Audit and Auditors

Question 1

Appointment of First Auditor in Govt. Company

Answer 1

CAG within 60 days of incorporation —> If not, BOD within 30 days —> If not members will appoint in EGM within 60 days

Question 2

Appointment of First Auditor in Non Govt. Company

Answer 2

BOD within 30 days—> If not, members within 90 days

Question 3

Subsequent Auditor in Non-Govt. Co.

Answer 3

Individual auditor - 5 years (1st to 6th AGM)
Firm - 10 years (1st to 11th AGM)

Question 4

Subsequent Auditor in Govt. Co.

Answer 4

CAG within 180 days of the commencement of FY and the term of the auditor shall be the conclusion of the subsequent AGM.

Question 5

Casual Vacancy
of Auditor

Answer 5

Auditor shall file within 30 days from the date of resignation the Form ADT- 3
If he fails then penalty min. Rs. 50,000 or the remuneration of the auditor, whichever is lower. Further penalty of Rs. 500/day upto Rs. 2 Lakh.

Question 6

PENALTIES - Sec. 147

Answer 6

Co. -> Min. - Rs. 25,000 and Max. Rs. 5,00,000
Director’s Fine –> Min. - Rs. 10,000 and Max. - Rs. 1,00,000
Auditor –> A) Unknowingly involved - Min. - Rs. 25,000 and Max. Rs. 5,00,000 OR 4X Remuneration whichever is less
B) Knowingly involved - Imprisonment upto 1 year and FINE Min. - Rs. 50,000 and Max. - Rs. 25,00,000 OR 8X Remuneration whichever is less