1.

Effective from

immediate effect i.e. 18-Oct-2019

2.

Limited review/ audit report in case of resignation of Auditor

• If the auditor resigns within 45 days from the end of a quarter of a FY ⟶ the auditor shall, before such resignation, issue the limited review/ audit report for such quarter
• If the auditor resigns after 45 days from the end of a quarter of a FY ⟶ the auditor shall, before such resignation, issue the limited review/ audit report for such quarter as well as the next quarter
• if the auditor has signed the limited review/ audit report for the first 3 quarters of a FY ⟶ the auditor shall, before such resignation, issue the limited review/ audit report for the last quarter of such FY as well as the audit report for such FY

3.

Reporting of concerns by the Auditor w.r.t. the listed entity/its material subsidiary to the Audit Committee

• In case of any concern with the management of the listed entity/material subsidiary such as non-availability of information / non-cooperation by the management which may hamper the audit process ⟶ the auditor shall approach the Chairman of AC of the listed entity and
  • the AC shall receive such concern directly and immediately without specifically waiting for the quarterly AC meetings

4.

Auditor proposing to resign

• In case the auditor proposes to resign ⟶ all concerns with respect to the proposed resignation, along with relevant documents shall be brought to the notice of the AC
  • In cases where the proposed resignation is due to non-receipt of information / explanation from the Co ⟶ the auditor shall inform the AC of the details of information / explanation sought and not provided by the management, as applicable
• On receipt of such information from the auditor relating to the proposal to resign as mentioned above ⟶ the AC / BoD, as the case may be, shall deliberate on the matter and communicate its views to the management and the auditor

5.

Disclaimer in the audit report in case of non-receipt of information

• In case the listed entity/ its material subsidiary does not provide information required by the auditor ⟶ to that extent, the auditor shall provide an appropriate disclaimer in the audit report, which may be in accordance with the Standards of Auditing as specified by ICAI / NFRA.

6.

Terms of appointment of the statutory auditor of the listed entity/ material subsidiary

• The listed entity/ material subsidiary shall ensure that the conditions as mentioned above are included in the terms of appointment of the statutory auditor at the time of appointing/re-appointing the auditor.
  • In case the auditor has already been appointed ⟶ the terms of appointment shall be suitably modified to give effect to the points mentioned at 1 to 3 above.
• The practicing CS shall certify compliance by a listed entity with the points mentioned at 1 to 3 above. In the annual secretarial compliance report issued in terms of SEBI Circular no. CIR/CFD/CMD1/27/2019 dated February 08, 2019

7.

Information to be obtained from the statutory auditor upon resignation

• Upon resignation, the listed entity / its material subsidiary shall obtain information from the Auditor in the format as specified in Annexure A to the captioned Circular.
• The listed entity shall ensure disclosure of the same under Sub-clause (7A) of Clause A in Part A of Schedule III under Regulation 30(2) of SEBI LODR Regulations

8.

Co-operation by listed entity and its material subsidiary

• During the period from when the auditor proposes to resign till the auditor submits the report for such quarter / FY as specified above ⟶ the listed entity and its material subsidiaries shall continue to provide all such documents/information as may be necessary for the audit / limited review

9.

Disclosure of Audit Committee’s views to the Stock Exchanges

• Upon resignation of the auditor, the AC shall
  • deliberate upon all the concerns raised by the auditor with respect to its resignation as soon as possible, but not later than the date of the next AC meeting and
  • communicate its views to the management.
• The listed entity shall ensure the disclosure of the AC’s views to the stock exchanges as soon as possible but not later than 24 hours after the date of such AC meeting.

10.

Compliance with this SEBI circular by an entity not mandated to have AC

• In case an entity is not mandated to have an AC⟶the BoD of the entity shall ensure compliance of this circular

11.

Non-applicability of this SEBI circular

• In case the auditor is rendered disqualified due to operation of any condition mentioned in S. 141 of the Co Act 2013 ⟶ the provisions of this Circular shall not apply