Online Chartered can help you form a producers company in most convenient way.
An auditor appointed in a company is an independent external professional who is authorized to review and verify the company’s financial position and who is require to certify the company’s financial statements. An auditor is someone who is responsible for evaluating the validity and reliability of a company or organization’s financial statements. The auditors perform the most crucial task of the company. Thus, selection and appointment of auditor is an important task for board of directors.
The appointment and removal of an auditor involve various stakeholders, including the board of directors, shareholders, and regulatory authorities. The process depends on whether it is the first-time appointment or a subsequent change.
The first auditor must be appointed within one month of company registration.
If the board fails to appoint the first auditor, shareholders can appoint one at a general meeting.
At each annual general meeting (AGM), shareholders appoint an auditor who serves until the next AGM. The appointment must be communicated to the auditor within seven days, and they must confirm acceptance with the Registrar of Companies (ROC) within 30 days by filing Form ADT-1.
An auditor who resigns must file Form ADT-3 within 30 days, stating the reasons for resignation.
To be eligible for appointment as a company auditor, a person or firm must:
Certain individuals and entities are disqualified from being appointed as auditors under Section 141(3) of the Companies Act, 2013:
If an auditor incurs any of these disqualifications after being appointed, they must vacate the position, creating a casual vacancy.
Auditors must remain vigilant for any fraudulent activities within the company. If they suspect fraud, they must report it to the Central Government as per the guidelines outlined in the Companies Act. Timely fraud detection helps maintain corporate transparency and legal compliance.
Auditors examine the company’s financial statements and ensure compliance with the Companies Act, 2013, and applicable accounting standards.
If a company has multiple branches, a branch auditor prepares a separate report, which is later incorporated into the company’s main audit report.
If discrepancies or fraudulent activities are found, auditors must report them immediately.
Auditors must follow the Code of Ethics and Professional Conduct, ensuring confidentiality and professional scepticism.
