In this day and age, with big companies falling victim to secretarial fraud, your business could be at risk if you don’t have the proper safeguards in place. A secretarial audit is an excellent way to ensure that your financial and other records are free from errors and any tampering by employees. Contact one of the top business consulting firms or look at these secretarial audit facts so you understand why your business needs one and what you can do to get started today!
Secretarial Audit – What is it and why does your company need one?
A secretarial audit is a method used to ensure that an organization is following the rules. It facilitates a company’s compliance with rules and regulations while also maintaining discipline among its administration, officials, and members. Many people can benefit from a secretarial audit, including promoters, executive directors, company officers, regulators, government authorities, investors, financial institutions, banks, creditors, and consumers.
- WHAT EXACTLY IS A SECRETARIAL AUDIT?
If you want to be sure that everything in your company is on the up and up, or to see where there might be changes for improvement, then a secretarial audit is for you. A secretarial audit will ensure all policies are being followed correctly and offer advice on how to improve certain aspects of your office. All companies can benefit from having a secretarial audit performed at regular intervals. This is essentially a review of the company’s documents and information to ensure compliance with all laws, rules, and regulations applicable to the company. This is a compliance inspection overseen by an impartial professional. It aids in identifying and uncovering any violations and taking timely corrective action.
- COMPANIES ACT, 2013 SECRETARIAL AUDIT
Section 204 of the Companies Act of 2013, as amended by Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules of 2014, governs Secretarial Audit.
Secretarial audits are required for the following companies:
1) Every publicly traded company; or
2) Every public company with a paid-up share capital of at least Rs. 50 crores; or
3) Every public company with a turnover of at least Rs. 250 crores
4) Every company with outstanding loans and borrowings of Rs. 100 crores or more from banks or financial institutions
- THE ADVANTAGES OF SECRETARIAL AUDIT
- It aids in the detection of non-compliance.
- It builds trust and confidence in the Company’s Directors and Key Management Personnel.
- It boosts the company’s reputation.
- Due to timely compliance, it reduces the workload of various regulators.
The Ministry of Corporate Affairs has amended the Secretarial Audit regulations, which has expanded its purview. An independent process with objective assurance, the secretarial audit aims to add value and enhance an organization’s operational facilities. Creating a systematic, standardized method to analyze and improve the efficiency of risk management strategies, control, and governance processes makes it easier to achieve the organization’s goals.
Regardless of whether you’re in the service or manufacturing industry, your business is at risk if you do not have regular secretarial audits in place. It doesn’t matter if your business is big or small, you need to ensure that all your documents are being properly filed and maintained so they can be accessed quickly and easily should they be required as evidence in court or during litigation. For private businesses and smaller public sector organizations, a secretarial audit is an elective and voluntary process, like other essential services you choose based on your decision-making authority, such as hiring a business setup advisory, a company formation consultant, or a company registration service. These businesses may use secretarial audit procedures according to their whims and fancies to maintain compliance systems and minimize the dangers of non-compliance errors.