Auditor rotation
ESG & GovernanceThe rule that limits how long the same auditor can audit a company.
Under Section 139(2) of the Companies Act, a listed company cannot appoint an individual as auditor for more than one five-year term, or an audit firm for more than two five-year terms in a row. After that, a five-year cooling-off period applies. The aim is to keep auditors independent. A change of auditor at the end of a term is normal; a resignation in the middle of a term is the signal to check.
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