Skip to content

CA Intermediate · Corporate and Other Laws · Audit and Auditors

Meera & Co., a firm of chartered accountants, is the statutory auditor of Kaveri Textiles Ltd, an unlisted public company. The board wants to appoint a first auditor of the company for a company incorporated just a month ago. Under the Companies Act, 2013, who appoints the first auditor of a company that is not a Government company, and within what time?

The Board of directors appoints the first auditor within 30 days of the company's registration. Only if the Board fails to do so must the members be informed, and they then appoint the auditor at an extraordinary general meeting within 90 days.

  1. AThe board of directors, within 30 days of registrationCorrect
  2. BThe shareholders in a general meeting, within 90 days of registration
  3. CThe Registrar of Companies, within 60 days of registration
  4. DThe promoters, at the time of filing the incorporation documents

Explanation

The first auditor of a non-Government company is appointed by the Board within 30 days of registration. If the Board fails, members must be informed and they appoint within 90 days at an extraordinary general meeting. The 90-day shareholder route is only the fallback, so option B is wrong.

Did you get it right without looking?

One question tells you little. A timed set on Audit and Auditors shows your real accuracy, how long you take and where you lose marks.

Practise Audit and AuditorsFree diagnostic mock

More Audit and Auditors questions