CASUAL VACANCY OF AUDITOR UNDER COMPANIES ACT, 2013
BACKGROUND:
2013 Many professionals have been raising question on interpretation/ procedure for appointment of new auditor due the Casual Vacancy (By Resignation):-
Situation:
Existing Auditor of the Company resigned w.e.f. 30/08/2016 and ADT-3 filed by such Auditor & intimated to Company. Board of Director appointed new Auditor w.e.f. 12/09/2016 for FY 15-16. Tenure of the new auditor will be upto subsequent AGM. Audit for the FY 15-16 shall be done by new Auditor. As per act company have to get approvalof the members within 90 days from the date of recommendation of Board’s Meeting for Auditor appointment. Company is convening AGM on30^th September 2016 then following are the questions:

1. Whether Company required calling EGM before holding of AGM If Company doesnt call EGM whether appointment will be valid. Whether without holding of EGM new auditor will be allowed to sign Financial Statement
2. Whether Company required to file ADT-1 after appointment in Board Meeting or not

Lets first discuss the questions:
Whether Companies have to Call the EGM when AGM is falling within 90 days from the date of Board Meeting (in which auditor is appointed) Some people have confusion in such situation for holding of EGM or AGM. If Company dont hold EGM whether appointment of auditor shall be valid or not
Statutory Provisions Contained Under the Act:
Provisions of the Companies Act, 2013 to the extent relevant for our discussion, are stated as under (with necessary comments and modifications, wherever felt necessary)
As stated in Section 139(8) Any casual vacancy in the office of a Statutory auditor shall in the case of a company other than a company whose accounts are subject to audit by an auditor appointed by the Comptroller and Auditor-General of India, be filled by the Board of Directors within thirty days, but if such casual vacancy is as a result of the resignation of an auditor, such appointment shall also be approved by the company at a general meeting convened within three months of the recommendation of the Board and he shall hold the office till the conclusion of the next annual general meeting;

Interpretation Note:
As stated in Section 139(8) any casual vacancy in the office of Auditor due to resignation of auditor shall be filed by Board of Directors within 30 days and such appointment by Board shall also be approved by the Company at a general Meeting convened within 3 month of the recommendation of the Board.
It is pertinent to note that, in case of casual vacancy arising out of resignation of existing auditor, Board will appointment of an Individual or Audit Firm subject to approval of shareholder in General Meeting and the final authority to approve continuation of appointment of such individual or audit firm as Auditor remains with the members of the Company.
In such situation, the board shall appointment of an Individual or audit firm as auditor within 30 days of the date of casual vacancy and the shareholders shall appoint within 3 months from the date of such recommendation of the Board and the said Individual or Audit firm shall hold the office till conclusion of the next annual general meeting.

CONCLUSION:
Hence, considering the provisions of Section 139(8)(i) one can opine that appointment of auditor in case of casual vacancy due to resignation of auditor by the Board of directors, such auditor shall remain operative during the period when the General Meeting to be held for approval of continuation of appointment of such statutory auditor.
The statutory auditor during such period should be authorized to sign the certificates and issue the reports including singing of financial statement, as per the requirements of respective laws.
Any other opinion is also welcome for further clarity of the provision of the Companies Act.
Thus, here can opine that statutory auditor appointed in Board Meeting due to casual vacancy by resignation can sign the financial statement, auditor report. His appointment shall valid and be approved in AGM (if AGM falling in 90 days period). Further, he may appoint for next 5 year in the AGM.
Remuneration: Section 142 of the Act prescribed that the remuneration of the auditor of a Company shall be fixed by members in General Meeting.
Whether Company required to file ADT-1 after appointment in Board Meeting or not
Form Involved: There company is need to file ADT-1 for appointment of such auditor within 15 days of appointment in the Board Meeting.

(Author CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)
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CASUAL VACANCY OF AUDITOR UNDER COMPANIES ACT, 2013