{"id":26071,"date":"2019-10-31T16:17:36","date_gmt":"2019-10-31T10:47:36","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=26071"},"modified":"2019-11-25T12:24:15","modified_gmt":"2019-11-25T06:54:15","slug":"sebi-to-regulate-abrupt-resignation-of-auditors","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/sebi-to-regulate-abrupt-resignation-of-auditors\/","title":{"rendered":"SEBI to Take Firm Steps Against Abrupt Resignation of Auditors"},"content":{"rendered":"

To curb abrupt resignation of auditors, new SEBI norms made it mandatory for auditors of listed companies to issue an audit report even if they resign<\/em><\/strong><\/p>\n\n\n\n

SEBI has brought strict rules and regulations into\neffect against the auditors resigning from listed companies. From now on\nAuditors will have to give a detailed explanation of their resignation to stock\nexchange at the earliest. Resignation of an Auditor before completion of the audit\nof financial results for the year seriously affects the confidence of\ninvestors.<\/p>\n\n\n\n

As per SEBI<\/strong>[1]<\/a><\/sup>, an auditor will have to provide a limited or complete audit report for the quarter during which it resigns. Furthermore, if the auditor signs audit report for all the quarters of the financial year, except for the last quarter, then the auditor will have to finalize the audit report for the entire financial year. <\/p>\n\n\n\n

Also, Read:<\/b> SEBI Proposed Strict Norms for Disclosure of Auditors of Listed Companies<\/a><\/mark>.<\/p><\/div>\n\n\n\n

In a situation where the listed company refuses to provide the required information, the auditor should give a proper disclaimer in the audit report. In another case, if the management of the company obstructs the audit process, the auditor needs to speak to the chairman of the audit committee of the Company.<\/p>\n\n\n\n

Abrupt resignations of auditors hamper the confidence of investors. Investors are left with no accurate details about their monetary decisions. In the past years, the sudden resignation of statutory auditors in the listed companies has gone up. <\/p>\n\n\n\n

SEBI had a close look at this matter and, therefore decided to take strict actions against the defaulters. According to data provided by NSE Infobase the year 2018, saw mid-term resignation of 48 auditors and another 16 so far this year.<\/p>\n\n\n\n

New guidelines to curb abrupt resignation of auditors by SEBI<\/h2>\n\n\n\n