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CMA Intermediate · Corporate Accounting and Auditing · Secretarial Audit

Which statement about section 204 and the duties of the Board and managerial personnel is correct under section 205(2)?

Sections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time director under the Act or any other law. The secretarial audit therefore neither relieves them of compliance duties nor transfers those duties to the auditor.

  1. AThe secretarial audit relieves the managing director of compliance duties
  2. BSections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time director under the Act or other lawCorrect
  3. CThe Board's duties pass to the company secretary in practice once the report is issued
  4. DThe chairperson's duties are limited to those listed in section 204

Explanation

Section 205(2) provides that sections 204 and 205 shall not affect the duties and functions of the Board of Directors, chairperson, managing director or whole-time director under the Act or any other law. A secretarial audit report therefore does not transfer or reduce those responsibilities. The options claiming relief or transfer contradict this.

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