Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
5 / 10 year rotation
Individual auditor: max one 5-year term. Audit firm: max two 5-year terms (10 years), then a cooling-off period.
Who's covered
Listed companies and prescribed classes (by paid-up capital or borrowings). Confirm thresholds. Small private companies are usually outside it.
Counting the term correctly
Where rotation applies, past terms count: years the auditor already served before the rules began are generally included when working out the 5- or 10-year limit, so check the history rather than starting the clock fresh. After the term ends there’s a cooling-off period — commonly five years — before the same auditor or firm can return. Companies covered are listed companies and prescribed classes by paid-up capital, borrowings or public deposits. Most small private companies fall outside rotation, but a company that grows past a threshold can be pulled in, so it’s worth re-checking each year rather than assuming the earlier position still holds. Even where rotation doesn’t apply, an auditor is normally appointed for a five-year term and ratification at each AGM is no longer required, so the appointment runs unless changed by the members.