Question

auditors rotation

Answer 1

Auditors Rotation: Rotation of Auditors will be Applicable for the following companies.

1) Listed companies

2) Unlisted public companies having paid up share capital of 10 crores or more

3) all private limited companies having paid up share capital of 50 crores or more

4) all companies having paid up capital of below threshold limit as said above but having borrowings from financial institutions, banks , public deposits of 50 crores or more.

It is not applicable to the following

1) One person companies

2) small companies

Terms of Rotation:

The above said class of companies cannot appoint or reappoint

1) an a individual as an auditor for more than one term of five consecutive years

2) an audit firm as an auditor for more than two terms of five consecutive years

It is noted that if there is a common partner in the audit firm whose tenure has expired in another audit firm, that audit firm will also be not eligible for appointment.