualification and disqualification of Auditor (Sec. 141)
Remuneration of Auditor (Sec. 142)
Power and Duties of Auditor (Sec. 143)<br>
slide2. Qualification and disqualification of Auditor [Sec. 141 (3): Companies Act, 2013]- Qualification-
Individual: A person is qualified for the appointment as an auditor of the company only if he is a Chartered Accountant within the meaning of the Chartered Accountants Act 1949.
Firm including LLP(Partnership firm of CA in practice): A firm shall be eligible for appointment as an auditor of the company only if majority of its partners practicing in India are qualified for appointment (i.e. CA)<br>
slide3. Disqualification of Auditor [Sec. 141 (3): Companies Act, 2013]- A Body Corporate excluding LLP.
An officer or employee of the company
A partner or employee of an officer or employee of the company
A person who or his relative or his partner is holding any security in the company or subsidiary company or holding company or associate company or subsidiary of such holding company.
A person who or his relative or partner is indebted to the company or subsidiary company or holding company or associate company or subsidiary of such holding company exceeding Rs. 5,00,000/- or who has given any guarantee in connection with indebtedness of any third person of the company…. for an amount exceeding Rs. 1,00,000/-.<br>
slide4. A person or a firm who directly or indirectly has business relationship of such company or subsidiary company or holding company or associate company or subsidiary of such holding company.
A person whose relative is a director or key managerial personnel.
A person who is an auditor in more than 20 companies.
A person who is engaged in consulting and specialised services.
Convicted person.<br>
slide5. Appointment of Company Auditor (section 139):- Appointment of First Auditor section 139(6)-
In case of newly formed company, first auditor shall appointed by the Board Of Directors (BOD) within 1 month/ 30 days of the date of registration of the company.
The first auditor so appointed shall hold office until the conclusion of the first Annual General Meeting (AGM).
In case of BOD could not appoint in this regard, the board shall inform members of the company who shall appoint first auditor within 90 days at an extra ordinary general meeting (EGM).
Appointment of First Auditor in case of Government Company (section 139(7)-
In case of Government Co. first auditor shall be appointed by Comptroller and Auditor General of India (C&AG) within 60 days of registration.
In case CAG does not appoint the first auditor within the said period, Board (BOD) shall appoint the first auditor within next 30 days.
In case failure of the Board to appoint the first auditor, Board shall inform the members of the company who shall appoint within next 60 days at an extraordinary general meeting (EGM).
The first auditor shall hold office till the conclusion of the first AGM.<br>
slide6. Appointment of subsequent Auditor 139 (5)-
In case of Government company, subsequent auditor shall appoint by C&AG within 180 days from the commencement of the financial year.
In case of non-government company, subsequent auditor shall appoint by the members of the company in AGM by passing an ordinary resolution (OR).
Appointment of Auditor in case of Casual Vacancy 139(8)-
Casual vacancy means vacancy in office of auditor due to accidental circumstances such as death, incapacity or disqualification of the auditor.
Where a vacancy is caused by the resignation of an auditor, shall be filled by BOD within 30 days & appointment made shall be approved in a general meeting within 3 months of the recommendation of the Board.
Where vacancy arises in a company whose accounts are subject to audit by an auditor appointed by C&AG, shall be filled within 30 days by CAG. (in case of government company)<br>
slide7. Removal and Resignation of the Auditor [Sec. 140: Companies Act, 2013]- Removal before expiry of term sec.140 (1)-
Passing of Board Resolution (BR)
Approval of CG must be obtained within 30 days of passing BR in the application ADT 2.
Pass special resolution (SR) at GM which is to be held within 60 days of CG approval.
Before taking any action for removal, the auditor shall given a reasonable opportunity of being heard.
Resignation by Auditor sec. 140 (2) & (3)-
Resigning auditor should file a statement in 30 days (ADT 3) with company and ROC.
State reasons and other facts in the statement.
In case of government company statement to C&AG also along with Co. and ROC.
Penalty if auditor fails to do so: Fine Rs. 50000/- or remuneration whichever is less to 5 lacs.<br>
slide8. Remuneration of Auditor (Sec. 142) Appointment by BOD-
Remuneration is also fixed by BOD
Appointment by Shareholders-
In this case remuneration is determined by the shareholders at AGM.
Appointment by Comptroller & Auditor General of India (CAG)-
Remuneration shall be fixed by the company in GM
Remuneration other than audit fees-
Reimbursement of expenses incurred by auditor in relation to audit,
Any facilities extended to the auditor,
Shall not include any other services rendered by the auditor.<br>
slide9. Power and Duties of Auditor (Sec. 143) Rights & Powers of an Auditor- Sec. 143 (1):
Right of access to Books of account & vouchers
Right to obtain information and explanation
Right to visit branch offices & access to branch account
Right to receive notice and attend general meeting
Right to make representation
Right to report to members
Right to sign audit report
Right to seeking opinion of an expert
Right to receive remuneration<br>
slide10. Duties and responsibilities of an Auditor- (Sec. 143(2)) Report to the members
Examination of accounts
Reporting on true and fair view
Duty as to enquiry
Report as to additional matters
Duty to sign report
Duty as to statutory report
Duty as to prospectus
Duty to assist investigation<br>
Removal of the Auditor (Sec. 140)
Qualification and disqualification of Auditor (Sec. 141)
Remuneration of Auditor (Sec. 142)
Power and Duties of Auditor (Sec. 143)<br>
slide2. Qualification and disqualification of Auditor [Sec. 141 (3): Companies Act, 2013]- Qualification-
Individual: A person is qualified for the appointment as an auditor of the company only if he is a Chartered Accountant within the meaning of the Chartered Accountants Act 1949.
