A CA firm can become the official auditor of a PSU under Section 139 (5) and 139 (7) of the Companies Act 2013. The CAG is the official organisation that appoints such firms with the Institute of Chartered Accountants of India (ICAI).

CA firms need to have a full-time Fellow Chartered Accountant (FCA) to become eligible for this position. A full-time FCA must not practise in another firm or have a practice in his/her name, be employed as a partner in other firms, be a full-time or part-time employee in a company, and have total compensation and share from it below the prescribed limit.
The CAG selects CA firms as per two categories – one with audit fees up to Rs. 1.5 Lakh and one with audit fees exceeding Rs. 1.5 Lakh.
Selection of CA firms with audit fees up to Rs. 1.5 Lakh is based on points. Points are calculated on the number of full-time FCA/ACA partners, the number of CA employees, the total association of the partners with the firm, CISA/ISA certification of partners, etc.
Selection of CA firms with audit fees more than Rs. 1.5 Lakh is based on several criteria. The firm needs to have a vintage of at least 10 years, employ at least 6 CAs of whom 5 must be full-time members; at least 1 CA must be a partner for at 10 years or more, etc.
Ensuring that you follow a step by step guide to starting a CA firm and get selected as an auditor for PSUs the future.
Getting CA loan may help firms to grow their business and partners. This can further aid them to apply for the above position.