CMA Intermediate · Corporate Accounting and Auditing · Secretarial Audit
In a secretarial audit report, the company secretary in practice makes a qualification about delayed filing of a statutory return. What does section 204 require of the Board of Directors?
The Board must explain in full any qualification, observation or other remark of the secretarial auditor in its Board's report. Section 204(3) imposes this requirement without any materiality threshold, and the Board has no power to have the remark deleted or passed to the statutory auditor.
- AExplain in full the qualification, observation or other remark in the Board's reportCorrect
- BRemove the qualification before annexing the report
- CRefer the qualification to the statutory auditor for a decision
- DDisclose it only if the amount involved is material
Explanation
Section 204(3) requires the Board, in its report under section 134(3), to explain in full any qualification, observation or other remark made by the company secretary in practice. There is no materiality condition and the Board cannot remove the remark.
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