Stay Compliant with Auditor Rotation Requirements
Auditor rotation is a mandatory compliance requirement under the Companies Act, 2013 for certain classes of companies. It ensures auditor independence and strengthens corporate governance.
N D Savla & Associates manages the complete transition — from eligibility review to appointment of a new auditor and regulatory filings.
What is Auditor Rotation?
Auditor rotation refers to the mandatory change of statutory auditors after completion of a specified tenure, as prescribed under Section 139 of the Companies Act, 2013.
Who is Required to Rotate Auditors?
- Listed companies
- Unlisted public companies meeting prescribed thresholds
- Private companies meeting turnover/borrowings criteria
Maximum Tenure Limits
- Individual Auditor: Maximum 5 consecutive years
- Audit Firm: Maximum 10 consecutive years
- Cooling-off period of 5 years before reappointment
Key Compliance Requirements
- Track auditor tenure
- Ensure eligibility of new auditor
- Board & shareholder approval
- Proper documentation & resolutions
- Filing Form ADT-1 with ROC
Documents Required
- Board resolution
- Shareholder approval (AGM)
- New auditor consent & eligibility certificate
- Outgoing auditor details
Process of Auditor Rotation
- Review applicability & tenure status
- Identify and finalize new auditor
- Obtain consent & eligibility certificate
- Pass Board & shareholder resolutions
- File ADT-1 with MCA
- Update statutory records
Why Choose N D Savla & Associates?
Compliance Accuracy
Ensure correct interpretation of rotation rules.
Expert Advisory
Guidance on eligibility and auditor selection.
Timely Execution
Avoid penalties with timely rotation.
End-to-End Support
From planning to final filing.
Compliance Tracking
We track tenure and alert you in advance.
Trusted Partner
Reliable support for corporate compliance.
Frequently Asked Questions
Is auditor rotation mandatory for all companies?
No, it applies only to specified classes of companies based on listing status, turnover, and borrowings.
What happens if auditor rotation is not followed?
Non-compliance can lead to penalties and issues in statutory filings and audits.
Can the same auditor be reappointed after rotation?
Yes, but only after completion of the mandatory cooling-off period of 5 years.
Is ADT-1 required for auditor rotation?
Yes, Form ADT-1 must be filed with ROC for appointment of the new auditor.
When should auditor rotation be planned?
It should be planned well before the expiry of the current auditor’s tenure to avoid last-minute issues.
Can an audit firm rotate internally with partner change?
No, rotation applies to the audit firm as a whole, not just individual partners.