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Appointment of auditors

Tanya (Student CMA) (72 Points)

24 November 2012

Please help me out with the following case study- M/S SS Associates, CA who were appointed as auditor by the members in AGM refuses to accept the appintment. In such case who can appoint another auditor?

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8 Replies

Rohit Kapoor (CA Final) (543 Points)
Replied 24 November 2012

Appointment will be made by the central govt in this case.

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(Guest)

If auditor refuses to accept appointment it shall be deemed that no auditor or auditors had been appointed by the company at its annual general meeting and the power of the Central Government under section 224(3), to appoint auditors becomes exercisable.

@*CS Siddharth Bumb. * (B.Com, CA Final, CS ) (5270 Points)
Replied 24 November 2012

Originally posted by : Dharmender Reddu
	If auditor refuses to accept appointment it shall be deemed that no auditor or auditors had been appointed by the company at its annual general meeting and the power of the Central Government under section 224(3), to appoint auditors becomes exercisable.

Tanya (Student CMA) (72 Points)
Replied 24 November 2012

Thanks every1 .. I have few other queries.. 1.For a firm to be appointed as a statutory auditor of companies, is it necessary for all the partners of the firm to practise in India? 2. If a partner of a firm is in full time or part-time employment elsewhere, will such firm be qualified to be appointed as a statutory auditor? If yes, will they be considered for the computation of specified number?

ANJALI NEGI (Chartered Accountant) (1263 Points)
Replied 24 November 2012

yaaa..i agree with dharmender.....

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Ravishankar K (Accountant) (461 Points)
Replied 24 November 2012

we usually get a list of CAG listed auditors and from that list we send letters to some 4-5 auditors and personally meet and fix one auditor who is interested to take up this assignment at this cost / fees. Usually any one auditor will accept and once they give acceptance then for that FY they have to oblige and do the audit.

Then next year also same procedure is adopted well in advance, if any auditor doesnt accept then the second auditor is given chance. This is about societies as we are a society we follow this .. for companies or shops & establishments i am not aware.

CA Lukesh Sethi (CHARTERED ACCOUNTANT) (150 Points)
Replied 24 November 2012

Dear Tanya,

For your first query, if auditor refuses to accept appointment, then it is to be deemed that no auditor has bes been appointed in AGM.and in that case Section 224(3) becomes excercisable and give power to Central Government to appoint auditor.

In this case, company has to intimate to Central Govt. by filing Form 24A regarding non appointment of auditor in AGM. This form will be filed with Regional ROC Office through MCA21 filing. Then Regional Director will appoint auditor. For this form and appointment of auditor no fees will be charged.

For your second query, Regarding appointment of auditor in case of partner practising india and partner is in full time or part time employment.

Auditor will not be disqualified in case of partner practising india subject to condition firm in India is under the charge of a member of the Institute This is a mandatory requirement under Section 27 of the Chartered Accountants Act, 1949.