Skip to content

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

Veda Textiles Ltd, a listed company, appointed a company secretary in practice who issued a secretarial audit report. The Board's report did not mention a qualification the auditor had made on delayed filing of a return. Under the Companies Act, 2013, what is the Board's obligation regarding the auditor's qualifications?

The Board must explain in full every qualification, observation or other remark made by the company secretary in practice in the secretarial audit report. This explanation goes in the Board's report. It is a statutory duty and does not depend on shareholder questions or on the remarks being merely advisory.

  1. AExplain in full any qualification or observation in its Board's reportCorrect
  2. BIgnore it, because the secretarial auditor's remarks are advisory only
  3. CSend the qualification only to the Registrar, not in the Board's report
  4. DExplain it only if the shareholders ask at the annual general meeting

Explanation

The Act requires the Board, in its report under section 134(3), to explain in full any qualification, observation or other remark made by the secretarial auditor. Treating the remarks as advisory or limiting disclosure to the AGM does not meet this duty.

Did you get it right without looking?

One question tells you little. A timed set on Secretarial Audit shows your real accuracy, how long you take and where you lose marks.

Practise Secretarial AuditFree diagnostic mock

More Secretarial Audit questions