Change of Auditor of a Company
Replace a statutory auditor the right way: resignation, casual vacancy or removal, with ADT forms and resolutions in order.
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Change of auditor is the process by which a company replaces its statutory auditor, because the auditor has resigned, is being removed, or a casual vacancy has arisen, and files the related forms with the Registrar of Companies. It applies to private and public companies that must appoint an auditor under the Companies Act, 2013. The route differs sharply: a vacancy caused by resignation is filled one way, while removal before the term ends needs a special resolution and prior approval of the Central Government. Our team guides the board and members through resolutions, auditor consent and the filing of Forms ADT-1, ADT-2 and ADT-3 as applicable.
Who provides this service: our team of Company Secretaries and compliance specialists.
Who Needs Change of Auditor?
- Companies whose statutory auditor has resigned or become ineligible
- Boards that must fill a casual vacancy before the next general meeting
- Promoters who are unhappy with audit service and need to know the lawful route
- Companies moving to a larger firm after growth or a fundraising round
- Subsidiaries aligning with the group auditor after a change of parent
Key Benefits
- Trigger identified correctly, because resignation, removal and casual vacancy follow different sections of the Act
- Auditor consent and eligibility certificate collected and checked before the resolution is passed
- Board and member resolutions drafted, including special notice where the Act requires it
- Form ADT-2 application prepared with reasons and facts where removal needs Central Government approval
- ADT-1 filing coordinated with the outgoing auditor ADT-3 so the public record is consistent
- Handover of information to the incoming auditor planned so the audit calendar is not disturbed
How It Works
Identify the Trigger
We establish whether the change arises from resignation, removal, expiry of term, disqualification or death, because each trigger follows a different section of the Companies Act and a different set of forms and approvals.
Auditor Consent and Eligibility
The incoming auditor gives written consent and a certificate confirming eligibility under the Act. We collect these and check that the firm is not barred by any disqualification before the appointment is proposed.
Board and Member Resolutions
We draft the board resolution and, where needed, the notice and the ordinary or special resolution of members, including special notice where the Act requires it, so that the change is validly approved.
Approval for Removal Cases
If an auditor is being removed before the term ends, an application in Form ADT-2 is made for prior approval, with reasons and supporting facts, before the special resolution is passed, and the auditor is heard.
Filing ADT-1 and ADT-3
The company files Form ADT-1 with the Registrar after the new appointment. If the outgoing auditor resigned, that auditor files Form ADT-3 giving reasons, and we coordinate so both filings are consistent.
Records and Handover
Statutory registers, board minutes and communications to banks, lenders and tax authorities are updated, and the handover of information and working papers to the new auditor is coordinated with the management.
Documents Required
- Certificate of incorporation, memorandum and articles of association
- Resignation letter of the outgoing auditor and copy of Form ADT-3, if applicable
- Written consent of the proposed auditor to act
- Eligibility certificate from the proposed auditor
- Board resolution recommending the new appointment
- Notice of the general meeting with explanatory statement
- Special notice and special resolution for removal, where applicable
- Form ADT-2 application and Central Government order, in removal cases
- Firm registration and partner details of the proposed audit firm
- Minutes of the meeting and copy of the filed Form ADT-1
Timeline and Fees
Indicative timeline: Typically a few weeks for a vacancy or resignation case; removal cases take longer because Central Government approval is needed first, and timing depends on that authority.
Professional fee: The professional fee depends on whether the change is by resignation, vacancy or removal, how many resolutions and meetings are needed, whether an ADT-2 application is involved and the number of filings. Contact us for a quote after a short review.
What Can Go Wrong if This Is Missed or Done Incorrectly
- Removing an auditor without the prior Central Government approval can be challenged as invalid
- Failure to file Form ADT-1 or ADT-3 in time leads to late fees and a public record that does not match reality
- Appointing an auditor who is not eligible can put the validity of the audit report in doubt
- A gap with no auditor can delay adoption of financial statements and annual filings
- An arbitrary change can attract questions from lenders, investors and regulators
Frequently Asked Questions
Can a company change its auditor any time it wants?
Not freely. A statutory auditor is appointed for a term, and removing one before it ends needs a special resolution of members and prior approval of the Central Government under Section 140. A company can, however, accept a resignation, fill a casual vacancy or appoint a different auditor at the end of the term, each by its own procedure.
What is a casual vacancy in the office of an auditor?
It is a vacancy that arises during the auditor's term, for instance through resignation, death or disqualification. The board fills it within the time the Act allows. If the vacancy came from a resignation, members must also approve the appointment at a general meeting, and the appointee then holds office until the next annual general meeting.
What is Form ADT-3?
Form ADT-3 is the statement an auditor files with the company and the Registrar of Companies on resigning, giving the reasons and facts relevant to the resignation. It must be filed within the period fixed by the Act. It is the auditor's responsibility, but the company should track it, since it affects the board's next steps.
What is Form ADT-1 and who files it?
Form ADT-1 is the notice a company gives to the Registrar of Companies about the appointment of an auditor, including a fresh appointment after a change. The company files it within the time prescribed after the appointment, with the consent and resolution attached. A missed filing leaves the public record wrong and late fees may apply.
Does the new auditor need to give consent?
Yes. Before appointment the proposed auditor must give written consent and a certificate that the firm is eligible and not disqualified under the Act. The company should collect both before the resolution is passed, because an appointment made without eligibility can be questioned later and may affect the validity of the audit report.
Is a change of auditor the same as a fresh appointment of auditor?
They overlap but are not identical. A change begins with a trigger such as resignation, removal or vacancy and ends with a new appointment. A first or regular appointment at the annual general meeting has no outgoing auditor to deal with. If only the appointment is needed, see our appointment of auditor page; if a prior auditor is leaving, this page applies.
Official Sources
Rules, forms and fees change. Check the current position on the official portal:
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Last reviewed: . Laws, fees and procedures change; check the official portal before you act.
Disclaimer: The information on this page is for general informational purposes only and does not constitute professional legal, tax or compliance advice. Requirements vary by situation. Please consult a qualified CA or CS for advice specific to your needs. Government fees and timelines are subject to change; verify with the relevant authority before proceeding.