But a remedy needs to be found for auditors who are consistently negligent in their duties
Implementing its proposals from its July discussion paper, the Securities Exchange Board of India (SEBI) has issued a circular that aims to discourage auditors of listed companies from abandoning their posts midway, when faced with the task of revealing uncomfortable truths about the financials they are auditing. Auditors of listed firms who put in their papers mid-term will now have to ensure that they present an audit opinion either for the preceding or forthcoming quarter (depending on the time of their resignation). Where they’re unable to continue owing to uncooperative management, the company’s audit committee is expected to intervene. SEBI has also mandated detailed disclosures from resigning auditors on the exact nature of the missing information and its materiality to the finances. These steps will help ensure that stakeholders in listed companies aren’t left groping in the dark when statutory auditors abruptly quit.
via The SEBI diktat on auditor resignations is welcome – The Hindu BusinessLine