Under the Companies Act, 2013, every company must appoint a statutory auditor to ensure fair and transparent financial reporting. The first auditor is appointed by the Board of Directors within 30 days of incorporation. If the Board fails, members appoint the auditor in an Extraordinary General Meeting (EGM). Thereafter, auditors are generally appointed for a term of five years, subject to ratification at each Annual General Meeting (AGM). The appointment is made by filing Form ADT-1 with the Registrar of Companies (ROC).

An auditor may be removed before the expiry of their term by passing a special resolution in a general meeting, subject to prior approval from the Central Government (filed through Form ADT-2). Additionally, an auditor may resign by filing Form ADT-3, giving valid reasons.

Proper appointment and removal of auditors is crucial for maintaining statutory compliance, stakeholder confidence, and transparent corporate governance. Non-compliance may attract penalties on both the company and its officers.