Are you a company secretary or director tasked with appointing a statutory auditor?
Crafting the right appointment letter is crucial to ensure clarity and compliance.
But where do you start?
We’ve compiled 15 sample letters to guide you through the process.
Whether you’re a small startup or a large corporation, these templates will help you appoint your auditor with confidence.
Let’s dive in!
Sample Letters of Appointment of Statutory Auditors
The following sample letters cover various scenarios for appointing statutory auditors:
Letter 1: Appointment of First Auditor
Subject: Appointment as First Auditor of [Company Name]
Dear [Auditor Name],
The Board of Directors of [Company Name] is pleased to inform you that you have been appointed as the first auditor of the company in the Board Meeting held on [Date]. Your appointment is effective until the conclusion of the first Annual General Meeting of the company.
As per section 139(6) of the Companies Act, 2013, your appointment is to be ratified by the shareholders in the ensuing general meeting. The remuneration for the audit will be Rs. [Amount] plus applicable taxes and out-of-pocket expenses.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. We look forward to working with you.
Sincerely,
[Name]
[Designation]
[Company Name]
Letter 2: Appointment for 5-Year Term
Subject: Appointment as Statutory Auditor for a Term of Five Years
Dear [Auditor Name],
On behalf of the Board of Directors of [Company Name], I am delighted to inform you that the shareholders of the company, in the [Number] Annual General Meeting held on [Date], have appointed you as the Statutory Auditor of the company for a term of five years. Your appointment is effective from the conclusion of this Annual General Meeting until the conclusion of the [Number] Annual General Meeting to be held in the year [Year].
The remuneration for the audit will be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses, as recommended by the Board and approved by the shareholders.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. We are confident that your expertise will greatly benefit our company.
Best regards,
[Name]
[Designation]
[Company Name]
Letter 3: Appointment to Fill Casual Vacancy
Subject: Appointment as Statutory Auditor to Fill Casual Vacancy
Dear [Auditor Name],
We regret to inform you that [Previous Auditor Name], the Statutory Auditor of [Company Name], has resigned due to [Reason for Resignation], thereby creating a casual vacancy in the office of the Statutory Auditor.
The Board of Directors, in their meeting held on [Date], has appointed you as the Statutory Auditor of the company to fill this casual vacancy, as per the provisions of section 139(8) of the Companies Act, 2013. Your appointment is effective until the conclusion of the forthcoming Annual General Meeting.
The remuneration for the audit will be Rs. [Amount] plus applicable taxes and out-of-pocket expenses.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. We appreciate your willingness to step in during this time.
Sincerely,
[Name]
[Designation]
[Company Name]
Letter 4: Appointment of Joint Auditors
Subject: Appointment as Joint Statutory Auditor
Dear [Auditor Name],
The shareholders of [Company Name], in the [Number] Annual General Meeting held on [Date], have appointed you as one of the Joint Statutory Auditors of the company for the financial year [Financial Year]. Your appointment is effective from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting.
You will be conducting the audit jointly with [Other Auditor Name]. The division of work and the areas to be audited by each joint auditor will be decided mutually by both of you.
The remuneration for the audit will be Rs. [Amount] per annum, to be divided equally between the joint auditors, plus applicable taxes and out-of-pocket expenses, as approved by the shareholders.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. We believe your collaboration will provide a thorough and balanced audit.
Best regards,
[Name]
[Designation]
[Company Name]
Letter 5: Appointment of Branch Auditor
Subject: Appointment as Branch Auditor
Dear [Auditor Name],
The Board of Directors of [Company Name], in their meeting held on [Date], has appointed you as the Branch Auditor to audit the accounts of the [Branch Name] branch of the company for the financial year [Financial Year].
Your appointment is as per the provisions of section 143(8) of the Companies Act, 2013, and will be in addition to the audit conducted by the Statutory Auditors of the company.
The remuneration for the branch audit will be Rs. [Amount] plus applicable taxes and out-of-pocket expenses.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. Your focused audit of the branch operations will be invaluable.
