Shine Ltd. wishes to appoint PMQ firm for the first time as the auditor of the company for a period of 5 years at the company's annual general meeting to be held on 30th June, 2015. You are required to (ii) State whether

In case of specified companies, the concept of rotation of auditor applies. Section 139(2) provides that in such companies, an audit firm may be appointed or reappointed as auditor upto two consecutive terms of five consecutive years. Accordingly, the PMQ firm can be re-appointed on the expiry of the tenure of five years, provided Shine Ltd. is not a company to which the provisions of rotation of auditors apply, or if it is, then PMQ firm has not completed its two consecutive terms of five years. Note: It is not clear in the question that whether Shine limited is covered under section 139(2). Also whether or not, PMQ is a sole proprietor firm or partnership firm. The answer would be changed accordingly.