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CMA Intermediate · Corporate Accounting and Auditing · Secretarial Audit

Which statement about the relationship between Sections 204 and 205 and the duties of the Board and managing director is correct under Section 205(2)?

Section 205(2) provides that Sections 204 and 205 do not affect the duties and functions of the Board of Directors, the chairperson, the managing director or the whole-time director under the Act or any other law. Secretarial audit and the company secretary's role do not shift those responsibilities.

  1. ASections 204 and 205 do not affect the duties and functions of the Board, chairperson, managing director or whole-time directorCorrect
  2. BThe company secretary's functions replace the duties of the managing director on compliance
  3. CSecretarial audit relieves the Board of responsibility for compliance with other laws
  4. DThe chairperson's duties end once a secretarial audit report is issued

Explanation

Section 205(2) states that Sections 204 and 205 shall not affect the duties and functions of the Board, chairperson, managing director or whole-time director under the Act or other laws. Hence the Board's responsibility continues despite the secretarial audit or the company secretary's role.

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