Sincerely,
[Name]
[Designation]
[Company Name]
Letter 6: Reappointment for Second Term
Subject: Reappointment as Statutory Auditor for Second Term
Dear [Auditor Name],
On behalf of the Board of Directors of [Company Name], it gives me great pleasure to inform you that the shareholders of the company, in the [Number] Annual General Meeting held on [Date], have reappointed you as the Statutory Auditor of the company for a second term of [Number] years.
Your reappointment is effective from the conclusion of this Annual General Meeting until the conclusion of the [Number] Annual General Meeting to be held in the year [Year].
The remuneration for the audit will continue to be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses, as approved by the shareholders.
Please confirm your acceptance of this reappointment by signing and returning the enclosed copy of this letter. We are grateful for your continued service and look forward to working with you again.
Best regards,
[Name]
[Designation]
[Company Name]
Letter 7: Appointment After Resignation of Previous Auditor
Subject: Appointment as Statutory Auditor After Resignation of Previous Auditor
Dear [Auditor Name],
We regret to inform you that [Previous Auditor Name], the Statutory Auditor of [Company Name], has resigned due to [Reason for Resignation], thereby vacating the office of the Statutory Auditor.
The Board of Directors, in their meeting held on [Date], has appointed you as the new Statutory Auditor of the company, as per the provisions of section 139 of the Companies Act, 2013. Your appointment is subject to the approval of the shareholders in the forthcoming general meeting.
The remuneration for the audit will be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses, subject to the approval of the shareholders.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. We appreciate your willingness to take on this role.
Sincerely,
[Name]
[Designation]
[Company Name]
Letter 8: Appointment for Audit of Consolidated Financial Statements
Subject: Appointment as Auditor for Consolidated Financial Statements
Dear [Auditor Name],
The Board of Directors of [Company Name] is pleased to appoint you as the auditor to audit the consolidated financial statements of the company and its subsidiaries for the financial year [Financial Year].
This appointment is in addition to your existing appointment as the Statutory Auditor of the company. The audit of consolidated financial statements will be conducted by section 129(4) of the Companies Act, 2013.
The additional remuneration for the audit of consolidated financial statements will be Rs. [Amount] plus applicable taxes and out-of-pocket expenses.
Please confirm your acceptance of this additional appointment by signing and returning the enclosed copy of this letter. Your expertise in auditing consolidated statements will be greatly appreciated.
Best regards,
[Name]
[Designation]
[Company Name]
Letter 9: Appointment with Increase in Audit Fees
Subject: Appointment as Statutory Auditor with Increase in Audit Fees
Dear [Auditor Name],
The shareholders of [Company Name], in the [Number] Annual General Meeting held on [Date], have appointed you as the Statutory Auditor of the company for the financial year [Financial Year].
Considering the increased volume of transactions and the additional audit work required, the shareholders have also approved an increase in the audit fees. The revised remuneration for the audit will be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses.
Please confirm your acceptance of this appointment and the revised audit fees by signing and returning the enclosed copy of this letter. We believe the increased fees fairly compensate for the additional work.
Sincerely,
[Name]
[Designation]
[Company Name]
Letter 10: Appointment After Retirement of Previous Auditor
Subject: Appointment as Statutory Auditor After Retirement of Previous Auditor
Dear [Auditor Name],
[Previous Auditor Name], the Statutory Auditor of [Company Name], has retired after completing the maximum permissible term as per the Companies Act, 2013.
The shareholders of the company, in the [Number] Annual General Meeting held on [Date], have appointed you as the new Statutory Auditor of the company for a term of [Number] years. Your appointment is effective from the conclusion of this Annual General Meeting.
The remuneration for the audit will be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses, as approved by the shareholders.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. We look forward to a fruitful association with you.
Best regards,
[Name]
[Designation]
[Company Name]
Letter 11: Appointment of New Auditor After Rotation
Subject: Appointment as Statutory Auditor After Mandatory Rotation
Dear [Auditor Name],
As per the mandatory auditor rotation provisions under section 139 of the Companies Act, 2013, [Previous Auditor Name], the Statutory Auditor of [Company Name], has completed the maximum permissible term and is due for rotation.
The shareholders of the company, in the [Number] Annual General Meeting held on [Date], have appointed you as the new Statutory Auditor of the company for a term of [Number] years. Your appointment is effective from the conclusion of this Annual General Meeting.
