Statutory auditor appointment is a mandatory compliance requirement for every company under the Companies Act, 2013. Whether you are appointing the first auditor, subsequent auditor, or filling a casual vacancy, the procedure involves specific resolutions, documentation, and MCA filings.
This Saving Mantra guide explains the process in a clear, actionable workflow.
1. Types of Auditor Appointments
Before following the procedure, identify the category of appointment:
a) First Auditor
- Appointed by Board of Directors within 30 days of incorporation.
- If the Board fails, shareholders must appoint at an EGM within 90 days.
b) Subsequent Auditor
- Appointed in the AGM for a term of 5 years.
- Requires filing of Form ADT-1 with MCA.
c) Auditor Appointed Due to Casual Vacancy
- If auditor resigns or vacancy occurs due to other reasons, the Board appoints within 30 days.
- If vacancy is due to resignation, approval by shareholders in a GM is required within 3 months.
2. Step-by-Step Process for Auditor Appointment
Step 1: Obtain Written Consent & Eligibility Certificate
Before appointment, the proposed auditor must provide:
- Consent to act as auditor
- Certificate under Section 141 confirming eligibility, independence, and no disqualification
- Disclosure of:
- Number of audits within permissible limits
- Valid registration details
- Compliance with ethical standards
Step 2: Hold a Board Meeting
The Board passes a resolution to:
- Approve appointment of the auditor
- Fix remuneration (if applicable)
- Authorize a director/CS to file Form ADT-1 and issue appointment letter
For first auditor appointments, Board resolution is sufficient (no shareholder approval unless the Board fails to appoint).
Step 3: Convene the AGM / General Meeting (if applicable)
For subsequent auditor appointment or resignation-related vacancy, a General Meeting is required.
Actions:
- Issue notice to members
- Include an ordinary resolution proposing the auditor’s appointment
- Present all eligibility documents and justification for appointment
Step 4: Members Approve the Auditor Appointment
In the AGM/EGM:
- Members pass the Ordinary Resolution
- Auditor is appointed for the specified term
- Remuneration is approved (unless delegated to the Board)
Step 5: File Form ADT-1 with MCA
This is a mandatory step for auditor appointments (except some first auditors).
Key details of ADT-1 filing:
- Filed within 15 days of appointment
- Attachments include:
- Auditor consent letter
- Eligibility certificate
- Copy of resolution
- Appointment letter (optional)
Step 6: Issue Appointment Letter to Auditor
The company must send a formal appointment letter specifying:
- Term and scope of audit
- Fees & payment terms
- Rights and duties of the auditor
- Expectations regarding reporting and timelines
Step 7: Update Statutory Registers & Records
- Update Register of Auditors
- Maintain all resolutions, notices, and returns in the statutory record book
- Ensure all digital files (supporting documents, ADT-1 SRN) are preserved for audit trail
3. Documents Required
- Consent letter from auditor
- Eligibility & independence certificate (Sec. 141)
- Board resolution
- EGM/AGM resolution (if applicable)
- Appointment letter
- Copy of resignation letter (if casual vacancy due to resignation)
- Form ADT-1 and its attachments
4. Timelines Overview
| Activity | Time Limit |
|---|---|
| First auditor by Board | Within 30 days of incorporation |
| First auditor by shareholders | Within 90 days of Board’s failure |
| Subsequent auditor appointment | At every AGM |
| Filing ADT-1 | Within 15 days of AGM/appointment |
| Casual vacancy appointment | Board within 30 days, GM approval within 3 months |
5. Saving Mantra Tips for Smooth Auditor Appointment
- Ensure auditor is not disqualified under Section 141.
- Always obtain consent and certificate before passing resolutions.
- Double-check ADT-1 attachments; incorrect documents cause rejection.
- Keep resolutions and filings aligned to your internal compliance calendar.
- Use Saving Mantra’s centralized compliance workflow to automate reminders and maintain documentation.
Conclusion
Auditor appointment is more than a formal process—it ensures financial integrity, statutory compliance, and transparency in your organization. By following the correct procedure and timelines, companies avoid penalties and ensure smooth regulatory filings.
Saving Mantra helps businesses complete auditor appointments end-to-end, from drafting resolutions to filing ADT-1 and managing statutory registers.
The information provided in this blog is for general informational and educational purposes only and should not be construed as legal, tax, or professional advice. While every effort has been made to ensure accuracy and compliance with the applicable provisions of the Companies Act, 2013 and related rules, laws and regulations may change over time and interpretations may vary based on specific facts and circumstances. All services are subject to applicable laws, rules, and government approvals prevailing at the time of execution.