The apex body of Chartered Accountants - Institute of Chartered Accountants of India (ICAI) - withdrew an announcement regarding the applicability of rotation of auditors at companies after the government issued a directive. In an odd instance, the Ministry of Corporate Affairs told the ICAI to “immediately withdraw” the announcement and also provide reasons for making such an announcement, according to the letter.
“The Corporate Laws & Corporate Governance Committee had issued the announcement regarding clarification on the applicability of rotation principles on a company as per Section 139 of the Companies Act 2013 where the company ceases to fall under the ambit of rotation principles in subsequent years on January 29, 2019,” said the ICAI post announcing the withdrawal of the statement, reported Financial Express.
On 29 January, the ICAI issued a clarification on the applicability of rotation of auditors under the Companies Act, 2013. Under this Act, a specific class of companies are required to rotate their auditors, and there is also a cooling off period which the auditors have to follow.
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