Secretarial Audit is introduced by recently enacted Companies Act, 2013. It is a process to check compliances made by the Company under Corporate Law & other laws, rules, regulations, procedures etc. It is a mechanism to monitor compliance with the requirements of stated laws and processes. Periodically examination of work is necessary to point out errors & mistakes and to make a robust compliance mechanism system in an organization. ecretarial Audit gives comfort to the regulators, stakeholders and management that company has disciplined approach to evaluate and improve effectiveness of risk management, control, and governance processes.
As per section 204(1) of Companies Act, 2013 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following companies are required to obtain Secretarial Audit Report:-
- Every listed company.
- Every public company having a paid-up share capital of fifty crore rupees or more.
- Every public company having a turnover of two hundred fifty crore rupees or more.
Secretarial Audit The process:-
- - Initial discussions.
- - Identifying scope and objectives.
- - Obtaining of formal engagement letter .
- - Meeting with teams//persons involved5 Planning of Audit programme.
- - Informal interactions and understanding of business.
- - Preparation of Working Papers.
- - Observations/Discussions.
- - Summary of Audit findings and subsequent discussions.
- - Audit Report.
- - Follow up.