Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Practising CA only
The auditor must be an independent practising CA/firm — not an employee, relative or anyone with a conflict.
Appointment (ADT-1)
First auditor by the board within 30 days; then at each AGM, with Form ADT-1 filed with the ROC.
Independence and disqualifications
Beyond holding a Certificate of Practice, the auditor must be independent. A person can’t audit a company where they, or a relative or partner, hold securities or a financial interest, owe or are owed beyond prescribed limits, or have a business relationship with the company. An employee or officer of the company, or someone whose relative is a director or key managerial person, is disqualified. These rules protect the audit’s credibility. A casual breach — say the auditor’s spouse holding shares — can invalidate the appointment, so the company and auditor both confirm eligibility before Form ADT-1 is filed. The auditor also files a written consent and eligibility certificate. There are also limits on the number of companies one auditor can take on and a bar on providing certain non-audit services to the same company, both aimed at keeping the audit independent.