Resolution for Appointment of Auditor

What is an Auditor Appointment Resolution?

An auditor appointment resolution records the decision to appoint a named audit firm for a stated period and fixes what it will be paid. It matters because the auditor's authority to sign your accounts rests on a valid appointment: if the resolution is defective, the term is wrong or a required filing is missed, the audit report attached to your accounts can be questioned by the registrar, a lender or a buyer's due diligence team.

Companies that must have their accounts audited pass one every year, or once at the start of a multi-year term with an annual note. Members usually make the appointment at the annual general meeting; the board appoints the first auditor after incorporation and fills a casual vacancy caused by resignation or death, often subject to later confirmation. Cooperative societies, charities, trusts and larger not-for-profits pass an equivalent resolution under their own governing act, and the wording travels with only the statutory references changed.

Both the need for an audit and the mechanics of appointment vary. Small-company audit exemption thresholds by turnover, balance sheet total and employee numbers exist in the UK and across the EU, and India applies its own criteria under the Companies Act 2013; check the current thresholds rather than last year's. Term and rotation rules differ too — India sets a fixed appointment period with rotation for prescribed classes of company, the EU imposes rotation on public interest entities, and for a US public company the audit committee appoints under SEC and PCAOB rules. Confirm the applicable rule before writing a term into the resolution.

The resolution appoints; it does not engage. Scope of work, timetable, fee basis and limitation of liability live in the auditor's engagement letter, which is a separate contract signed by both sides. It is also not the firm's consent or eligibility certificate — that has to come from the firm before you pass anything. And passing it does not complete the process where the registry requires notice of the appointment on a prescribed form within a set period, as India does on Form ADT-1; check whether your registry needs a filing and by when.

What to put in an Auditor Appointment Resolution

These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.

How to write an Auditor Appointment Resolution

1. Confirm whether members or board appoint

   Read your governing act and articles before drafting. In most regimes the members appoint at the annual general meeting, the board appoints the first auditor within a short window after incorporation, and a casual vacancy is filled by the board but may need members to confirm it. Drafting a members resolution for something the board must do, or the reverse, is a defect that surfaces at the worst time.

2. Get written consent and eligibility first

   Ask the firm for a signed consent to act and a statement that it is eligible and not disqualified — that it holds no prohibited interest in the company, does no incompatible non-audit work, and is within any rotation limit. Date it before the resolution. Keep it with the meeting papers; where a registry filing follows, this is usually one of the attachments it asks for.

3. Name the firm exactly as registered

   Use the registered firm name and its registration number with the professional body — the firm registration number issued by the Institute of Chartered Accountants in India, or the audit registration held with a recognised supervisory body in the UK. Naming the individual partner instead of the firm is the common error; the appointment then attaches to a person who may leave, and the filing will not match the register.

4. Fix the remuneration or delegate it

   Either state the fee as a figure plus taxes and out-of-pocket expenses, or authorise the board to agree it — one or the other, inside the resolution itself. Saying nothing leaves the auditor's fee unapproved, which becomes a finding in its own right and an awkward question at the next annual meeting. If you delegate, say who may agree it and whether a ceiling applies.

5. State the term and authorise the filing

   Write the period precisely: from the conclusion of this meeting until the conclusion of the annual general meeting for the financial year ending on a stated date. Vague terms such as until further notice create a dispute about when reappointment falls due. Then name a director or the secretary to sign and file whatever the registry requires, and to intimate the firm in writing.

Common mistakes

• Appointing a named partner rather than the registered firm, so the appointment lapses when that partner moves and the filing no longer matches the register.
• Leaving remuneration out of the resolution entirely, which leaves the fee unauthorised and reappears as a query at the next annual meeting.
• Writing a term longer than the rotation rules allow, which can invalidate the later years of the appointment for the classes of company those rules cover.
• Passing the resolution before the firm's written consent and eligibility statement exists, leaving the appointment unsupported when the registry asks for the attachment.
• Missing the registry filing deadline that follows the appointment, which attracts late fees and, in some regimes, leaves the appointment ineffective against the registrar.

Frequently asked questions

This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.

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