Change of Auditor

Change of Auditor

Seamless Auditor Management under Companies Act, 2013

Manage the appointment, removal, or rotation of your company auditor efficiently with Tax Pal Solutions. Our experts ensure compliance with the Companies Act, 2013, guiding you through every step—whether during AGM, resignation, or mandatory rotation.

Key Highlights

• Support for Form ADT Filings
• Drafting of Resolutions & Board Meeting Minutes
• Auditor Change Compliance Assistance
• Guidance on AGM Resolutions & ROC Notifications
• Trusted by Thousands of Indian CompaniesWhat is a Company Auditor?

A company auditor is a Chartered Accountant responsible for reviewing and certifying your company’s financial statements. They ensure:

• Accuracy of accounts
• Compliance with legal standards
• Transparency and trust for stakeholders

Auditors hold office for five years, but a change may occur due to rotation, resignation, business restructuring, or policy updates.

Role of a Statutory Auditor

Top Reasons for Auditor Change

• Completion of term (Section 139(2))
• Resignation, death, or disqualification (Section 140)
• Audit quality concerns or delays
• Business restructuring or office relocation
• Need for industry-specific expertise
• Internal policy-driven rotation

Note: Form ADT-3 must be filed by resigning auditors, and Form ADT-1 by companies for new appointments.

Legal Provisions under Companies Act, 2013

Mandatory Rotation: Certain companies must follow a cooling-off period to maintain auditor independence.

Procedure to Change an Auditor

Scenario 1: Removal Before Term Ends

1. Board Meeting: Approve calling an EGM and request Central Government approval.
2. Application to Central Government: Submit Form ADT-2 with justification.
3. Government Approval: Proceed after approval.
4. Special Resolution at EGM: Obtain shareholder approval (≥3x votes in favor than against).
5. ROC Filing: File Form MGT-14 within 30 days.
6. New Auditor Appointment: Fill casual vacancy.

Scenario 2: Auditor Resignation

1. Auditor submits resignation and files Form ADT-3.
2. Board acknowledges resignation and appoints a new auditor within 30 days.
3. Shareholder ratification at a general meeting (if applicable).
4. File Form ADT-1 within 15 days of appointment.

Scenario 3: Term End / Rotation

1. Board recommends non-reappointment or new auditor.
2. AGM passes Ordinary Resolution.
3. Obtain NOC from outgoing auditor (recommended).
4. File Form ADT-1 within 15 days.

Documents Required

Sample Resolutions

Board Resolution for EGM (Removal):

Approve making application to Central Government for removal and convening EGM for shareholder approval.

Special Resolution for AGM:

Remove existing auditor with CG approval and appoint new auditor until next AGM.

Ordinary Resolution for Rotation:

Non-reappointment of existing auditor and appointment of new auditor for next term as per Section 139.

Costs for Auditor Change

ROC Filing Fees (Form ADT-1)

Professional Fees: ₹2,000 – ₹10,000 depending on company type, number of resolutions, urgency, and complexity.

Services include drafting resolutions, letters, ROC filings, and ensuring compliance.

Auditor Change by Company Type