The remuneration for the audit will be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses, as approved by the shareholders.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. We are confident you will bring a fresh perspective to the audit process.
Sincerely,
[Name]
[Designation]
[Company Name]
Letter 12: Appointment with Change in Audit Scope
Subject: Appointment as Statutory Auditor with Change in Audit Scope
Dear [Auditor Name],
The shareholders of [Company Name], in the [Number] Annual General Meeting held on [Date], have reappointed you as the Statutory Auditor of the company for the financial year [Financial Year].
In addition to the statutory audit, the shareholders have also approved expanding the scope of your audit to include [Additional Audit Scope, e.g., tax audit, GST audit]. The remuneration for the expanded audit scope will be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses.
Please confirm your acceptance of this reappointment and the change in audit scope by signing and returning the enclosed copy of this letter. Your versatility in handling different types of audits is much appreciated.
Best regards,
[Name]
[Designation]
[Company Name]
Letter 13: Appointment for Audit of Foreign Subsidiary
Subject: Appointment as Auditor for Foreign Subsidiary
Dear [Auditor Name],
The Board of Directors of [Company Name] is pleased to appoint you as the auditor to audit the financial statements of our foreign subsidiary, [Subsidiary Name], for the financial year [Financial Year].
This appointment is by section 143(8) of the Companies Act, 2013, and the audit will be conducted as per the applicable laws and regulations of the country where the subsidiary is located.
The remuneration for the audit will be [Amount and Currency] plus applicable taxes and out-of-pocket expenses.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter. Your international audit experience will be invaluable for this assignment.
Sincerely,
[Name]
[Designation]
[Company Name]
Letter 14: Appointment with Peer Review Requirement
Subject: Appointment as Statutory Auditor with Peer Review Requirement
Dear [Auditor Name],
The shareholders of [Company Name], in the [Number] Annual General Meeting held on [Date], have appointed you as the Statutory Auditor of the company for the financial year [Financial Year].
As per the requirements of the Institute of Chartered Accountants of India (ICAI), your firm should have undergone a peer review and hold a valid peer review certificate. Please provide a copy of the peer review certificate along with your acceptance of this appointment.
The remuneration for the audit will be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses, as approved by the shareholders.
Please confirm your acceptance of this appointment by signing and returning the enclosed copy of this letter, along with the peer review certificate. We are confident your peer-reviewed firm will deliver a high-quality audit.
Best regards,
[Name]
[Designation]
[Company Name]
Letter 15: Appointment with NFRA Requirements
Subject: Appointment as Statutory Auditor with NFRA Requirements
Dear [Auditor Name],
The shareholders of [Company Name], in the [Number] Annual General Meeting held on [Date], have appointed you as the Statutory Auditor of the company for the financial year [Financial Year].
As our company falls under the purview of the National Financial Reporting Authority (NFRA), additional reporting requirements will apply to the statutory audit. Please ensure compliance with all NFRA rules and regulations during the audit.
The remuneration for the audit, including the additional NFRA compliance work, will be Rs. [Amount] per annum plus applicable taxes and out-of-pocket expenses, as approved by the shareholders.
Please confirm your acceptance of this appointment and your agreement to comply with the NFRA requirements by signing and returning the enclosed copy of this letter. Your experience with NFRA compliance will ensure a smooth audit process.
Sincerely,
[Name]
[Designation]
[Company Name]
Wrapping Up: Importance of Appointment Letters
Appointing a statutory auditor is a significant responsibility for any company.
A well-drafted appointment letter sets the tone for a successful audit by clearly outlining the terms of engagement, scope of work, and remuneration.
These 15 sample letters cover a wide range of scenarios, from first-time appointments to reappointments, joint audits branch audits, and more.
By adapting these templates to your specific situation, you can ensure a professional and compliant appointment process.
Remember, the appointment letter is just the beginning.
Maintaining open communication and providing the necessary support throughout the audit process is key to a fruitful auditor-client relationship.
So go ahead, choose the letter that best fits your needs, customize it, and take the first step towards a successful statutory audit!