Introduction It’s for the primary time, the Firms Act, 2013 (2013 Act) has introduced within the idea of rotation of auditors so as to strengthen the position of independence of an auditor and to extend the credibility of the monetary statements of an organization. The audit of accounts of an organization is a vital operate because the authenticity and correctness together with true and honest view of the accounts are stamped by the Auditors and thus the independence of an auditor takes priority on which the very premise of any audit is performed and concluded. It’s for this goal, the provisions referring to rotation of auditors was included within the Firms Act, 2013. It isn’t unusual to see with respect to sure provisions of the Act, when launched, faces divergent views or turns into a contentious problem. The provisions referring to rotation of Auditor isn’t any completely different and comprises sure provisions that are ambiguous. This text highlights the nuances in interpretation of the transitional provisions of rotation of auditor, its interpretation and an acceptable answer to the identical. Problem in short Presently, a lot of the firms are involved concerning the interpretation of the transitional provisions referring to rotation of Auditors, as as to if the auditors, who’ve already been the auditors of the corporate for a couple of or two phrases of 5 years, because the case could also be, are required to be modified within the Annual Basic Assembly (AGM) to be held on or earlier than September 30, 2016 (AGM due date for F.Y.2015-16) or the current auditors may be continued for yet one more 12 months, that’s, upto AGM to be held on or earlier than September 30, 2017 (AGM for F.Y. 2016-17). If we analyse and have a look at the provisions referring to rotation of auditors, defintely confusion prevails of their appointment resulting from interpretation of transitional provisions. Provisions beneath the Firms Act, 2013 referring to appointment of Auditors Part 139 of the 2013 Act offers with appointment of auditors. Part 139(1), inter alia, requires a Firm to nominate auditor on the first AGM to carry workplace from the conclusion of that AGM until the conclusion of its sixth AGM and thereafter, until the conclusion of each sixth AGM. Part 139(2) supplies for necessary rotation of the auditors in case of all listed and different prescribed class of firms. If we see the provisions of rotation of auditors, the appointment of 1 time period of 5 consecutive years for a person as auditor or two phrases of 5 consecutive years every for a agency as auditor is supplied. The third proviso to part 139(2) supplies for a transition interval, that’s, the businesses present on/earlier than the graduation of the 2013 Act (2013 Act got here into existence w.e.f. April 1, 2014), that are required to adjust to such rotation are required to take action ‘inside three years from the date of graduation of the 2013 Act.” Interpretation of the provisions Pursuant to the provisions of Part 139(2), the difficulty that arises is whether or not the transition interval for rotation is to be counted from the date of graduation of the 2013 Act, i.e. April 1, 2014, or from the date of conclusion of AGM held after the graduation of the Firms Act, 2013, i.e. the AGM held in 2014 often on or earlier than 30th September, 2014.