The appointment or removal of auditors is a critical process for ensuring accurate and transparent financial reporting.

Appointment of Auditors: The appointment of auditors must be approved by the company’s shareholders at the Annual General Meeting (AGM). The board of directors first selects a suitable auditor, typically based on their expertise and reputation. The selected auditor’s consent and eligibility certificate must be obtained. Once approved at the AGM, Form ADT-1 is filed with the Registrar of Companies within 15 days, along with the appointment resolution.

Removal of Auditors: Removing an auditor before the end of their term requires a special resolution passed at a general meeting. The company must obtain prior approval from the Central Government by filing Form ADT-2, stating the reasons for removal. Once government approval is received, the company can hold a general meeting to pass the resolution. Subsequently, Form ADT-3 is filed to inform the Registrar of Companies about the auditor’s removal.

Both processes require careful adherence to legal procedures to maintain compliance and uphold corporate governance standards.