## Manner and Procedure of Selection & Appointment of Auditors [Rule 3, CAAR 2014]
### Step 1: Evaluating the Proposed Auditor
Whether or not an Audit Committee (AC) is required, the qualifications and experience of the proposed auditor must be considered, and whether these are commensurate with the size and requirements of the company. The AC or Board may call for information from the proposed auditor.
---
### When NO Audit Committee is Required
```
Board considers and recommends auditor → Members approve at AGM
```
---
### When an Audit Committee IS Required
```
AC recommends auditor to Board
↓
Board AGREES → Board recommends to members → AGM approves
↓
Board DISAGREES → Refers back to AC with reasons
↓
AC reconsiders
├── AC changes recommendation → Board agrees → AGM
└── AC does NOT reconsider → Board records disagreement
+ sends its OWN recommendation to AGM
```
### Key Points on AC–Board Disagreement
- The Board cannot unilaterally override the AC; it must refer back.
- The AC has the final substantive say — if it maintains its position, the Board must document its disagreement but the matter still goes to the AGM (with the Board's recommendation).
- Members at the AGM make the final appointment decision.