Secretarial Audit Guidelines

SESSION -V
Secretarial Audit
Guidelines
Mohammad Sanaullah FCS
Fundamental Principles of Secretarial Audit
 The fundamental principles that should

govern the conduct of a Chartered
Secretary have been broadly identified as
to encompass:
 integrity;
 professional independence;
 professional competence;
 objectivity;
Fundamental Principles….
 ethical behavior;
 conformance to technical standards, if any,
prescribed; and
 confidentiality of information acquired in the
course of professional work.
Fundamental principles….
 The history of human civilization bears ample

testimony to the reverence and honour with
which society looks upon persons who
subjugate their personal gain to public good.
Professionals, with their rigorous education and
training belong to a class of people who have to
uphold public good and serve wider public
interest.
Fundamental principles..
 The societal expectations of norms are referred

to as `values’ which are nothing but generalized
beliefs or expected standards of conduct. The
study of what values a society ought to have is
the subject of a branch of philosophy known as
ethics. A code of professional conduct is also
referred to as code of professional ethics.
Accordingly, the ethics of a Chartered Secretary
would signify his conduct and behavior.
Code of Conduct
 Code of conduct are the norms envisaging
various principles, rules and regulations set out
by the professional body.
 A Secretarial Auditor functions subject to the
provisions of such norms. He should conduct
himself in a manner consistent with the code of
conduct so as to maintain professional standard.
Compliance with the code of conduct helps in
achieving the important professional standards
like integrity, professional independence,
competence, ethical behavior etc.
Code of Conduct …
 since a secretarial auditor is a member of the

institute of chartered secretaries he should
conduct himself in a manner codified in the code
of conduct so as to maintain the professional
standard.
Guidelines for Secretarial Auditors
 The following guidelines may be adopted for

engagement of a Secretarial Auditor:
i) Applicability: The services of Secretarial
Auditor are normally based on the Paid up
capital and the profitability of an
Organization.
ii) Coverage: The Secretarial Audit will, for the
present, cover compliances under the
Companies Act, and the Securities and
Exchange Commission Rules etc.
Guidelines for Secretarial Auditors …
If a company desires and the Secretarial
Auditor agrees, the scope of audit can be
extended to cover other laws like, Foreign
Exchange Regulation Act, etc.
iii) Appointment: Secretarial Auditor can
be appointed by the board of directors
from among the practicing Chartered
Secretaries at the last meeting of the
board held before end of the preceding
financial year of the company.
In the case of new companies, the

appointment can be made at the first
meeting of the Board of Directors.
iv) Qualifications: A member of the
Institute of the Chartered Secretaries
holding certificate of practice only can be
appointed as a Secretarial Auditor.
v) Report to Whom: The Secretarial

Auditor shall submit the report to the
Board of Directors who shall annex the
same to the Director’s report and file it
with the Registrar of Joint Stock
Companies along with their report. Any
qualifications or observations made by the
Secretarial Auditor requiring reply shall be
dealt with in the Directors’ Report.
vi) Period of Audit: The Secretarial Audit

would relate to the financial year of the
company.
vii) Time limit for submission of report: The
Secretarial Auditor is required to submit
the report within 90 days from the close of
the financial year of the company.
viii) Disqualifications: No practicing Chartered

Secretary suffering from any disqualifications
under Companies Act shall be appointed as a
Secretarial Auditor.
IX)Removal: In case it becomes necessary for
the Board of Directors to remove any Secretarial
Auditor, reasons for such removal shall be noted
in the Directors’ report and the practicing
company secretary shall be given of opportunity
to state his case before the general body of
shareholders which adopts the Directors’
x) Certificate: The institute of Chartered

Secretaries will develop a standard
format of the Certificate to be issued by
Social Responsibilities of a Secretarial Auditor
 With globalization of our Economy and

consequent reforms measure in corporate and
other interrelated laws, there is a multifold
increase in the social responsibility of a
Social Responsibilities of a Secretarial Auditor …
 The economic and social welfare responsibilities

which the government has undertaken has led
to an enormous increase in the number of laws
governing corporate bodies. A corporate body
does not act in isolation but well within the
society itself and hence its activities have a
tremendous bearing on the economic
development of he society.
…
 A business enterprise is conceived as an
amalgam of the interest of shareholders,
creditors, employees, society etc. The
government seeks to achieve the goal of social
welfare by controlling and regulating corporate
sector through enactment of various laws like
Companies Act, Securities and Exchange
Commission Act and other related Acts.
…
 The social responsibility of a Secretarial Auditor
lies in effectively bridging the gap between the
percept and practice of mercantile, economic
and social legislation. Being equipped with
sound knowledge and under standing of these
laws, he owes a duty to the society by rendering
expert services like interpretation of laws,
ensuring compliance and so forth.
…
 The expectation of the society and the
Government from the profession of Chartered
Secretaries on whom the job of secretarial audit
is to be entrusted is fearless dedication to the
great cause aimed at ensuring the achieving the
objectives of a welfare state.
 THANK YOU

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SESSION -V

 The fundamental principles that should

 The history of human civilization bears ample

 The societal expectations of norms are referred

 since a secretarial auditor is a member of the

 The following guidelines may be adopted for

In the case of new companies, the

v) Report to Whom: The Secretarial

vi) Period of Audit: The Secretarial Audit

viii) Disqualifications: No practicing Chartered

x) Certificate: The institute of Chartered

 With globalization of our Economy and

 The economic and social welfare responsibilities

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