{“@context”:”https://schema.org”,”@type”:”BlogPosting”,”headline”:”Company Audit Requirements in India: Statutory Audit Rules, Rotation and CARO 2020″,”description”:”Complete guide to company audit requirements under the Companies Act 2013 — who must conduct a statutory audit, first auditor appointment within 30 days, auditor rotation rules under Section 139(2), disqualification criteria under Section 141, and CARO 2020 applicability for specified companies.”,”author”:{“@type”:”Person”,”name”:”Tradeviser Editorial”},”publisher”:{“@type”:”Organization”,”name”:”Tradeviser”},”datePublished”:”2026-09-27″,”inLanguage”:”en-IN”,”mainEntityOfPage”:{“@type”:”WebPage”,”@id”:”https://tradeviser.com/company-audit-requirements/”}}

{“@context”:”https://schema.org”,”@type”:”FAQPage”,”mainEntity”:[{“@type”:”Question”,”name”:”Is a statutory audit mandatory for all companies in India?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Yes. Under Section 139 of the Companies Act 2013, every company registered in India — regardless of size, turnover, or profit — must have its accounts audited by a Chartered Accountant (CA) every financial year. Even companies with zero turnover and no activity must file audited financial statements. There is no threshold below which a company is exempt from statutory audit. (Note: OPCs and small companies have simplified filing forms but still require a full audit.)”}},{“@type”:”Question”,”name”:”When must a company appoint its first auditor?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Under Section 139(6), the Board of Directors must appoint the first auditor within 30 days from the date of registration (incorporation) of the company. If the Board fails to do so within 30 days, the members (shareholders) must appoint the first auditor within 90 days at an Extraordinary General Meeting (EGM). The first auditor holds office until the conclusion of the first Annual General Meeting (AGM).”}},{“@type”:”Question”,”name”:”What is the auditor rotation requirement under Section 139(2)?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Section 139(2) mandates rotation of auditors for listed companies and all ‘specified classes’ of companies: (1) Individual auditors must be rotated after 5 consecutive years; (2) Audit firms must be rotated after 10 consecutive years. This applies to: listed companies, unlisted public companies with paid-up capital ≥ ₹10 crore, private companies with paid-up capital ≥ ₹50 crore, and certain other specified categories. OPCs and small companies are exempt from mandatory auditor rotation.”}},{“@type”:”Question”,”name”:”What are the disqualification criteria for company auditors under Section 141?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”Section 141(3) lists the following as disqualified from being a company auditor: (a) body corporate (only individual CAs and CA firms can audit); (b) an officer or employee of the company; (c) a person who is a partner or employee of an officer or employee of the company; (d) a person who has a business relationship or financial interest in the company; (e) a person who is a director or KMP of the company; (f) a person whose relative holds a security worth more than ₹1 lakh in the company; and (g) a person who is indebted to the company for more than ₹5 lakh.”}},{“@type”:”Question”,”name”:”What is CARO 2020 and which companies does it apply to?”,”acceptedAnswer”:{“@type”:”Answer”,”text”:”The Companies (Auditor’s Report) Order 2020 (CARO 2020) is an order issued by the Central Government under Section 143(11) requiring auditors of specified companies to include specific additional reporting paragraphs in their audit reports. CARO 2020 applies to all companies except: banking companies, insurance companies, Section 8 companies, OPCs, small companies, and private companies with paid-up capital ≤ ₹1 crore and turnover ≤ ₹10 crore and total outstanding loans from banks/financial institutions ≤ ₹1 crore. For companies to which it applies, CARO 2020 requires 21 specific reporting areas including inventory verification, loans given, related party transactions, fraud, and more.”}}}]}

{“@context”:”https://schema.org”,”@type”:”HowTo”,”name”:”How to Appoint a Statutory Auditor for a Private Limited Company”,”step”:[{“@type”:”HowToStep”,”position”:1,”name”:”Board appoints first auditor within 30 days”,”text”:”Pass a Board Resolution within 30 days of incorporation appointing a practicing Chartered Accountant or CA firm as the first statutory auditor. Confirm the CA’s consent and eligibility under Section 141.”},{“@type”:”HowToStep”,”position”:2,”name”:”File Form ADT-1 with the ROC”,”text”:”File Form ADT-1 on the MCA portal within 15 days of the Board’s appointment of the first auditor (or within 15 days of AGM for subsequent appointments). Attach the auditor’s consent letter.”},{“@type”:”HowToStep”,”position”:3,”name”:”Ratify at each AGM (for subsequent auditors)”,”text”:”For subsequent auditors (appointed at the first AGM for a 5-year term), the appointment is ratified at each subsequent AGM unless the company is exempted from such ratification.”},{“@type”:”HowToStep”,”position”:4,”name”:”Apply rotation rules if applicable”,”text”:”For companies subject to Section 139(2), ensure auditor rotation after 5 years (individual) or 10 years (firm). Start the process of identifying the new auditor 6–12 months before the rotation deadline.”},{“@type”:”HowToStep”,”position”:5,”name”:”Communicate resignation or removal”,”text”:”If the auditor resigns, they must file Form ADT-3 with the ROC within 30 days of resignation. If removed, members must pass an ordinary resolution at a general meeting after obtaining Central Government approval.”}]}

CA Madhusmita Padal

CA Madhusmita Padal is a Practicing Chartered Accountant with firms based in Odisha and Chennai. She specializes in taxation, company law, and auditing. She is passionate about simplifying complex concepts and making knowledge accessible to all.