a. Other reasons for resigning from an audit engagement include:

• A consistent lack of integrity demonstrated by management and/or those charged with governance.
• The audit firm can no longer maintain its independence (e.g., following a corporate action).
• The client is no longer profitable for the firm.

b. Procedures for the resignation of current auditors as per company legislation:
i. The resignation should be made to the company (at the registered office) in writing. The company should submit this resignation letter to the appropriate regulatory authority.
ii. The auditor should prepare a statement of the circumstances setting out the reasons for the resignation.
iii. The company should send this statement to:
– The Corporate Affairs Commission within 14 days of receipt.
– All persons entitled to receive a copy of the company’s financial statements, principally the shareholders.
– The auditors may require the directors to call a meeting of the shareholders to discuss the circumstances of the auditor’s resignation.

c. Ethical position for a new auditor taking up the appointment:

• The new firm should communicate with the current auditors to establish if there are any matters they should be aware of before accepting the appointment.
• The new auditor should receive permission from the client to communicate with the outgoing auditor. If the client refuses permission, the appointment should not be accepted. If there are unresolved issues after communication with the outgoing auditor, these must be carefully considered before proceeding.