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CS Professional · Compliance Management, Audit and Due Diligence · Documentation and Maintenance of Records

During a secretarial audit of Lotus Retail Ltd, the auditor finds that statutory registers are maintained only as electronic files, with no paper copies. What should the auditor primarily verify to conclude that this practice is compliant with Section 120?

The auditor should verify that the electronic registers are kept in the form and manner prescribed. Section 120 permits electronic maintenance but subject to the prescribed requirements. It does not require a Registrar certificate, mandatory paper copies or dormant company status.

  1. AThat the Registrar has issued a certificate permitting electronic registers
  2. BThat the electronic records are kept in the form and manner prescribed for such maintenanceCorrect
  3. CThat paper copies are printed and signed every month by the Board
  4. DThat the company has obtained dormant company status under Section 455

Explanation

Section 120 allows records to be kept in electronic form, but in such form and manner as may be prescribed. The auditor must therefore test conformity with the prescribed form and manner. No Registrar certificate or paper backup is mentioned in the section, and dormant status under Section 455 is unrelated to how registers are maintained.

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