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Easiest Steps for Resignation of an Auditor
Easiest Steps for Resignation of an Auditor
Why should an auditor resign from the services of a company? There can be numerous reasons for an auditor to resign. Some of them can be illness, dispute with client, inability to continue audit because of surpassing the ceiling on the number of audits and so on and so forth. So, how does an auditor resign from the services of a company?
For resignation, auditor as well as the company has to perform certain duties. Such duties are elucidated below.
So, let’s talk about them in details. I have segregated the duties of auditor and of the company for easy understanding and convenience
Duties of auditor:
First of all, the auditor submits the resignation to the company. And, within 30 days from the date of sending such resignation, the auditor should intimate the ROC about such resignation by filing Form ADT-3.
Duties of the company:
Step 1: Once the resignation is received by the Company secretary, a board meeting is called up for “Acceptance of Resignation of Auditor”
Step 2: In the board meeting, the company then, shall fill the casual vacancy which arose due to the resignation by appointing some other auditor. A sample board resolution for acceptance of resignation and filling up of casual vacancy is available from this link
Step 3: In the board meeting, the company approves for calling an EGM. This approval can be made in the same meeting or any of subsequent meetings.
Step 3: Hold EGM and approve the resignation of the previous auditor and appoint a new one.
For detailed information on the filling up of casual vacancy, terms and tenure of the services of such auditor and more, feel free to check out my next article.
References:
Applicable section :140(2) of the companies act, 2013
Applicable rules: rule 8 of the Companies (Audit and Auditor) Rules, 2014
Chiranjibi Chapagain
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