SECRETARIAL AUDIT

                                                                   SECRETARIAL AUDIT

As defined by The Institute of Company Secretary of India “secretarial audit is an audit to check compliance of various legislation including the companies act and other corporate and economic laws applicable to the company”

               Basically it checks the compliance of various laws, regulations and act which are applicable to the organization. Like any other audit procedure here is also auditor expressed his opinion.

Following person is eligible to be appointed as a secretarial auditor:

                                                                                                         Only a member of the institute of company secretary of India holding certificate is eligible to be appointed as a secretarial audit.

Following classes of companies are required to undergo secretarial audit:

1.       All listed companies.

2.       Public company having paid-up capital >= 50 crore. Or

3.       Public company having turnover >= 250 crore.

Periodicity of secretarial audit:

                                                                Secretarial audit is carried out periodically (quarterly/half year/annually) and adverse finding if any is reported on interim basis to the board immediately. Secretarial audit report to be annexed with board report is required to be submitted before preparation of board report.

Format of secretarial audit report:

                                                                     Audit report is required to be provided in the format prescribed in FORM MR-3.

How is secretarial auditor appointed:

                                                                         Secretarial auditor shall be appointed by means of resolution passed at a duly convened board meeting.

In case of casual vacancy it is advisable that change in the secretarial auditor during the year are reported to the members in the board’s report.

Ceiling limit: till now there is no such restriction.