Removal of an auditor before expiry of term requires:
ASpecial resolution AND prior approval of the Central Government (Section 140(1))
BSimple majority of board only
CApproval of the auditor's relatives
DPermission of SEBI
Answer & Solution
Correct answer: B. Simple majority of board only
1. Section 140(1) requires special resolution + Central Government approval for premature removal.
2. This prevents intimidation of independent auditors.
3. Form ADT-2 must be filed within 30 days.
_Source: ICAI BoS CA Final Paper 3, Ch 5 "Company Audit"_
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