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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Board Disclosures and Website Disclosures

The auditor of Kaveri Foods Ltd reports a qualification on inventory valuation. The company secretary in practice also makes an adverse remark in the secretarial audit report. What must the Board's report contain under Section 134(3)(f)?

The Board's report must contain explanations or comments on both the statutory auditor's qualification and the secretarial auditor's adverse remark. Section 134(3)(f) covers every qualification, reservation, adverse remark or disclaimer in either report.

  1. AExplanations or comments on the auditor's qualification only, since the secretarial auditor's remarks go to the Registrar
  2. BExplanations or comments on both the auditor's qualification and the secretarial auditor's adverse remarkCorrect
  3. CExplanations on the secretarial auditor's remark only, since the statutory auditor's report is self-contained
  4. DNo explanation, if the qualification is described in the notes to accounts

Explanation

Section 134(3)(f) requires the Board to give explanations or comments on every qualification, reservation, adverse remark or disclaimer made by the auditor and by the company secretary in practice in the secretarial audit report. Both are covered, so limiting to one is wrong.

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