The auditor resigns
There can be several reasons why an auditor would resign
after he has
completed his report but before the start of the next fiscal year.
Perhaps the board doesn’t pay promptly or under-paid the auditor.
Perhaps the auditor finds the board to be uncooperative and difficult
to work with or perhaps the board will not agree to a new fee schedule.
In these cases the auditor will give the board a resignation letter
stating the reason for his resignation. Whether he gives an honest
reason or not, is hard for the owners to know.
The auditor at one Toronto condo resigned after
submitting a
qualified report at the corporation's fiscal 2012 AGM. The corporation
could not show sufficent records for the auditor to conduct a proper
audit and it appeared that the accounting firm no longer wanted to
retain the contract.
Resignation
after
starting an audit
It
is a bad omen if an auditor resigns after
starting the
audit. This is an indication that the auditor has uncovered something
very serious.
Perhaps the auditor has lost trust in the board, there is a conflict of
interest, an independence issue, or inducements by the board to perform
illegal, unjust or fraudulent acts. In such circumstances, the auditor
may take immediate action.
At one North York condo, the auditor resigned while
performing the audit when he found that utility bills and renovation
invoices belonging to a different property were charged to this condo
corporation. There were also unexplained $500,000 in missing common
element fees and an empty reserve fund.
A resignation is serious
Owners should become very concerned if their auditor resigns. It is always a bad sign.
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