According to Rule 3(7) of the Companies (Audit and Auditors) Rule 2014 explains that in case the appointment is not ratified by the members of the company, the Board of Directors shall appoint another individual or firm as its auditor or auds after following the procedure laid down in this behalf under the Act.
Therefore, if a company satisfies the criterion of turnover although it does not satisfy the criterion of net profit, it will have to comply with the provisions of Section 135 and the Companies (CSR Policy) Rules, 2014.
Auditor – An auditor is a person or a firm appointed by a company to execute an audit. To act as an auditor, a person should be certified by the regulatory authority of accounting and auditing or possess certain specified qualifications.
Generally, to act as an external auditor of the company, a person should have a certificate of practice from the regulatory authority.
Types of Auditor – 1. External Auditor 2. Internal Auditor