What is meant by rotation of auditors? Discuss the provisions on rotation of auditors as per the Companies (Audit and Auditors) Rules, 2014.

Rotation means changing auditors of the company after a given term. The section 139(2) of the Companies Act, 2013 has introduced the system of rotation of auditors which is applicable to - (i) listed companies; or (ii) all companies belonging to such class or classes of companies as prescribed under Rule 5 of the Companies (Audit and Auditors) Rules 2014. Class of companies covered in rotation scheme According to Rule 5 of the Companies (Audit and Auditors) Rules, 2014, the class of companies shall mean the following classes of companies excluding one person companies and small companies:- (a) all unlisted public companies having paid up share capital of ₹10 crore or more; (b) all private limited companies having paid up share capital of ₹50 crore or more; (c) 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 ₹50 crore or more. The concept of rotation of auditors shall not apply to one person companies and small companies. Following is the manner in which the auditors are to be rotated: In case of an individual as auditor: (a) No individual shall be appointed or re-appointed as auditor for more than one term of 5 consecutive years and (b) An individual auditor, who has completed his term of 5 consecutive years, shall not be eligible for re-appointment as auditor in the same company for 5 years from completion of his term. In case of a firm as an auditor: (a) No audit firm shall be appointed or re-appointed as auditor for more than two terms of 5 consecutive years. (c) An audit firm which has completed its two terms of 5 consecutive years, shall not be eligible for re-appointment as auditor in the same company for 5 years from the completion of such terms. Further 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.