Credit Risk

Resignations by Auditors of Listed Companies Spike in Sep’20 Quarter

Resignations by auditors of listed companies soared 43% during the quarter ended September 2020 on a year-on-year basis, Amukha’s analysis of corporate disclosures has revealed. The number of auditor resignations jumped to 87 in the quarter ended September 2020 from 61 in the same period last year.

However, in the first 9-months of the calendar year 2020, the number of auditor resignations dropped 10% to 113 compared with the same period last year.

In our view, an auditor’s resignation before completion of tenure is a potential red-flag for the lenders. There are a variety of reasons for auditor resignations. The most common reasons for auditor resignations are Personal; Commercial (Audit Fees); Health; Pre-occupation in Other Assignment; Lack of Required Information, etc. Hence, a closure look is warranted to understand the underlying reasons for an Auditor’s Resignation to decide if it is a Red-Flag or not.

Amukha’s innovative early warning application – Risk Analytics System (RAS) spots auditor resignations and uncovers adverse comments. Here, we highlight top 10 companies witnessing two Auditor Resignations post-December 2018.

If you were unable to spot red-flags related to auditor resignations, Amukha’s RAS is here to help you!

RAS is an innovative application that provides early warning signals by analyzing traditional and alternative datasets for identifying distress sectors and companies ahead of time.

To know more about RAS, email us at info@amukha.com.

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