If a casual vacancy in the office of auditor arises by his resignation it should only be filled by the company in a……..

 Options:

a) Board meeting b) extraordinary general meeting c) General meeting d) annual general meeting

The Correct Answer Is:

c) General meeting

Correct Answer Explanation: c) General Meeting

When a casual vacancy in the office of an auditor arises due to resignation, it should be filled by the company in a general meeting. This process is outlined in Section 139(8) of the Companies Act, 2013.

A general meeting is a gathering of shareholders, and it is the most suitable platform for such a decision. Here, shareholders, who are the owners of the company, have the authority to make decisions on important matters like appointing auditors.

In a general meeting, shareholders discuss and vote on various company matters, including the appointment or removal of auditors. This democratic process ensures transparency and accountability in the company’s operations.

Shareholders, who are the ultimate stakeholders, have the right to voice their opinions and collectively decide on the appointment of an auditor.

Why Other Options Are Incorrect:

a) Board Meeting –

A board meeting is a gathering of a company’s board of directors to discuss and make decisions on various matters related to the company’s operations. The board of directors is typically composed of appointed or elected individuals responsible for overseeing the company’s activities.

While the board holds significant decision-making power. The appointment of an auditor is generally considered a decision that requires the input of the shareholders. This is because auditors play a crucial role in safeguarding the interests of the shareholders. By ensuring the accuracy and reliability of financial statements.

b) Extraordinary General Meeting (EGM) –

A board meeting is a gathering of a company’s board of directors to discuss and make decisions on various matters related to the company’s operations. The board of directors is typically composed of appointed or elected individuals responsible for overseeing the company’s activities.

While the board holds significant decision-making power. The appointment of an auditor is generally considered a decision that requires the input of the shareholders. This is because auditors play a crucial role in safeguarding the interests of the shareholders by ensuring the accuracy and reliability of financial statements.

d) Annual General Meeting (AGM) –

An Annual General Meeting (AGM) is a mandatory yearly gathering of a company’s shareholders. During the AGM, various routine matters are discussed. Including the presentation of financial reports, the election of directors, and the declaration of dividends.

While the appointment of an auditor is undoubtedly a crucial decision. It may not always align with the schedule of the AGM. Waiting until the AGM to fill a casual vacancy in the office of auditor might leave a significant gap in the company’s oversight. Which will  potentially affecting the accuracy and integrity of financial reporting.

In summary, appointing an auditor is a decision that directly affects the shareholders, making a general meeting the most appropriate forum for this purpose. This ensures that the decision is made collectively, promoting transparency and accountability within the company.

While all of these meetings serve important functions within a company, appointing an auditor is a decision that directly impacts the shareholders.

Therefore, it is crucial for shareholders to have a say in the appointment of auditors, as they play a critical role in ensuring the financial integrity and credibility of the company. This is why a general meeting is the most appropriate forum for making such a decision.

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