Companies Act 2013 · Rules · G.S.R. 246(E)
Companies (Audit and Auditors) Rules, 2014
Appointment, rotation, removal and resignation of the statutory auditor, the extra matters an auditor must report on, and how an auditor reports a fraud.
Last checked: 27 October 2026 against the Ministry of Corporate Affairs consolidated rules text.
| Notification | G.S.R. 246(E) dated 31 March 2014 · made for Chapter X of the Act |
|---|---|
| Act sections | 139, 140, 141, 143, 144, 147, 148 |
| MCA forms | ADT-1, ADT-2, ADT-3, ADT-4 |
| Latest amendment | Companies (Audit and Auditors) Amendment Rules, 2025, G.S.R. 359(E) dated 30 May 2025 In force from 14 July 2025. MCA's text confirms the rule 13 changes and that effective date. The G.S.R. number and notification date come from published reports of the Gazette notification. Forms ADT-1 to ADT-4 were replaced. Source: MCA text + Gazette reports · 8 amending notifications shown in MCA's text |
The rules, one by one
Rule numbers and headings follow MCA's consolidated text. Rule 1 (short title) and rule 2 (definitions) are left out unless they matter in practice. The notes are a plain-English guide, not the rule text.
| Rule | Heading | What it says |
|---|---|---|
| 3 | Selection and appointment of auditors | The audit committee, or the board where there is none, considers the candidate's qualifications and experience before recommending the appointment. |
| 4 | Conditions for appointment and notice to Registrar | The auditor's written consent and eligibility certificate are required. The company files ADT-1 within 15 days of the meeting. |
| 5 | Class of companies for rotation | Rotation under section 139(2) applies to listed companies, unlisted public companies with paid-up capital of ₹10 crore or more, private companies with paid-up capital of ₹50 crore or more, and companies below these limits with public borrowings or deposits of ₹50 crore or more. One Person Companies and small companies are excluded. |
| 6 | Manner of rotation | An individual auditor can serve one term of 5 years and an audit firm two terms of 5 years, followed by a 5-year cooling-off period. |
| 7 | Removal of auditor before expiry of term | Central Government approval is sought in ADT-2 before the special resolution. |
| 8 | Resignation of auditor | The auditor files ADT-3 within 30 days of resigning. |
| 9 | Liability on concerned partners only | |
| 10 | Disqualifications of auditor | Limits on business relationships and indebtedness to the company. |
| 10A | Applicability of section 141(3)(i) | |
| 11 | Other matters in the auditor's report | The report covers pending litigation, foreseeable losses, IEPF transfers, money routed through intermediaries, dividend compliance and whether the audit trail feature was used. |
| 12 | Branch audit | |
| 13 | Reporting of frauds by auditor | A fraud of ₹1 crore or more is reported to the Central Government in Form ADT-4. A smaller fraud is reported to the audit committee or the board and disclosed in the board's report. From 14 July 2025, ADT-4 is filed electronically. |
| 14 | Remuneration of cost auditor | The board appoints the cost auditor and the members ratify the remuneration. |
Related
- Form ADT-1 auditor appointment
- Auditor rotation
- Section 139 explainer
- All Companies Rules · Companies Act 2013 ready reckoner
Other rules explained in detail: Incorporation Rules · Share Capital and Debentures Rules · Acceptance of Deposits Rules · Management and Administration Rules · Accounts Rules · Appointment and Qualification of Directors Rules · Meetings of Board and its Powers Rules
Sources: Ministry of Corporate Affairs, Acts & Rules e-book (consolidated rules with amendment notes), and the Gazette of India notifications named on this page. This page is a plain-English guide, not the text of the rules. Check the current rule on the MCA portal before relying on it.