Appointment of auditor

MR. B (Querist)
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19 July 2014 WHO HAS RIGHT TO APPOINT AUDITOR IN CASE OF PUBLIC COMPANY (2ND YEAR ON WARDS )

Ankur Garg (Expert)
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21 July 2014 For appointment of Auditor kindly refer section 139 of the Companies Act 2013.

It is shareholders who possess the right to appoint statutory auditors. Now auditor is to be appointed for a term of 5 years and shareholders needs to rectify the appointment every year.

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MR. B (Querist)
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21 July 2014 HOW SHAREHOLDER APPOINT TO AUDITOR MY DOUBT IS ACTUALLY SHAREHOLDER NOT KNOWN TO AUDITOR RATHER BOD KNOWN TO THEM

Ankur Garg (Expert)
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21 July 2014 As per the corporate practice Board of Directors recommend the Auditor for appointment to the shareholders. First Board considers the auditor for appointment and then recommends the same to the shareholders through AGM notice.

AGM notice contains the relevant documents related to appointment of auditor like his eligibility certificate for appointment etc. Final decision will be taken by the shareholders and in case of any doubt raised by shareholders, directors are liable to explain the same to the shareholders.

MR. B (Querist)
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21 July 2014 MAY I KNOW Y BOD NOT APPOINTED AUDITOR EVERY YEAR

MR. B (Querist)
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21 July 2014 MAY I KNOW Y AUDITOR NOT APPOINTED BY BOD EVERY YEAR

Ankur Garg (Expert)
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21 July 2014 In Company Law shareholders are recognized as owners of the Company who invest their money into the business of the Company by purchasing shares of the Company.

Directors are appointed as representatives of the shareholders and hold the position of trust for shareholders. Routine business decisions are taken by the Directors keeping in view the interest of the Company. However there are certain decisions in which approval of shareholders is must. Appointment of auditors is one of such businesses where approval of shareholders is required.

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MR. B (Querist)
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21 July 2014 I KNOW SIR,
BUT TELL ME, WHO IS MORE KNOWING ABOUT AUDITOR BOD OR SHAREHOLDER AS A WHOLE

Ankur Garg (Expert)
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21 July 2014 It is not about who know more about Auditor. It is about who has given power under the law. Shareholders are the boss so they have the right like boss is always correct.

Directors are required to sign the Balance Sheet. Do they know how to prepare the trial balance or how to put entry in tally in all cases? Answer would be no but still they have to sign and finance head has to report Directors. There may be various instances like that.
Prime Minister of India has been provided various advisors by law as PM cannot possess knowledge of everything. Just like that board of director’s acts as advisors to the shareholders.

MR. B (Querist)
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22 July 2014 I QUITE AGREE WITH U,
SUPPOSE, BOD HAS DECIDED TO START NEW PROJECT THEN SHAREHOLDER CAN GIVE THEY VOTE ON THE BASIS CONSEQUENCE BUT FOR APPOINTMENT OF AUDITOR ON WHAT BASIS THEY GIVE VOTE

Ankur Garg (Expert)
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22 July 2014 Board of Directors will brief shareholders about the capability, experience and reputation of Auditor. On that basis shareholder vote in favour or against the auditor.

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MR. B (Querist)
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22 July 2014 IS IT POSSIBLE THAT EVERY SHAREHOLDER KNOW ABOUT REPUTATION OF AUDITOR ,

HOWEVER, EVERY BOD KNOW ABOUT IT

Ankur Garg (Expert)
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22 July 2014 As mentioned in my previous reply Directors will brief shareholders about the background, experience and reputation of proposed auditor. This briefing will help shareholders to form an opinion about the auditor about their skills, experience and reputation.

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MR. B (Querist)
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22 July 2014 INSTEAD OF HELPING TO SHAREHOLDER Y BOD NOT APPOINTED TO AUDITOR

MR. B (Querist)
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22 July 2014 INSTEAD OF HELPING TO SHAREHOLDER Y BOD NOT APPOINTED TO AUDITOR