Ram is a practising Chartered Accountant and partner of two audit firms namely PYMG and YE. In the immediately preceding financial year, PYMG has completed its two terms of five consecutive years in Gayatri Pvt. Ltd. hav

According to the provisions of section 139 of the Companies Act, 2013 read with Rule 5 of Companies (Audit and Auditors) Rules, 2014 the following companies are required to appoint and rotate auditors: all listed companies; all unlisted public companies having paid up share capital of rupees ten crore or more; all private limited companies having paid up share capital of rupees fifty crore or more; all companies having paid up share capital of below threshold limit mentioned in (a) and (b) above, but having public borrowings from financial institutions, banks or public deposits of rupees fifty crores or more. An individual auditor who has completed his term as auditor for more than one term of five consecutive years and an audit firm who has completed the term as auditor for more than two terms of five consecutive years shall not be re-appointed as an auditor of the company. It is further provided that as on the date of appointment no audit firm having a common partner or partners to the other audit firm, whose tenure has expired in a company immediately preceding the financial year, shall be appointed as auditor of the same company for a period of five years. Accordingly in the present case the company is required to appoint and rotate the auditors on completion of the tenure. Thus Gayatri Ltd cannot appoint YE audit firm as auditor of the company. a. In case the appointee company is a One Person Company, rotation of auditor does not apply and hence the appointing company can appoint YE audit firm as auditor. b. In case the appointee company is a Small Company, rotation of auditor does not apply and hence the appointing company can appoint YE audit firm as auditor.