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Dear Pujit,

As we know, the Auditor is appointed by the shareholders. But in case of Public Companies, where there are large number of shareholders, even though the Auditor is appointed by the shareholders, it is always recommended by the Board of Directors. Further, removal of Auditor is also proposed by the BoD.

This means that the BoD may remove the existing Auditor because of malafide i.e. non-genuine reasons, like, fraud in the company known to auditor, critical issues in the company that might result in auditor issuing qualified report, etc. In such case, it would be unfair on the part of shareholders. So, the Govt. has given the out-going (removed) auditor a chance of being heard at the General Meeting. He may give a disclaimer regarding his opinion about the company and also the reasons behind his removal if such removal is un-faithful for the shareholders. This expression of his views and opinions to the members or shareholders of the company is called as 'Representation'.

- CA. Amol G. Kabra