Question

Consider the following statements regarding the appointment of auditors under Section 139 of the Companies Act, 2013: Statement 1: The first auditor of a company can be appointed by the Board of Directors within 30 days before the first annual general meeting. Statement 2: Subsequent auditors are appointed at the annual general meeting and hold office from conclusion of that meeting till conclusion of the sixth AGM. Statement 3: An auditor can be reappointed immediately without any restrictions on the number of consecutive terms. Statement 4: The Audit Committee (where constituted) shall recommend the auditor to the Board for appointment. Which statements are correct?

Q: Answer-Consider the following statements regarding the appointment of auditors under Section 139 of the Com...

Section 139 prescribes auditor appointment. Statement 1 is correctSection 1391 allows the Board to appoint the first auditor within 30 days before the first AGM. Statement 2 is correctsubsequent auditors are appointed at AGM and hold office for a 6-year term. Statement 4 is correctSection 1393 requires the Audit Committee where constituted to recommend the auditor. Statement 3 is incorrect because Section 13910 provides that an auditor shall not be reappointed after holding office for two consecutive terms of five years each now extended to two consecutive terms allowing up to 8 or 10 years depending on appointment. Statements 1, 2, and 4 are correct.