An auditor plays a critical role in ensuring a company’s financial transparency and compliance with regulatory requirements. However, an auditor may resign due to various reasons such as personal constraints, professional conflicts, non-cooperation from management, or ethical concerns. Mandates a proper resignation process to maintain corporate governance and legal compliance.

The resignation process begins with the auditor submitting a resignation letter to the company’s board of directors, specifying the reason for stepping down. Following this, the auditor must file Form ADT-3 with the Registrar of Companies (ROC) within 30 days of resignation to officially notify the authorities. Failure to file this form may lead to penalties under the Act.

Once the company receives the resignation letter, it must take immediate steps to appoint a new auditor. If the resignation occurs before the auditor’s term ends, the board must fill the vacancy within 30 days. In the case of a listed company or a company with an audit committee, the resignation details must also be disclosed to stock exchanges and stakeholders. Additionally, the board should record the resignation in its next general meeting and update the statutory registers accordingly.

The outgoing auditor is required to ensure a smooth transition by handing over necessary documents and reports to the new auditor. If the resignation is due to professional misconduct or significant financial irregularities, the auditor may also report the matter to regulatory bodies like the Institute of Chartered Accountants of India (ICAI).

A properly documented auditor resignation ensures transparency, prevents regulatory complications, and safeguards the company’s compliance status. Seeking professional assistance from a Company Secretary (CS) or Chartered Accountant (CA) can help companies and auditors navigate the process smoothly while adhering to legal obligations.