ICAI Implementation Guide on Resignation / Withdrawal from an Engagement to Perform Audit of Financial Statements
The ASB of the Institute of Chartered Accountants of India has released an “Implementation Guide on Resignation/Withdrawal from an Engagement to Perform Audit of Financial Statements”.
The said Implementation Guide is applicable in case of audits of all listed entities. It has been stated that in case of audits of banks, insurance companies and other corporate entities, the Implementation Guide is to be also followed, as applicable.
As per the ASB, large number of mid-term resignations by auditors in the year 2018 this year was a matter of concern for various stakeholders. In view of such large resignations by the auditors, particularly of listed companies, a Group was constituted by the ICAI to examine the reasons and circumstances leading to resignations and issue guidance on the matter.
As evident, the said Implementation Guide aims to provide guidance to auditors in case of resignation/ withdrawal from an engagement to perform audit of financial statements.
This Implementation Guide lays down the guidance on circumstances leading to withdrawal or resignation from an existing engagement and auditor’s responsibilities and professional obligations to be complied with.
The Implementation Guide fives valuable guidance to the auditors on:
(a) Circumstances Leading to Withdrawal/Resignation
(b) Resignation/Withdrawal from an Existing Engagement
(c) Auditor’s Responsibilities on resignation
(d) Professional Obligation to respond to communication from the incoming auditor.
(e) Documentation Obligations