Forensic Red Flags: Auditor Resignations & Secretarial Qualifications
A sudden statutory auditor resignation during the middle of a fiscal year is historically the sharpest warning sign of aggressive accounting or governance failure.
The SEBI Circular on Auditor Resignations
Auditors cannot walk away without issuing required quarterly audit reviews.
The resigning auditor must submit a detailed Annexure A disclosure to exchanges.
✓ Forensic Investor Checklist Before Trading
01.
Inspect Annexure A of the resignation filing for mentions of scope limitation.
02.
Verify if the Audit Committee conducted an exit interview.
Conclusion
When an auditor resigns abruptly, prudent risk management demands swift reassessment of exposure.