Conditions Before Appointment of Auditor & Intimation to ROC
# Conditions Before Appointment of an Auditor
## 1. Auditor to provide to company:
Before appointment, the proposed auditor must furnish:
1. Written consent to act as auditor
2. Certificate that:
He is eligible for appointment and not disqualified under the Act
The appointment is in accordance with conditions prescribed in the Act
The list of proceedings against the auditor or audit firm pending in respect of professional matters of conduct, as disclosed in the certificate, is true and complete
## 2. Intimation to ROC – Form ADT-1
On appointment of auditor:
Company must file Form ADT-1 with the ROC
Within 15 days from the date of appointment
The form is filed by the Company (not by the auditor)
## 3. NFRA-1 Filing under NFRA Rules (Section 132)
Under National Financial Reporting Authority (NFRA) Rules:
The company / body corporate governed under NFRA Rules must inform NFRA in Form NFRA-1
Within 15 days of appointment of auditor
Note: Companies governed by Companies Act, 2013 are not required to file NFRA-1 (only certain bodies corporate outside the Act are required); however, the auditor of NFRA-governed entities files NFRA-2 annually.
Worked example
### Example 1
Example: XYZ Ltd. appointed M/s ABC & Co. as statutory auditors at AGM held on 30-Sep-2024. By when must Form ADT-1 be filed?
Within 15 days of appointment → by 15-Oct-2024. Filed by the company.
### Example 2
Example: Mr. P, before being appointed as auditor of LMN Ltd., gives only a written consent but no certificate. Is the appointment valid?
No – both written consent AND the certificate (regarding eligibility, compliance with conditions, and truth of disclosure of pending proceedings) are required before appointment.
⚠️ Common exam mistakes
Assuming the auditor files ADT-1 – it is the COMPANY that files it.
Forgetting one of the three certificate requirements (eligibility, compliance, and pending proceedings).
Confusing the 15-day ADT-1 timeline with the 30-day timeline for first auditor.
Assuming all companies must file NFRA-1.
Bare-Act text Rule 4 read with Section 139(1) and NFRA Rules, 2018 · Companies (Audit and Auditors) Rules, 2014 · click to expand
Rule 4 of Companies (Audit and Auditors) Rules, 2014: The auditor appointed under rule 3 shall submit a certificate that – (a) the individual or the firm, as the case may be, is eligible for appointment and is not disqualified for appointment under the Act, the Chartered Accountants Act, 1949 and the rules or regulations made thereunder; (b) the proposed appointment is as per the term provided under the Act; (c) the proposed appointment is within the limits laid down by or under the authority of the Act; (d) the list of proceedings against the auditor or audit firm or any partner of the audit firm pending with respect to professional matters of conduct, as disclosed in the certificate, is true and correct.