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CS Professional · Compliance Management, Audit and Due Diligence · Secretarial Audit

CS Rohan Iyer, secretarial auditor of Sundaram Foods Ltd, reported suspected employee fraud to the Central Government in good faith. The company's directors allege he breached his duty of confidentiality to the company. What is the correct position under section 143?

He is protected. Section 143(13) provides that no duty an auditor is subject to is regarded as contravened by reporting a fraud under sub-section (12) in good faith, and section 143(14)(b) extends this to secretarial auditors. Neither Board consent nor later proof of fraud is required.

  1. AHe is liable for breach of confidentiality because the company did not approve the report
  2. BHe is protected only if the fraud is later proved
  3. CHe is protected only if he first obtains the Board's consent
  4. DNo duty to which he may be subject is regarded as contravened by reason of reporting in good faithCorrect

Explanation

Section 143(13) states that no duty to which an auditor may be subject is regarded as contravened by reporting the sub-section (12) matter if done in good faith. Through section 143(14)(b), this protection extends to the secretarial auditor. Proof of the fraud or Board consent is not a condition.

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