Resignation Of Auditor

Introduction

Auditor Resignation with Ease with CorpIQ

At CorpIQ, we understand that an auditor's resignation can be an unexpected event, requiring prompt and precise action to maintain regulatory compliance and financial integrity. Our specialized team of Chartered Accountants, Company Secretaries, and Lawyers provides comprehensive support to manage the resignation of auditors in accordance with the Companies Act, 2013.

HOW CORPIQ SUPPORTS THROUGH AN AUDITOR RESIGNATION:

- Immediate Response: As soon as an auditor resignation is on the horizon, CorpIQ is ready to assist. We offer immediate guidance on the necessary steps and help in managing the communication between all parties.

- Documentation and Filing: We ensure the preparation and filing of Form ADT-3 with the ROC within the stipulated 30-day period. Our experts also assist in drafting the board resolution to acknowledge the resignation.

- Regulatory Compliance: CorpIQ guarantees that all procedures are strictly in line with the relevant sections of the Companies Act, mitigating any potential legal issues or non-compliance penalties.

- Seamless Transition: Our services extend to facilitating the appointment of a new auditor, ensuring there are no gaps in your financial oversight.

- Advisory Services: Should there be any disputes or disagreements leading to the auditor's resignation, we offer advisory services to navigate these complex situations delicately and professionally.

With CorpIQ, rest assured that the resignation of your auditor is managed with professionalism and attention to detail, allowing you to focus on continuing your business operations without interruption.

LEGAL SIDE OF AUDITOR RESIGNATION:

As per the provisions of the Companies Act, 2013 ("Act"), every company must appoint a qualified auditor to keep its books of accounts. Therefore, it is essential that the company appoints an auditor at its first AGM to prepare the audit reports for the company.

If an auditor does not wish to continue in the company for any reason, he may resign from it by giving a resignation letter to the company. While resigning from the company, auditors must follow the provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 as amended.

A resignation of an auditor is permitted under section 140(2) of the Act. It states that an auditor must notify the Registrar of his resignation within thirty days of his resignation, as provided in the Rules. If a company is a Government Company or is a Government owned company, the auditor must file his statement with the Comptroller and Auditor-General of India.

FEATURES:

• Auditor is required by law to inform the Registrar of their resignation in writing. Failure to do so will result in penalties under the Act.
• It is the auditor's responsibility to include in his statement his reasons for resigning as well as any other relevant facts related to his resignation.
• A penalty of Rs 50,000 or his remuneration, whichever is less, will apply if the auditor does not file his resignation statement.
• If the auditor continues to fail, he or she shall be liable to a further penalty of five hundred rupees per day, up to a maximum of five lakh rupees.

 DOCUMENTS REQUIRED:

Resigning auditors are required to complete Form ADT-3 with the following information:

• Corporate Identification Number
• Company name, registered address, and email address.
• Whether the auditor is an individual or a firm.
• Auditors' or Auditors' firms' Income tax PAN.
• Auditors/Auditors' firms' membership number.
• Information about the Auditor/Auditor's firm, including address, city, state, pin code, and e-mail address.
• Resignation reasons and any other relevant facts.
• A digital signature must be affixed to the form by the Auditor. The auditor must attach the resignation letter with this form.

 PROCEDURE:

• After resigning from the company, an auditor should file Form ADT-3 to the Registrar to notify the Registrar of his resignation.
• You can file Form ADT-3 online via the Ministry of Corporate Affairs ("MCA") website, or you can give it to the Registrar by hand or by mail.
• In order to effect the resignation of the auditor, a board meeting shall be organized with all the directors after he submits his resignation and Form ADT-3.
• As per the provisions of the Act and Rules, the company must appoint a new auditor to replace the resigned auditor.
• The company can also appoint a casual auditor within three months to fill the vacancy, and such an auditor will hold the post until the next annual general meeting.
• At the next annual general meeting, the company will appoint a new auditor after the resignation of the auditor.
• After the resignation of an auditor in a government company, the Comptroller and Auditor-General of India will appoint an auditor.