Appointment of Statutory Auditor

2. The holder of a certificate in Part B State entitling him to act as an Auditor of
companies.

Q 25. State the detailed provisions with respect to appointment of Statutory Auditors
of a public limited company.

5lns.

Appointment of Statutory Auditor
The detailed provisions regarding the appointment of Auditors of a public limited company are contained in Section 224 qf the Companies Act. These may be noted as follows:

First Auditors
Section 224 (5) lays down that the first Auditors of a company shall be appointed by the Board of Directors within one month of the date of registration of the company. The Auditor or Auditors so appointed shall hold office until the conclusion of the first annual general meeting. The company may, however, at a general meeting, remove any such Auditors and appoint in their place any other person who has been nominated for appointment by any member of the company and of whose nomination notice has been given to the company not less than 14 clear days before the date of the meeting and the company has, in turn, given the notice to the members at least 7 clear days before the date of the meeting.
If the Board of Directors fails to exercise its power, the company in general meeting may appoint the first Auditor or Auditors.
Sometimes, the first Auditors of a company are named in the Articles of Association. Such appointment of Auditors cannot be held valid since the Companies Act grants it no recognition. The first Auditors would be validly appointed only by a resolution of the Board of Directors or that of the company in general meeting.
:::c.

Subsequent Auditor
.Subsequent Auditor or Auditors of a company are appointed every year by the shareholders in annual general meeting by passing an ordinary resolution. Section 224 (1) provides that every company shall, at each annual general meeting, appoint an Auditor or Auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting, and shall, within 7 days of the appointment, give intimation thereof to every Auditor so appointed. Sub-section I-A requires the Auditor so appointed to communicate his acceptance or refusal to the Registrar within a period of 30 days of the receipt from the company of the intimation of his appointment. Acceptance or refusal has to be communicated in writing and shall be in Form No. 23-B prescribed under the Companies Act.
Re-appointment of Retiring Auditor
In accordance with the provisions of Section 224 (2), a retiring Auditor, by whatsoever authority appointed, shall be automatically reappointed except in the following circumstances :
1. Where he is not qualified for re-appointment;