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Non filing of form 23b by re-appointed auditor

Sheetal Goel (CA, CS) (62 Points)

25 June 2013

In a private Company an Auditor was re-appointed in AGM in September 2012 for the year 2012-13. He has not filed Form 23B with ROC.

Later he wanted to resign and we are to be appointed as Statutory Auditors for the year 2012-13.

What will be the correct procedure to give effect to such resignation and our appointment in the current date?

Also any fine or penalty will be involved if we ask for his resignation in current date and then our appointment in current date for the year 2012-13

Thanks & Regards

Sheetal Goel

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2 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 25 June 2013

Appointment of auditors is from one AGM to the next AGM and not for a financial year. You can take resignation letter from the existing auditors and the vacancy can be filled by the company in general meeting u/s 224(6).

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umaa's legal clinic (simple solutions for complex legal issues) (165 Points)
Replied 25 June 2013

Dear Sheetal,

1. Form 23B is statutory form, and by filing it fixes the responsibility of any wrong or false statement which he signs.

2. Sec.224(1A) made it mandatory to file form 23B by using the word "shall"

3. Hence you have to follow the following procedure:

a. Ask the company to file form 23B.

b. Take resignation from the existing auditor

c. And then appoint auditor under sec.224(6) and proviso to sec224(6)(a) says where casual vacancy is caused by the resignation of an auditor, the vacancy shall only be filled by the company in general meeting.

d. Otherwise you may also advise the company to file eform 23B by not accepting (click no to point 7 in the form) the appointment by the auditor.