Audit Engagement Withdrawal Letter Template for India

The Audit Engagement Withdrawal Letter is a crucial document used when an audit firm needs to terminate its engagement with a client company in India. This document becomes necessary when circumstances arise that prevent the continuation of the audit, such as scope limitations, independence concerns, or discovery of information that significantly impacts the audit process. The letter must comply with Section 140 of the Companies Act 2013, ICAI guidelines, and for listed companies, SEBI regulations. It requires careful drafting to address all regulatory requirements, including the mandatory filing of Form ADT-3 with the Registrar of Companies within 30 days of resignation. The document should comprehensively explain the withdrawal reasons, outline the status of work completed, and address professional obligations to ensure a proper handover process.

1. Letter Header and Date: Formal business letter header including auditor's firm details and date

2. Addressee Details: Client company name, address and details of key contact person (usually addressing the Board of Directors or Audit Committee)

3. Subject Line: Clear indication that this is regarding withdrawal from audit engagement

4. Reference to Original Engagement: Details of the original audit engagement letter and appointment date

5. Withdrawal Statement: Clear and unambiguous statement of intention to withdraw from the audit engagement

6. Reasons for Withdrawal: Professional and factual explanation of the circumstances leading to withdrawal

7. Status of Work Completed: Summary of audit work performed to date and pending matters

8. Professional Obligations: Statement regarding compliance with professional standards and regulatory requirements

9. Immediate Next Steps: Clear outline of immediate actions required by both parties

10. Closing and Signature: Professional closing, name and signature of authorized partner