All the government and non-government organizations have to keep track of their accounts and audit reports as the financial year approaches. The financial statements of these firms need to be thoroughly analyzed and assessed before submitting them to the authorized departments. This assessment of financial documents is done by an Auditor.

All the companies registered like a private limited company or one-person company or limited company are required to maintain a proper book of accounts and get the book of accounts audited. Therefore, after the incorporation of a company, an auditor must be appointed by the Board of Directors of the Company. First auditors of the company must be appointed within 30 days of the date of registration of the company by the Directors if not the shareholders can appoint first auditors within 90 days of incorporation. In this article, we look at the requirement and procedures for the appointment of an auditor.

Any individual trained to review and verify accounting data and recognised as a Chartered Accountant (CA) under the Chartered Accountant Act 1949 is deemed to be an auditor.

The appointment of an Auditor is significant in a company that analyses and understands a company’s financial records to deliver effective analyses and relevant information. Management can use this information to evaluate the company and implement measures necessary to meet their objectives.