Overview of filling in an Auditor appointment & MCA clarification

Overview of Filing of Auditor Appointment (Form ADT-1) & Recent MCA Clarifications

Form ADT-1 is a statutory form filed by a company with the Registrar of Companies (ROC) to intimate the appointment or re-appointment of its auditor under Section 139(1) of the Companies Act, 2013. It serves as a notice to the ROC regarding the auditor's appointment and is not the appointment resolution itself.

Before appointing an auditor, the company should ensure that the proposed auditor satisfies the eligibility conditions prescribed under Section 141, is not subject to any disqualification, complies with applicable auditor rotation provisions, and does not exceed the statutory ceiling on audit assignments.

•  Purpose of Filling of ADT-1: ADT-1 is an intimation to ROC regarding the appointment of an auditor. And it is not the appointment resolution itself.
• Who files Filling of ADT-1: The company files ADT-1. And The auditor only provides consent and eligibility certificates.
• When is Filling of ADT-1 required? Appointment of auditor at an AGM. Reappointment of auditor. And appointment of a new auditor where Section 139(1) applies.
• Due Date of Filling of ADT 1: Must be filed within 15 days from the date of the AGM/meeting in which the auditor is appointed or re-appointed.

First Auditor vs. Subsequent Auditor

In Case of First Auditor

• Governed by Section 139(6).
• Usually appointed by the Board.
• Holds office till the first AGM.
• ADT-1 applicability should be examined separately.

Subsequent Auditor

• Governed by Section 139(1).
• Appointed or re-appointed by shareholders at AGM.
• ADT-1 filing is specifically prescribed.

Documents Required for First Auditor vs Subsequent Auditor

• CIN and company details
• Auditor's name and PAN
• Membership Number/FRN
• Auditor's consent letter
• Eligibility certificate u/s 141
• Board/Shareholders' Resolution
• Previous auditor details (if applicable)

Step for ADT-1 Filing Process

• Identify applicable auditor appointment provision.
• Obtain auditor's written consent.
• Obtain eligibility certificate.
• Pass Board/Shareholders' Resolution.
• Prepare auditor and company details.
• File ADT-1 on MCA Portal.
• Pay prescribed fees.
• Preserve SRN and acknowledgement.

Consequences of Delay: Additional filing fees on the MCA Portal, possible penalties u/s 139 to 147 of the Companies Act. and compliance defaults against the company and officers in default.

Recent MCA Clarifications on Filling in an Auditor Appointment

This MCA clarification is very important for practicing Chartered Accountants, Company Secretaries, and companies because many filings of ADT-1 and AOC-4 are failing due to incorrect SRN references.

1. Casual Vacancy Cases:

MCA Clarification relating to Form ADT-1 in Casual Vacancy: While filing ADT-1 for appointment due to a casual vacancy: Enter SRN of the original ADT-1, or Form 23B, or Form GNL-2. But they Do not enter ADT-3 SRN. Otherwise, MCA may show: "Enter valid SRN associated with the CIN."

• When a company appoints an auditor due to a casual vacancy and files Form ADT-1, the system asks for Field 7(b): "Specify the SRN of relevant form"
• Correct SRN to be entered: You must enter the SRN of the form through which the auditor's original appointment was recorded: Original ADT-1, or Form 23B (old MCA-21 system), or Form GNL-2 (where applicable)
• Incorrect SRN: Many professionals are entering the ADT-3 SRN (form for auditor resignation), which results in the error "Enter valid SRN associated with CIN" MCA has specifically clarified:  Enter ADT-1 / 23B / GNL-2 SRN and  Do not enter ADT-3 SRN. Suppose M/s XYZ Pvt Ltd appointed Auditor A in AGM and filed ADT-1 with SRN A12345678, Auditor A resigned and company filed ADT-3 with SRN B87654321, and New Auditor B is appointed in casual vacancy.
• While filing ADT-1 for Auditor B: Enter SRN A12345678 (original ADT-1) and Do not enter B87654321 (ADT-3 SRN)

2. AOC-4 Filing Where First Auditor ADT-1 SRN Is Not Available:

MCA Clarification relating to AOC-4, where First Auditor ADT-1 is not available

• If the first auditor's ADT-1 was never filed and no SRN exists, enter Z99999999 in the ADT-1 SRN field while filing AOC-4.
• The MCA issued by MCA addresses another common issue. Problem For many companies: First auditor was appointed by the Board. ADT-1 was not filed for first auditor appointment. And while filing AOC-4, the system asks for ADT-1 SRN. Since no ADT-1 exists, professionals are unable to proceed.
• MCA Solution : If ADT-1 was never filed for the first auditor, and No ADT-1 SRN is available, then while filing AOC-4, enter Z99999999.  in the ADT-1 SRN field. Example  like : ABC Private Limited incorporated in 2024:

• First auditor appointed by Board.
• ADT-1 not filed.
• Now AOC-4 for FY 2025-26 is being filed.

In the ADT-1 SRN field enter Z99999999 and proceed with filing.

Why did MCA issue these clarifications on auditor appointment?

After migration to the new MCA V3 portal, many stakeholders reported:

• Validation errors in ADT-1.
• Rejection of AOC-4 due to missing auditor appointment SRN.
• Confusion regarding use of ADT-3 SRN in casual vacancy cases.

The clarification ensures smooth filing and avoids unnecessary resubmissions.

Common Mistakes in First Auditor vs. Subsequent Auditor Appointment

• Missing the 15-day deadline
• Entering incorrect auditor details
• Using ADT-3 SRN instead of original ADT-1 SRN
• Confusing first auditor and subsequent auditor provisions
• Incorrect tenure details
• Not retaining the SRN acknowledgement

Practical Key Takeaway for Professionals

ADT-1 is the ROC notice of auditor appointment. File within 15 days of the appointment meeting. Keep auditor consent, eligibility certificate, and appointment resolution ready. For casual vacancy, use the original appointment SRN, not the ADT-3 SRN. And for AOC-4, where no first auditor ADT-1 exists, use "Z99999999."

• For Casual Vacancy ADT-1: Use the SRN of Original ADT-1 / 23B / GNL-2 and should never use ADT-3 SRN
• For AOC-4: If no ADT-1 was filed for the first auditor, use Z99999999 as the ADT-1 SRN.
• Before Filing

• Verify original auditor appointment documents.
• Check MCA Master Data and filing history.
• Keep copies of old ADT-1/23B/GNL-2 filings.
• Refer to MCA Annual Filing FAQs where system validation issues arise.

Whenever an auditor resigns and another auditor is appointed against the resulting casual vacancy, preserve copies of both the resignation filing (ADT-3) and the original appointment filing. The MCA system validates the new ADT-1 against the original appointment record, which is the most common reason behind the error message "Enter valid SRN associated with CIN."

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