Applicability of Manner of Rotation of Auditor

Rotation of Auditor

Rotation of Auditor
Rotation of Auditor Sec 139(2) of companies Act 2013 applicable to every listed companies and other prescribed companies except One Person & Small company.

Prescribed Companies:

Unlisted Public Company	Having paid up capital >=Rs. 10Crore
Private Limited Company	Having paid up capital >=Rs. 50Crore

or public borrowing from Bank/ Financial Institution, Public Deposits >=Rs. 50Crores

Tenure of Auditor:

For Individual	One Term of 5 consecutive years
For Partnership Firm	TwoTerm of 5 consecutive years in each of them

After completing of tenure, cooling period of 5 years will be started.

Firm having common partner with Rotated Firm- as on date of appointed shall not be appointed as auditor of same Company for a period of 5 years.

Transitional Period- Existing Company shall ensure compliance with requirement of section 139(2) within 3 years from date of commencement of this section.

Computation of consecutive years in Existing Company- The period of which auditor has held office of auditor of company prior commencement of this Act will also be considered.

Any Break in Term for a continuous period- If break period is:

Less than 5 years	Old service period before will not be lapsed
Less year or more	Old service period before will be lapsed

Resignation by Partner in charge of Rotated Firm

If he resigns, from rotated firm and joins another firm as partner then such other firm shall also be ineligible to be appointed for 5 years.

Association in same network of Audit Firm.

Incoming auditor shall not be eligible if such auditor is associated with outgoing under same network of audit firms. Same network includes firm operating or functioning under same brand name, trade or common control.