Secretarial audit or compliance audit is a part of total compliance management and an effective tool for corporate compliance management, it not only helps to detect non-compliance but also takes corrective measures. It applies to every listed company as well as every public company that has Paid up share capital more than 50,00,00,000 or turnover more than 250,00,00,000. Secretarial audit becomes mandatory if any one of these criteria is fulfilled. The secretarial audit can be conducted by a practicing company secretary.

The secretarial audit report must be prepared by a company secretary in practice and Form M-3.R, And it must also be annexed with the Board’s report.

The objectives of a secretarial audit are to verify and report on compliances of applicable laws and secretarial standards, it also protects the interest of various shareholders and avoids any unwarranted legal actions or legal penalties by law in forcing agencies. The non-compliances and inadequate compliances Are also identified and pointed out.

A secretarial audit is an effective mechanism that makes sure that all the compliance es necessary for the legal and procedural requirements are met, it also provides confidence to the key managerial personal and directors. It not only strengthens the goodwill of a company for the regulators and stakeholders but also is an effective governance and compliance risk management tool. A secretarial audit helps the investors as they can analyze the compliance level Of the companies. It not only increases the repetition of the company but also helps the directors to concentrate on important business matters as legal and procedural requirements are dealt with through secretarial audit.

Secretarial audit benefits promoters, regulators, officers of the company, executive directors, financial institutions, investors, government authority, banks, creditors, and, consumers.

To appoint a secretarial auditor consent And eligibility letter of the secretarial auditor must be obtained after this a board meeting must be called or convened. The remuneration of the secretarial auditor must be appointed and fixed in a board meeting. A certified copy of the resolution that was passed in the board meeting must be filed with the are ROC in Form MGT- 14.

The secretarial audit process starts with the appointment of the secretarial editor. Then the secretarial auditor must accept the appointment and preliminary discussions about the company with the secretarial auditor must take place. A preliminary meeting must be held with the alter and finalization of an audit plan must be laid down. After the finalization, the staff must be briefed about the plan. Testing, interview, and analysis must be completed along with The preparation of working papers. An audit summary for the discussion will be provided and later the secretarial audit report is submitted.

In case the company secretary in practice or any officer contravenes the provisions of secretarial edit then the company secretary in practice, or every officer of the company, or the company who is in default shall be punishable with find off 1,00,000 that may extend to 5,00,000.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.