Corporate and Other LawsMCQQuestion 12534 of 300
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Under Section 139(2) of the Companies Act, 2013, an audit firm shall not be appointed or re-appointed as auditor in a listed company for more than:

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option C — Two terms of 5 consecutive years each

All Options:

  • AContinuous term subject to annual AGM approval
  • BTwo terms of 3 consecutive years each
  • CTwo terms of 5 consecutive years each ✓
  • DOne term of 5 consecutive years

Detailed Solution & Explanation

Correct Answer: Option **C** (Two terms of 5 consecutive years each) **Statutory Provision (Section 139 - Rotation of Auditors):** Section 139(2)(b) specifies that an audit firm cannot be appointed for more than two terms of five consecutive years and requires a cooling-off period of five years thereafter. Therefore, Option C is the correct legal position.

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