Proposed Norms for Resignation of Statutory Auditors

SEBI, on July 18, 2019, has issued a consultation paper on Policy Proposals with respect to Resignation of Statutory Auditors from Listed Entities. The paper proposes conditions to enhance responsible behaviour of auditors and ensure completion of ongoing obligations by resigning auditors. Following are the key proposals:

i.       For listed entities, auditor will be required to sign the audit report of a financial year before resignation, in case the auditor has signed the audit report for all quarters except the last quarter in that financial year. In all other cases, the auditor to provide a limited review or audit report for the quarter in which the auditor resigns; and

ii.      For material unlisted subsidiaries of listed entities, auditor to issue limited review or audit report for the previous quarter/ financial year, as applicable, before resignation.

In addition, the consultation paper inter alia proposes certain procedures for strengthening the role of the audit committee and also prescribes a format for the resignation letter by a statutory auditor.

Published In:Inter Alia - Quarterly Edition - September 2019 [ English
Date: September 30, 2019