Auditor Resignation and Removal: Section 140 Risk Checklist
Auditor exits need more care than routine vendor changes. Section 140 governs removal, resignation and special notice, and the compliance risk rises when audit work, financial statements or unresolved issues are pending.
For broader context, see the Companies Act, MCA and Startup Compliance Hub.
Section 140 base
Section 140 states that an auditor appointed under Section 139 may be removed before expiry of term only by special resolution of the company, after obtaining previous approval of the Central Government in the prescribed manner. It also covers resignation by auditor.
For the connected rule, example or next step, see Auditor Appointment Under Section 139: ADT-1 and First Auditor Checklist.
Exit file checklist
| Item | Control |
|---|---|
| Resignation letter / removal proposal | Capture reason and effective date clearly. |
| Board/shareholder process | Check special resolution / approval route where applicable. |
| ADT-3 / relevant filing trail | Preserve filed form and acknowledgement. |
| Pending audit handover | Document books, queries and workpapers status. |
| Communication to incoming auditor | Ensure professional handover and independence checks. |
Red flags
- Auditor resigns close to filing deadline.
- Reason for resignation mentions non-cooperation or unresolved issues.
- Company changes auditor before financial statements are finalised.
- ADT-3 or appointment filing not aligned.
- No board note explaining transition.
Finin2min warning
Official sources used
This article is intentionally source-limited to official MCA / India Code material. Verify final filing positions with the latest Act, Rules, MCA forms and portal advisories before publishing.
- India Code: Section 140 — Removal, Resignation of Auditor and Special Notice
- India Code: Section 139 — Appointment of Auditors
- India Code: Companies Act, 2013 official PDF
FAQs
Section 140 covers removal, resignation of auditor and special notice.
No. Section 140 sets a special-resolution and approval route for removal before expiry of term.
Yes. Pending audit queries, books and filings should be tracked during auditor transition.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Companies Act & MCA
- Official starting point
- www.mca.gov.in