Board Resolution Format for Resignation of Auditor

SOP-LEG-042: Formal Resignation of Statutory Auditor

1. Document Control Block

• Document ID: SOP-LEG-042-REV.A
• Effective Date: 2023-10-27
• Version: 1.0.0
• Review Cadence: Annual (or upon change in jurisdictional Corporate Law)
• Target Audience: Board Secretariat, Legal Counsel, Compliance Department, CFO.

2. Executive Summary & Scope

This procedure mandates the clinical execution of a Board Resolution for the resignation of a statutory auditor. It ensures adherence to jurisdictional regulatory requirements (e.g., Companies Act, SEC filing standards) and maintains governance integrity. The scope is limited to the drafting, board approval, and immediate post-resolution regulatory disclosure.

3. Prerequisites & Tool Requirements

• Digital Infrastructure: Secure Board Portal (e.g., Diligent, Nasdaq Boardvantage).
• Credentialing: Access to digital signature platform (e.g., DocuSign/Adobe Sign) with verified Legal Counsel credentials.
• Regulatory Access: Filing credentials for the relevant Stock Exchange and Registrar of Companies (ROC).
• Documentation: Drafted Form ADT-3 (or equivalent), Resignation Letter from Auditor, Board Minutes Template.

4. Roles & Responsibilities (RACI Matrix)

5. Step-by-Step Operational Procedure

Phase I: Preparation & Validation

• Receive written resignation letter from the Auditor (ensure Reason for Resignation is clearly stated per statutory requirements).
• Conduct a due diligence check on the Auditor’s resignation to confirm no outstanding litigation or undisclosed conflict.
• Draft the Board Resolution text citing the specific section of the governing Corporate Act (e.g., Section 140(2)).

Phase II: Board Approval Process

• Circulate the draft resolution to the Board of Directors via the secure Board Portal at least 48 hours prior to voting.
• Convene the Board Meeting (or execute via Circular Resolution if permitted by Bylaws).
• Record the formal resolution in the Minutes of the Meeting, ensuring the date of resignation and the effective date are explicitly captured.

Phase III: Execution & Filing

• Secure the Chair’s signature on the Board Minutes and the Resolution excerpt.
• Draft and sign the official Intimation/Notice to the Registrar of Companies/Regulatory Body.
• File the resignation disclosure (Form ADT-3 or local equivalent) within the statutory 30-day window.

6. Quality Assurance & Verification Criteria

• Compliance Audit: Verify that the "Reason for Resignation" provided in the resolution matches the Auditor's letter verbatim.
• Timestamp Accuracy: Ensure the filing date does not exceed the statutory deadline; failure here is a zero-tolerance deviation.
• Signatory Verification: Cross-reference signatory authority against the current Board Delegation of Authority matrix.

7. Practical Troubleshooting Scenarios

Scenario 1: Auditor fails to provide "Reason for Resignation" in writing.

• Protocol: Immediate suspension of filing. Issue a formal "Request for Information" (RFI) to the Auditor. Do not proceed to Board Resolution until full disclosure is received, as incomplete filings attract heavy administrative penalties.

Scenario 2: Discrepancy between Board Minutes and submitted Regulatory Filing.

• Protocol: Immediate submission of a "Corrigendum" to the regulatory body. Perform an internal audit to identify the breakdown in the Secretariat process. Document as a "Process Deviation" in the Annual Compliance Report.

Scenario 3: Auditor Resignation during audit engagement leading to financial uncertainty.

• Protocol: Trigger the "Urgent Disclosure" protocol. Notify the Audit Committee immediately. Issue an emergency press release regarding the auditor change to prevent market volatility and ensure transparency.

Approved by: Julian Vance Chief Operations Architect Template Registry