Audit Under Companies Act 2013

Proper and accurate preparation of financial statements by the companies and its disclosure, in a manner that is standardized and understood by stakeholders and its audit under Companies Act 2013 is central to the credibility of the corporates and soundness of investment decisions by the investors. The financial statements preparation, disclosures and its audit for Companies is regulated through solid law with stringent provisions to set high corporate governance and fair reporting among corporates.

The Companies Act 2013 has made the audit of accounts of companies’ compulsory. Section 139 to 148 provide for the qualifications, disqualifications, appointment, removal, rights, duties & liabilities of company auditors. Some of the Key summary of the Provisions in this regard is given below:

1.Appointment of First Auditor:

  (a) First auditor of the company, other than a Government company, shall be appointed by the Board of Directors within 30 days from the date of Incorporation of the company and if the board fails to do so, then Shareholders of the company within 90 days at an extraordinary general meeting shall appoint the first auditor.

  (b) In case of Government company, the first auditor shall be appointed by CAG within 60 days from the date of Incorporation and If CAG fails to appoint, by the Board of Directors of the company within the next 30 days. Upon failure of the Board of Directors the shareholders of the company shall appoint the first auditor within 60 days at an extraordinary general meeting.

  (c) Tenure of appointment the first auditor in both the above cases is till the conclusion of the first AGM.

2.Appointment of Subsequent Auditor: At the 1st AGM, company shall appoint an individual or a firm as an auditor who shall hold office from the conclusion of that AGM till the conclusion of 6th AGM of the Company.

In the case of Government company, CAG, appoint an auditor duly qualified to be appointed as an auditor of the company within a period of 180 days from the commencement of the financial year who shall hold the office till the conclusion of the AGM.

Section 139 read with Rule 5 of the Companies (Audit and Auditors) Rules, 2014 deals with Rotation of Auditors and accordingly following company or a company belonging to such class or classes of companies shall not appoint or re-appoint (a) an individual as auditor for more than one term of 5 Consecutive years; and (b) an audit firm as auditor for more than two terms of 5 consecutive years:

  1. All Listed Companies;
  2. All Unlisted Public Companies having paid-up share capital of Rs.100 crore or more;
  3. All private limited company having paid-up share capital of Rs.50 crore or more;
  4. 4. All companies having paid-up share capital of below threshold limit as mentioned in (2) & (3) above, but having public borrowings from banks, financial institutions or public deposits of Rs.50 crore or more.

The above provisions of “Auditors Rotation” is not applicable for following

  1. One PersonCompany(OPC);
  2. Small Company;
  3. Specified IFSC Public Company;
  4. Specified IFSC Private Company;

Our firm with Young and Dynamic Team with experienced professionals who is well equipped in Statutory Audit of Companies including Audit of Section 8 Companies under Companies Act 2013. We also provide Internal Audit Services for the Corporates as per Section 138 of the Companies Act 2013.