Regulation 57 — Audit Regulations 2020
Original Rule Text
# 57. Appointment of statutory auditor
As per Section 139(5) and 139(7) of the Companies Act, 2013 the Statutory Auditors of a Government company or any other company, is to be appointed by the Comptroller and Auditor General.
The Comptroller and Auditor General shall appoint the statutory auditor for a financial year through a process of selection as may be prescribed and thereafter, subject to the following Regulations; re-appoint him on year to year basis unless special circumstances warrant appointment for a longer period. The total period of appointment including the initial appointment should not ordinarily exceed four financial years. The appointment shall be subject to such terms and conditions as may be prescribed from time to time and available on Comptroller and Auditor General’s website.
What This Means
The CAG appoints statutory auditors for government companies under Sections 139(5) and 139(7) of the Companies Act, 2013. The auditor is selected through a prescribed process and initially appointed for one year, with possible annual re-appointments. The total appointment period should normally not exceed four financial years. All terms, conditions, and the selection process are published on the CAG's website.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1CAG has exclusive authority to appoint statutory auditors for government companies
- 2Initial appointment is for one financial year, renewable annually
- 3Total tenure should ordinarily not exceed 4 financial years
- 4Selection follows a prescribed process available on CAG's website
- 5Longer appointments are possible only in special circumstances
Practical Example
When Air India needs a statutory auditor for FY 2025-26, the CAG's office selects a Chartered Accountant firm through its prescribed panel/process and issues an appointment order. If the firm performs well, CAG may re-appoint it for FY 2026-27, 2027-28, and 2028-29, but by FY 2029-30, a new firm would typically be appointed to ensure rotation and independence.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can a government company appoint its own statutory auditor?▼
Why is there a 4-year cap on auditor tenure?▼
Where can one find the current terms and conditions for statutory auditor appointment?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.