Bombay Public Trust Act 1950
edgar sylva
(Querist) 13 November 2009
This query is : Resolved
I was a Trustee of a 108 year old Trust till I demitted office in 2007.
At the AGM of 2008 (Sept 08) the members reappointed a firm as Auditors for the 2008/09 accounts.
They had been doing the audit for nearly 4 months but suddenly on 26 Oct they have resigned without completing the audit.
Is this legal; can they just walk out like this when appointed by the General Body.
( members think they found out something wrong and did not get proper answers from the present Trustees, so they resigned).
ppboy
Raj Kumar Makkad
(Expert) 13 November 2009
You will have to go in depth the terms and conditions fixed between the auditor and the trust. If any provision of damage lies there, you can adopt that term otherwise any professional firm can deny to continue if the things are not found favourable to it or there may be some other reasons leading to its resign.
niranjan
(Expert) 13 November 2009
I agree with Makkadsir.If that firm ispaid in advance its fees, trust can sue him and if other firm is engaged for the same or remaining work and the trust have to pay more,trust can recover damage fr0m the firm.
A V Vishal
(Expert) 13 November 2009
According to ICAI guidelines if due to some valid reasons the auditor feels that the continuation of audit is not justified and in the best interests of the client, for a number of reasons be it concerning the independence, integrity or code of ethics of ICAI, then the auditor can resign in the best interests of the organization. However, in your query you have not mentioned the reasons cited by the CA in his resignation letter.
edgar sylva
(Querist) 13 November 2009
Thank you Mr Vishal; the wordings of their resignation letter states
"in view of the various circumstances & the responses to our queries from your end we regret it wil not be possible to express an opinion on the financial statement for the financial year 2008/09. And hence shall not be able to continue as Auditors for 2008/09.
We therefore resign with effect from 26.10.09"
ppboy
