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.
1. Determine adequacy of internal controls.
2. Promote best practices for controls.
3. Ensure compliance with policies and regulations.
4. Identify operational inefficiencies and waste.
5. Review IT projects, systems, and technology.
6. Provide objective insight.
7. Assess efficient and responsible use of resources.
1. Company’s Board resolution copy
2. NOC from old auditors
3. A written consent from the Auditor to such appointment
4. A certificate from the Auditor that he/she/it is not disqualified to be appointed as an Auditor under section 141
5. Copy of the intimation sent by company to the auditor
6. Name of the new auditor firm
7. Address of the new auditor firm
8. Email address and PAN number
9. A number of years for which the firm is appointed
10. Details of the resigning auditor firm
11. Appointment date of the new auditor firm
12. Digitally signed Form ADT-1 (along with the signature of the director of the company)
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