Auditor Rotation Services
Certain classes of companies can't keep the same auditor indefinitely — Section 139 sets fixed tenure limits and a mandatory cooling-off period.
Under Section 139(2) of the Companies Act, listed companies and certain classes of unlisted public and private companies (based on paid-up capital or borrowings, as prescribed) cannot appoint an individual auditor for more than one term of five consecutive years, or an audit firm for more than two terms of five consecutive years each. After completing the maximum tenure, there's a mandatory five-year cooling-off period before the same auditor or firm can be reappointed.
What this service covers
Planning rotation well before it becomes a deadline problem.
- Checking whether the company falls under mandatory rotation rules
- Tracking existing auditor tenure against the five/ten-year limits
- Planning the transition timeline and new auditor selection
- Managing the outgoing and incoming auditor handover
- Filing ADT-1 for the new appointment
- Documenting compliance with the cooling-off requirement
Who rotation applies to
Rotation isn't universal — it applies to specified classes of companies.
Listed Companies
All listed companies are subject to mandatory auditor rotation regardless of size.
Specified Unlisted Companies
Unlisted public companies and certain private companies meeting prescribed paid-up capital or borrowing thresholds.
Exemptions
One-person companies and small companies are generally excluded from the mandatory rotation requirement.
Our process
From initial consultation to completion.
Assess Applicability
Determine if the company falls within the classes subject to mandatory rotation.
Track Tenure
Calculate the current auditor's completed terms against the statutory limit.
Plan the Transition
Identify and evaluate a new auditor well ahead of the mandatory changeover.
File the New Appointment
Complete the AGM resolution and ADT-1 filing for the incoming auditor.
Why rotation planning matters
What sets our approach apart.
Independence by design
Rotation is meant to preserve auditor independence over long relationships with the same management.
Transition takes time
A new auditor needs time to understand the company's books before signing off on financial statements.
Non-compliance is visible
An auditor appointment beyond the permitted tenure is flagged during regulatory review and audits of the audit itself.
Auditor Rotation Services questions answered
What people ask before engaging us.
Approaching your mandatory auditor rotation?
We'll plan the transition well ahead of the deadline.
