A company’s statutory auditor is appointed under the Companies Act, 2013 to audit its financial statements. First appointments, subsequent AGM appointments, vacancies, resignation and removal follow different procedures. Establish the appointment event before choosing a resolution or filing form.
Reviewed 6 October 2026. The principal provisions are sections 139–141; cost audit is separately addressed by section 148. Official Companies Act.
Who is eligible to be a statutory auditor?#
Section 141 addresses eligibility and disqualifications. An individual statutory auditor must be a chartered accountant; eligible firms are subject to the statutory conditions, with qualified partners authorised to act. A cost accountant’s qualification alone does not establish eligibility as a company’s financial-statement auditor. Cost auditors perform a separate role under the cost-audit framework.
Obtain consent and the required eligibility certificate before appointment. Check independence, disqualifications, relationships and applicable appointment limits. A certificate copied from a previous year without review is weak evidence of current eligibility.
First auditor and subsequent appointment#
| Event | Main statutory route | Action to verify |
|---|---|---|
| First auditor of a non-government company | Board appointment within 30 days of registration under section 139(6); statutory member route if the Board fails | Incorporation date, Board action and applicable escalation timeline |
| Subsequent appointment | Member appointment at the relevant AGM under section 139(1) | Consent, eligibility, term, rotation applicability and notice filing |
| Government-company appointment | Separate CAG and fallback framework | Do not apply the ordinary company procedure unchanged |
| Casual vacancy, resignation or removal | Specific statutory procedures | Cause of vacancy, approval route, notices and relevant forms |
The usual section 139(1) appointment runs from conclusion of the appointing AGM to conclusion of the sixth AGM, subject to applicable law. Mandatory rotation does not apply to every company merely because five years have passed. It depends on the prescribed class and whether the auditor is an individual or firm.
ADT-1 and appointment evidence#
Section 139(1) provides for notice to the Registrar within 15 days of the relevant meeting. Do not apply that provision indiscriminately to every first-auditor appointment under section 139(6). Confirm the current rules and instruction kit for the actual event. Resignation and removal have separate forms and procedures.
The former annual ratification requirement should not be described as a continuing universal obligation. Keep the appointment resolution, consent, eligibility certificate, engagement terms and applicable filing acknowledgement together. Official MCA forms and instructions.
Practical appointment workflow#
- Identify company type and the reason for appointment.
- Review eligibility, independence and rotation applicability.
- Obtain consent and supporting declarations.
- Put the appointment before the correct approving authority.
- Record the resolution and appointment term accurately.
- Complete the applicable notice filing and save processing evidence.
- Agree audit scope, access to records and the reporting timetable.
An auditor change should include a documented handover and review of outstanding issues. Appointment is not a substitute for management preparing reliable accounts or maintaining statutory registers.
Frequently asked questions#
Can a cost accountant be appointed as a company’s statutory auditor?
A cost-accounting qualification alone does not meet the statutory financial-auditor eligibility requirement. Cost audit under section 148 is a separate role from financial-statement audit under sections 139–141.
Does every company have to change auditors after five years?
No. Check mandatory rotation applicability and the rules for individual auditors and audit firms. Appointment tenure and mandatory rotation are related but different requirements.
Is ADT-1 required within 15 days for every first auditor appointment?
Do not treat the section 139(1) notice requirement as a blanket statement covering all appointment routes. Check section 139(6), the current rules and official form instructions for the first-auditor event.
Related work#
Coordinate appointment with MCA annual filing and financial record preparation. Contact SigmaTenders with the incorporation date, company type and reason for appointment to prepare the correct workflow.