Ganesh Komma says auditor resignations signal fraud in over 80% of cases. Use financial screening platforms to flag companies where auditors quit, then avoid them or dig deeper. This one check filters out most scam stocks targeting inattentive retail investors.
How to Avoid Fraud as a Retail Investor the Number one Red Flag Auditor Resignation the most important person in a company is not the CEO, it is the auditor. Their job is to certify that the accounting books are accurate. In over 80% of the cases. An auditor resignation means the accounting books are fraudulent or something is cooking up there. Your second fraud prevention checklist. Go to the financial screening websites like a simple screener.in and search for the term auditor resignation and what is the action you need to take? Create a list of all the companies where auditors have resigned recently. Treat this as a list of do not touch zone or keep it as a red flag and analyze it more until proven otherwise. Now the bottom line. Fraudulent companies rely on retail investors being lazy. By simply checking the status of the auditor whether he is leaving it in middle or easy, continuing you as a retail investor can eliminate a huge percentage of scam stocks from your portfolio. Stay safe and stay solvent.
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