{"id":6763,"date":"2021-12-17T04:30:59","date_gmt":"2021-12-17T04:30:59","guid":{"rendered":"https:\/\/msassociates.pro\/articles\/?p=6763"},"modified":"2025-09-14T20:33:57","modified_gmt":"2025-09-14T20:33:57","slug":"appointment-and-resignation-of-auditors","status":"publish","type":"post","link":"https:\/\/www.msassociates.pro\/articles\/appointment-and-resignation-of-auditors\/","title":{"rendered":"Appointment and resignation of auditors"},"content":{"rendered":"

The Companies Act 2013 prescribes a specific procedure for auditor resignation and appointment. The Auditor is appointed in the companies under section 139 and resigns under section 140 of the Companies Act, 2013.<\/p>\n

This article discusses the formalities and procedures required for auditor resignation and appointment.<\/p>\n

Auditor Resignation and Procedure of Filing Form ADT 3<\/h3>\n

After providing a notice for resignation to the company, an auditor shall file a statement in the form of ADT-3 form. This statement shall be sent to the ROC\u00a0within 30 days\u00a0from the date of the resignation.<\/p>\n

Details Required in ADT-3 Form<\/h3>\n

1. Name of the auditor\u2019s firm.<\/p>\n

2. Address of the resigning auditor firm.<\/p>\n

3. Reasons of resignation<\/p>\n

4. Email address of the auditor firm<\/p>\n

5. Resigning auditor firm\u2019s contact numbers.<\/p>\n

6. Permanent account number of the auditor firm.<\/p>\n

7. Copy of the form ADT3 must be digitally signed by any one member of the auditor firm.<\/p>\n

If the resigning auditor fails to intimate ROC regarding resignation within the prescribed 30 days time, he is charged penalty ranging from Rs. 50,000 to 5 lakhs.<\/p>\n

Stepwise Procedure for Auditor\u2019s Resignation<\/h3>\n

The procedure for an auditor\u2019s resignation must be followed in the below mentioned sequential form. A careful \u00a0execution of the below-mentioned steps will avoid any error in the process:<\/p>\n

    \n
  1. \n

    First of all, the auditor has to submit the resignation letter and Form ADT3 to the company.<\/p>\n<\/li>\n

  2. \n

    A board of meeting shall be organized with all the directors for effecting the resignation.<\/p>\n<\/li>\n

  3. \n

    The company shall obtain a consent letter from the new auditor firm under section \u00a0139 and 141, Companies Act 2013.<\/p>\n<\/li>\n

  4. \n

    A board of meeting shall be called. All the members of the company shall be called in the meeting for filling the vacancy of the auditor.<\/p>\n<\/li>\n

  5. \n

    The proposed Auditor\/Auditors\u2019 Firm is to be appointed in such meeting held.<\/p>\n<\/li>\n

  6. \n

    Intimate the Appointed auditor\/ Auditors\u2019 firm regarding the date of appointment.<\/p>\n<\/li>\n<\/ol>\n

    File the form ADT-1 for the appointment of the new auditor.<\/p>\n

    After the resignation of an auditor, a company has to carry out prescribed formalities\/ Procedures for appointing new auditor.<\/p>\n

    Documents Required for Appointment of New Auditor<\/h3>\n

    When a company appoints a new auditor, following documents shall be filed by the company.<\/p>\n

      \n
    1. \n

      Form MGT-14 with a copy of the resolution passed in the board meeting.<\/p>\n<\/li>\n

    2. \n

      Form ADT -1 to be filed with the ROC.<\/p>\n<\/li>\n<\/ol>\n

      Information to be Submitted to ROC for Auditor Appointment<\/h3>\n
        \n
      1. \n

        Name of the new auditor firm.<\/p>\n<\/li>\n

      2. \n

        Address of the new auditor firm.<\/p>\n<\/li>\n

      3. \n

        Email address and PAN number.<\/p>\n<\/li>\n

      4. \n

        Number of years for which the firm is appointed.<\/p>\n<\/li>\n

      5. \n

        Information of the resigning auditor firm.<\/p>\n<\/li>\n

      6. \n

        Date of appointment of the new auditor firm.<\/p>\n<\/li>\n

      7. \n

        Digitally signed Form ADT 1 (with signature of the director of the company).<\/p>\n<\/li>\n<\/ol>\n

