REASONS WHY AUDITORS RESIGN BEFORE THEIR TERM EXPIRY

REASONS WHY AUDITORS RESIGN BEFORE THEIR TERM EXPIRY

RESIGNATION
OF STATUTORY AUDITOR

Section 140(2) of Companies Act, 2013, deals with
resignation of auditor and its related compliance. As per provisions, if any
auditor resigns from the company then he shall file an intimation about its
resignation with RoC and with the company within 30 days from the date of
resignation. Further, in case of Government Company,

FILING FORM ADT-3 BY RESIGNING AUDITOR

In purview of Section 140(2) of the Act, Rule 8 of The
Companies (Audit and Auditors) Rules, 2014 requires auditor to file intimation
about its resignation with RoC in form ADT-3.

Auditor who resigns from his office of auditor of the
company is required to file form ADT-3 within 30 days from the date of his
resignation.  Please note that
responsibility to file ADT-3 lies with auditor not the company. It is
applicable all companies including private limited company.

A record number of 35 auditors have resigned from
NSE-listed firms in the first six months of financial year 2019-20.

MID-TERM CESSATION OF AUDITORS IN NSE LISTED
COMPANIES

CESSATION REASON	2019-2020 April to September
Pre-occupation	11
Resigned without stating reasons	7
Resigned due to Commercial Reasons	3
Reasons due to unsatisfactory responses to queries	3
Non-payment of dues	1

DELOITTE
RESIGNS AS 8K MILES’ STATUTORY AUDITORS, RAISES FRAUD CONCERNS

Deloitte Haskins and Sells has resigned from 8K Miles as
its statutory auditors effective November 15,2019 the company intimated to
stock exchanges.

“Considering the significance and gravity of the matters,
including, inter alia, the concerns relating to revenue recognition, management
override of controls, the material weakness noted in the Company's internal
financial controls over financial reporting, the management imposed scope
limitation on the audit of subsidiaries and providing other information, the
non-receipt of the forensic investigation report, etc. as reported by us in our
Audit Reports containing a disclaimer of opinion on the standalone and
consolidated financial statements of the company for the year ended 31 March,”
Deloitte cited as its reasons for resignation.

PRICE WATERHOUSE
QUITS AS STATUTORY AUDITOR OF GVK POWER

Price Waterhouse Chartered Accountants LLP on 14 August
2020 announced that it has quit as the statutory auditor of GVK Power and
Infrastructure Ltd, alleging that the group was not cooperating in the audit
work for their Mumbai airport operations.

INFIBEAM FIRED ITS
JOINT STATUTORY AUDITOR

Infibeam, the BSE listed company based in Ahmedabad, on 14
June 2019 appraised the Ministry of Corporate Affairs (MCA) of its decision to
sack SRBC and Co as its joint statutory auditor.
This comes about a month after the company alleged that the auditor, part of
the EY network, leaked sensitive information two years back.

PWC RESIGNED AS
RELIANCE CAPITAL AS AUDITOR

On June 14 , 2019 PwC resigned as
Reliance Capital and Reliance Home Finance auditor and shot a letter to MCA
alleging divergence of funds in the group companies. In the letter dated June
11 2019, PwC also alleged that the company also threatened legal action,
impairing the ability of the auditor. The firm also stated in the letter that
it suspected fraud and raised red flags over some transactions involving
Reliance Capital and Reliance Home Finance.

Statutory auditors
resigned by mentioning the real genuine reason transparently –

“FEES INCREASE IS
NOT AGREED BY CLIENT.”

        SHR & CO , Mumbai , an audit firm
resigned as statutory auditor from Gufic Biosciences Private Ltd as auditor of
the company. The reason cited by the auditor is as follows:

We have indicated to the Management that our audit fee is
not commensurate with the time and efforts involved , hence requested to
increase our audit fees which has not been accepted favourably by the
Management. In these circumstances , we are unable to continue to act as the
Statutory Auditor and hence tendered our resignation as Statutory Auditors of
the Company.