The Classic Partners LLP

Auditor Rotation

Advisory and compliance for mandatory auditor rotation under Section 139(2) of the Companies Act, 2013 — helping listed and prescribed classes of companies rotate individual auditors and audit firms within the permitted tenure and cooling-off period.

Plan Your Auditor Rotation

What is Auditor Rotation?

Auditor rotation requires certain classes of companies to change their auditor after a fixed tenure so that audit independence is preserved. Under Section 139(2), an individual cannot be appointed as auditor for more than one term of five consecutive years, and an audit firm for more than two terms of five consecutive years.

After completing the permitted tenure, the outgoing auditor must observe a cooling-off period of five years before being reappointed. The new appointment is then completed and intimated to the Registrar, similar to a regular Auditor Appointment.

Which Companies Need Auditor Rotation?

Listed companies covered by the rotation requirement.
Prescribed unlisted public companies crossing the specified thresholds.
Prescribed private companies crossing the specified capital or borrowing limits.
Companies approaching the end of an auditor's permitted tenure.
Companies planning a smooth and well-documented audit transition.

Our Auditor Rotation Services

Rotation Applicability Assessment

Checking whether the rotation rules apply to your company and from when.

Tenure and Cooling-Off Tracking

Tracking completed tenure and the five-year cooling-off requirement.

New Auditor Appointment

Identifying and appointing an eligible incoming auditor or firm.

Form ADT-1 Filing

Filing the intimation of the new appointment with the Registrar of Companies.

Transition and Handover Support

Coordinating a documented handover between the outgoing and incoming auditor.

Board and Audit Committee Advisory

Guidance to the Board and audit committee on the rotation process.

Steps in the Auditor Rotation Process

Assess applicability of the rotation rules and the auditor's existing tenure.
Determine the cooling-off requirement for the outgoing auditor or firm.
Shortlist an eligible incoming auditor and obtain consent.
Pass the appointment resolution at the appropriate meeting.
File Form ADT-1 with the Registrar of Companies.
Ensure a documented handover and continuity of audit coverage.

Why Choose The Classic Partners

Practical assessment of applicability so you rotate only when the law requires it.
Coordinated with Auditor Appointment and your annual filings for a clean transition.
Careful tenure and cooling-off tracking to keep the company compliant.
Transparent fees and a dedicated point of contact, delivered by Chartered Accountants in Mumbai serving clients across India.

Related Compliance Services

Auditor Appointment Services — Appoint your statutory auditor and file Form ADT-1 on time.
Auditor Resignation Services — Manage auditor resignation, Form ADT-3, and the casual vacancy.
Annual General Meeting Services — Hold your AGM with adoption of accounts and statutory appointments.

Frequently Asked Questions

What is auditor rotation under the Companies Act?

Auditor rotation is the requirement for certain companies to change their auditor after a fixed tenure, so that the same auditor or firm does not audit a company indefinitely and audit independence is maintained.

Which companies are required to rotate auditors?

Rotation applies to listed companies and to prescribed classes of unlisted public and private companies that cross the capital, borrowing, or other limits specified under the rules.

What is the maximum tenure for an individual auditor and a firm?

An individual auditor cannot serve more than one term of five consecutive years, and an audit firm cannot serve more than two terms of five consecutive years for the companies covered by rotation.

What is the cooling-off period for auditor rotation?

After completing the permitted tenure, the outgoing auditor or audit firm must observe a cooling-off period of five years before being reappointed in the same company.

Are private companies covered by auditor rotation?

Private companies are covered only if they cross the prescribed thresholds for paid-up capital or borrowings. Small private companies below those limits are generally outside the rotation requirement.

How do you ensure a smooth transition during rotation?

We plan the timing in advance, obtain the new auditor's consent, complete the appointment and Form ADT-1, and coordinate a documented handover so there is no gap in audit coverage.

Need help with Auditor Rotation?

Get clear, compliant auditor rotation handled by experienced Chartered Accountants.