Can an auditor resign at any point during the year?

Yes, at any time. ADT-3 must be filed within 30 days; the company must appoint a replacement within 30 days and file ADT-1 within 15 days of the Board appointment.

What must ADT-3's statement of reasons contain?

Reasons for resignation, any matters affecting the company's accounts, any irregularities or fraud observed during audit work, and anything that should be brought to shareholders' or ROC's attention.

Can the same resigning firm be reappointed as the replacement?

No. The resigning auditor's firm cannot be appointed as the replacement in the same casual vacancy they created.

Auditor Resignation Services – ADT-3 Filing Under Companies Act 2013 | NDS Avla

Auditor Resignation Services – ADT-3 Filing & Replacement Auditor Appointment

Complete Auditor Resignation Compliance Under Section 140 of the Companies Act 2013 — ADT-3 Filing, Statement of Reasons, Board Replacement, and ADT-1 for New Auditor

An auditor who resigns from their appointment as statutory auditor of a company must comply with a specific statutory procedure under Section 140(2) of the Companies Act 2013 — they cannot simply send a resignation letter and walk away. Within 30 days of resignation, the resigning auditor must file Form ADT-3 with the Registrar of Companies — and simultaneously send a copy to the company — containing a statement of reasons for resignation and any facts or circumstances that may affect the company's audit. This "statement of reasons" is designed to alert regulators to potential governance or fraud concerns at the company.

From the company's side, when an auditor resigns, the Board must fill the casual vacancy by appointing a replacement auditor within 30 days under Section 139(8). The replacement appointment must be ratified by shareholders at the next general meeting, and Form ADT-1 must be filed for the replacement auditor within 15 days of the Board appointment. Our team assists both the resigning auditor and the company with all aspects of this compliance sequence.

Our Auditor Resignation Services

ADT-3 Preparation (For Auditors)

Drafting the resignation statement for the resigning auditor — including the statement of reasons, disclosure of any concerns about the company's governance, audit methodology, or records, and the effective date of resignation — ready for ADT-3 filing.

ADT-3 E-Filing

Filing Form ADT-3 on the MCA21 portal within 30 days of the resignation date — with the resignation letter and statement of reasons — on behalf of the resigning CA firm or individual auditor.

Replacement Auditor Identification

Assisting the company in identifying a replacement auditor quickly — verifying the replacement auditor's eligibility under Section 141, independence, and ceiling limit compliance — to ensure the Board can make the casual vacancy appointment within 30 days.

Board Resolution for Replacement

Drafting the Board Resolution appointing the replacement auditor for the remainder of the resigned auditor's term — with the new auditor's consent and eligibility certificate included as attachments.

ADT-1 for Replacement Auditor

Filing Form ADT-1 within 15 days of the Board appointment of the replacement auditor — completing the company's compliance cycle arising from the auditor's resignation.

Shareholder Ratification Management

Managing the ratification of the replacement auditor's appointment at the next general meeting — EGM or AGM (whichever comes first) — with resolution drafting and post-meeting ADT-1 confirmation as required.

Auditor Resignation — Compliance Timeline

Action	Responsible Party	Deadline
Resignation letter to company	Resigning auditor	Per notice period in appointment terms
ADT-3 filing with ROC + copy to company	Resigning auditor	Within 30 days of resignation
Board appointment of replacement auditor	Board of Directors	Within 30 days of vacancy arising
ADT-1 for replacement auditor	Company	Within 15 days of Board appointment
Shareholder ratification of replacement	Shareholders at next AGM/EGM	At next general meeting

⚠️ If the resigning auditor does NOT file ADT-3 within 30 days, the auditor is personally liable to a penalty of ₹50,000 or an amount equal to remuneration of the auditor — whichever is less. The MCA takes non-filing of ADT-3 seriously, particularly where the resignation may signal undisclosed irregularities at the company.

Frequently Asked Questions

Can an auditor resign at any point during the audit year?

An auditor can resign from their appointment at any time during their term — there is no legal restriction on the timing of resignation. However, resigning mid-audit (after commencing but before completing the annual audit) creates practical and professional complications — incomplete audit files, potential audit qualification issues, and ICAI ethical considerations. The incoming replacement auditor must also be familiar with the work done by the outgoing auditor. Despite these practical challenges, the statutory procedure (ADT-3 by the resigning auditor within 30 days; replacement appointment by the Board within 30 days) applies regardless of when during the year the resignation occurs.

What must the ADT-3 "statement of reasons" contain?

The statement of reasons in ADT-3 must disclose: the reasons for resignation, including any professional or business-related grounds; any matters relating to the company's affairs that the auditor believes should be brought to the attention of shareholders or the ROC; any matters that may have a bearing on the company's audited financial statements; and whether there are any instances of irregularity, fraud, or misconduct that came to the auditor's attention during the course of audit work. This disclosure obligation is designed to ensure that auditors cannot resign silently while aware of significant irregularities — making ADT-3 a key transparency mechanism in the Companies Act framework.

Can the Board appoint any CA as replacement, or are there restrictions?

The replacement auditor appointed by the Board to fill the casual vacancy must satisfy all Section 141 eligibility conditions — same as any auditor appointment. Additionally, Section 139(8) provides that in a casual vacancy caused by resignation, the replacement auditor appointed by the Board holds office only until the conclusion of the next general meeting (where shareholders ratify or change the appointment). The resigning auditor's firm cannot be reappointed as the replacement in the same casual vacancy they created — this would undermine the independence rationale for the resignation process.

Auditor Resigning? Handle ADT-3 and Replacement Compliance in Full.

Whether you are the resigning auditor (needing ADT-3 filed within 30 days) or the company (needing a replacement appointed and ADT-1 filed), our team manages every step of the resignation compliance process.

File ADT-3 or Replace Auditor