Auditor Resignation in vadapalani - Filingpoint


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Filingpoint Auditors are taking a tough stance: Stung by the IL&FS fiasco, the Big Four firms have been sticking to strict interpretations of auditing standards. They are also refusing to accept the earlier practice of getting a management representation or legal view on a contentious issue.

The resignation of statutory auditors can have significant consequences for the company, especially if it is not accepted by the board. According to the provisions of the Companies Act, an auditor can resign from his/her office before the expiry of his/her term by giving a written notice in Form ADT-3 to the company.

The notice should be filed with the Registrar within 30 days from the date of receipt of the notice. Upon acceptance of the resignation, the company should immediately appoint another statutory auditor in accordance with the provisions of the Companies Act and rules made thereunder.

For example, if the company fails to appoint a new auditor before the expiry of the period of six months from the date of resignation, it will be liable to pay a penalty of Rs 2 lakh for each day during which it continues to fail to appoint a new auditor.

Investors need to keep a close watch on the developments. Markets tend to react negatively if the resignation is due to governance issues like unsatisfactory response to queries or refusal to share crucial data. For instance, the share price of Manpasand Beverages plunged after Deloitte Haskins & Sells resigned as its auditor.

Contact Filingpoint Auditor Resignation in Vadapalani +91 72999 72500

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