Resignation doesn’t absolve auditor from reporting fraud

The National Financial Reporting Authority (NFRA) has said that resignation does not absolve the auditor of his responsibility to report suspected fraud or fraud as mandated by law. The NFRA in a circular dated June 26 has said that it has noticed that auditors are not fulfilling their statutory responsibilities relating to reporting of fraud as required by the Companies Law.

NFRA said that statutory auditors are under a mandatory obligation to report fraud or suspected fraud if they observe suspicious activities, transactions or operating circumstances in a company that indicate reasons to believe that an offence of fraud is being or has been committed against the company by its officers or employees.