Citing time constraints, auditor of Inox Wind - Patankar & Associates - decided to quit as independent auditor of the firm on Friday. The abrupt resignation by the auditor follows a similar trend observed in several companies such as Manpasand Beverages, Atlanta and Vakrangee, among others.
“…Independent Auditors of the company, who were appointed for a period of five years to hold office from the conclusion of 6th Annual General Meeting till 11th AGM, have informed, vide letter dated June 8, 2018, their inability to continue as Independent Auditors of the company due to time constraints caused by other commitments and engagements, with effect from the conclusion of ensuing 9th AGM of the members of the company,” the company informed exchanges in a statement on Friday.
Interestingly, shares of the firm rose 2 percent on Friday to close at Rs 93.
Recently, auditors of major companies have been either red flagging accounts or quitting the firm altogether as well.
The companies that have seen auditors flagging various issues include Jet Airways, L&T's shipbuilding arm, Manpasand Beverages, Vakrangee Ltd and Atlanta Ltd.
Experts believe this trend may get even more prominent going forward with several sectors facing financial difficulties at a broader level and also due to corporate governance related issues at individual levels.
Market voices believe the recent move by auditors could also be due to regulatory glare on them that requires the audit community to show responsibility to broader stakeholders and not just the corporate clients. Among others, auditors of Jet Airways, L&T Shipbuilding and Reliance Naval and Engineering raised doubt whether these companies can continue as a "going concern".
Price Waterhouse quit the audit mandate of technology firm Vakrangee due to the company not providing "adequate and relevant information and explanations regarding the company's election books, bullion and jewellery businesses".
Besides, it withdrew from the auditing engagements of construction and infrastructure company Atlanta as the firm allegedly did not share details of an ongoing income tax investigation and the resignation of an independent director.
Auditing major Deloitte Haskins & Sells resigned as statutory auditors of Manpasand Beverages as the fruit juice maker failed to provide them with "significant information" on the financial results for the year ended March 31, 2018.
The new Companies Act, 2013 contains elaborate provisions regarding liability of statutory auditors in case auditor has contravened the provisions knowingly or wilfully with the intention to deceive the company or its shareholders or creditors or tax authorities.
(With inputs from PTI)
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