Firm including LLP(Partnership firm of CA in practice): A firm shall be eligible for appointment as an auditor of the company only if majority of its partners practicing in India are qualified for appointment (i.e. CA)<br>
slide3. Disqualification of Auditor [Sec. 141 (3): Companies Act, 2013]- A Body Corporate excluding LLP.
An officer or employee of the company
A partner or employee of an officer or employee of the company
A person who or his relative or his partner is holding any security in the company or subsidiary company or holding company or associate company or subsidiary of such holding company.
A person who or his relative or partner is indebted to the company or subsidiary company or holding company or associate company or subsidiary of such holding company exceeding Rs. 5,00,000/- or who has given any guarantee in connection with indebtedness of any third person of the company…. for an amount exceeding Rs. 1,00,000/-.<br>
slide4. A person or a firm who directly or indirectly has business relationship of such company or subsidiary company or holding company or associate company or subsidiary of such holding company.
A person whose relative is a director or key managerial personnel.
A person who is an auditor in more than 20 companies.
A person who is engaged in consulting and specialised services.
Convicted person.<br>
slide5. Appointment of Company Auditor (section 139):- Appointment of First Auditor section 139(6)-
In case of newly formed company, first auditor shall appointed by the Board Of Directors (BOD) within 1 month/ 30 days of the date of registration of the company.
The first auditor so appointed shall hold office until the conclusion of the first Annual General Meeting (AGM).
In case of BOD could not appoint in this regard, the board shall inform members of the company who shall appoint first auditor within 90 days at an extra ordinary general meeting (EGM).
Appointment of First Auditor in case of Government Company (section 139(7)-
In case of Government Co. first auditor shall be appointed by Comptroller and Auditor General of India (C&AG) within 60 days of registration.
In case CAG does not appoint the first auditor within the said period, Board (BOD) shall appoint the first auditor within next 30 days.
In case failure of the Board to appoint the first auditor, Board shall inform the members of the company who shall appoint within next 60 days at an extraordinary general meeting (EGM).
The first auditor shall hold office till the conclusion of the first AGM.<br>
slide6. Appointment of subsequent Auditor 139 (5)-
In case of Government company, subsequent auditor shall appoint by C&AG within 180 days from the commencement of the financial year.
In case of non-government company, subsequent auditor shall appoint by the members of the company in AGM by passing an ordinary resolution (OR).
Appointment of Auditor in case of Casual Vacancy 139(8)-
Casual vacancy means vacancy in office of auditor due to accidental circumstances such as death, incapacity or disqualification of the auditor.
Where a vacancy is caused by the resignation of an auditor, shall be filled by BOD within 30 days & appointment made shall be approved in a general meeting within 3 months of the recommendation of the Board.
Where vacancy arises in a company whose accounts are subject to audit by an auditor appointed by C&AG, shall be filled within 30 days by CAG. (in case of government company)<br>
slide7. Removal and Resignation of the Auditor [Sec. 140: Companies Act, 2013]- Removal before expiry of term sec.140 (1)-
Passing of Board Resolution (BR)
Approval of CG must be obtained within 30 days of passing BR in the application ADT 2.
Pass special resolution (SR) at GM which is to be held within 60 days of CG approval.
Before taking any action for removal, the auditor shall given a reasonable opportunity of being heard.
Resignation by Auditor sec. 140 (2) & (3)-
Resigning auditor should file a statement in 30 days (ADT 3) with company and ROC.
State reasons and other facts in the statement.
In case of government company statement to C&AG also along with Co. and ROC.
Penalty if auditor fails to do so: Fine Rs. 50000/- or remuneration whichever is less to 5 lacs.<br>
slide8. Remuneration of Auditor (Sec. 142) Appointment by BOD-
Remuneration is also fixed by BOD
Appointment by Shareholders-
In this case remuneration is determined by the shareholders at AGM.
Appointment by Comptroller & Auditor General of India (CAG)-
Remuneration shall be fixed by the company in GM
Remuneration other than audit fees-
Reimbursement of expenses incurred by auditor in relation to audit,
Any facilities extended to the auditor,
Shall not include any other services rendered by the auditor.<br>
slide9. Power and Duties of Auditor (Sec. 143) Rights & Powers of an Auditor- Sec. 143 (1):
Right of access to Books of account & vouchers
Right to obtain information and explanation
Right to visit branch offices & access to branch account
Right to receive notice and attend general meeting
Right to make representation
Right to report to members
Right to sign audit report
Right to seeking opinion of an expert
Right to receive remuneration<br>
slide10. Duties and responsibilities of an Auditor- (Sec. 143(2)) Report to the members
Examination of accounts
Reporting on true and fair view
Duty as to enquiry
Report as to additional matters
Duty to sign report
Duty as to statutory report
Duty as to prospectus
Duty to assist investigation<br>