        The ADT-1 form shall be filed within 30 days from the date of the appointment of the new auditing firm. \u00a0Every company has to follow the prescribed rules as per Companies Act for resignation and appointment of an auditor firm.<\/p>\n

        Those were all we had to share on provisions and procedure related to appointment and resignation of auditor, please visit\u00a0us<\/a>\u00a0for any queries.<\/p>\n

        \n

        Auditor Appointment vs Auditor Resignation \u2014 Forms, Timeline & Authority<\/h2>\n
        \n\n\n\n\n\n\n\n\n
        Aspect<\/th>\nAuditor Appointment<\/th>\nAuditor Resignation<\/th>\n<\/tr>\n<\/thead>\n
        Key Forms<\/td>\nADT-1 (filed with ROC); Board resolution (MGT-14 where applicable)<\/td>\nADT-3 (filed by the resigning auditor with ROC)<\/td>\n<\/tr>\n
        Timeline<\/td>\nADT-1 within 30 days from the date of appointment<\/td>\nADT-3 within 30 days from the date of resignation<\/td>\n<\/tr>\n
        Authority Involved<\/td>\nBoard meeting; members to fill vacancy; ROC filing<\/td>\nAuditor notifies company; auditor files ADT-3 with ROC<\/td>\n<\/tr>\n
        Penalty (non-filing)<\/td>\nNon-compliance may invite action under the Companies Act (file ADT-1 on time).<\/td>\nFailure to file ADT-3: penalty \u20b950,000 to \u20b95,00,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/section>\n
        \n

        Auditor Change Flow: Resignation \u2192 ROC \u2192 New Appointment<\/h2>\n
          \n
        1. \n
          Auditor serves resignation notice to the company<\/div>\n<\/li>\n
        2. \u2b07<\/li>\n
        3. \n
          Auditor files ADT-3<\/strong> with ROC within 30 days<\/strong> of resignation<\/div>\n<\/li>\n
        4. \u2b07<\/li>\n
        5. \n
          Company convenes Board meeting; seeks consent of proposed auditor (Secs. 139 & 141)<\/div>\n<\/li>\n
        6. \u2b07<\/li>\n
        7. \n
          Members\u2019 meeting to fill the vacancy; appointment finalized<\/div>\n<\/li>\n
        8. \u2b07<\/li>\n
        9. \n
          Company files ADT-1<\/strong> with ROC (within 30 days of appointment); MGT-14 (where applicable)<\/div>\n<\/li>\n
        10. \u2705<\/li>\n<\/ol>\n<\/section>\n
          \n

          Auditor Appointment & Resignation \u2014 FAQs<\/h2>\n
          \nIs ADT-3 mandatory for auditor resignation?<\/summary>\n
          Yes. After giving resignation notice to the company, the auditor must file ADT-3<\/strong> with the ROC within 30 days<\/strong> of resignation. Non-filing can attract a penalty of \u20b950,000 to \u20b95,00,000<\/strong>.<\/div>\n<\/details>\n
          \nWho can sign ADT-1?<\/summary>\n
          ADT-1<\/strong> (for appointment of auditor) must be digitally signed by a director of the company<\/strong>.<\/div>\n<\/details>\n
          \nWhat happens if a company doesn\u2019t appoint a new auditor on time?<\/summary>\n
          The Board\/members must promptly fill the vacancy and complete ROC filing (ADT-1 within 30 days of appointment). Delay risks non-compliance under the Companies Act and potential regulatory action. For case-specific guidance, seek professional advice.<\/div>\n<\/details>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

          The Companies Act 2013 prescribes a specific procedure for auditor resignation and appointment. The Auditor is appointed in the companies under section 139 and resigns under section 140 of the Companies Act, 2013. This article discusses the formalities and procedures required for auditor resignation and appointment. Auditor Resignation and Procedure of Filing Form ADT 3 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-6763","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nAppointment & Resignation of Auditors | ADT-3 Guide<\/title>\n<meta name=\"description\" content=\"Step-by-step guide on auditor appointment & resignation under Companies Act 2013. Learn ADT-3 filing, documents needed & penalties. 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