Unlocking Transparency: Demystifying Secretarial Audit in India

Secretarial Audit in India


In the dynamic and ever-evolving landscape of corporate governance, compliance, and transparency, the concept of Secretarial Audit has emerged as a vital mechanism to ensure that companies adhere to legal and regulatory requirements. Particularly in India, Secretarial Audit has gained significant importance, playing a pivotal role in maintaining corporate integrity and accountability. In this blog, we’ll delve into the intricacies of Secretarial Audit in India, its relevance for private companies, and its connection to Company Secretaries (CS) as professionals.

Understanding Secretarial Audit in India

Secretarial audit in India refers to a comprehensive review of a company’s compliance with various legal and regulatory requirements, as well as its adherence to corporate governance practices. It is conducted by a qualified company secretary who evaluates the company’s records, documents, and procedures to ensure that it is operating within the framework of applicable laws and regulations. The primary purpose of the secretarial audit is to enhance transparency, accountability, and compliance within the company.

Here are some key points to help you understand secretarial audits in India:

Legal Basis: The concept of secretarial audit in India is primarily derived from Section 204 of the Companies Act, 2013. According to this section, certain categories of companies are required to conduct a secretarial audit and obtain a secretarial audit report from a practicing company secretary.

Applicability: Secretarial audit is applicable to the following types of companies:

  • Listed companies
  • Public enterprises with at least 50 crores in paid-up share capital
  • Public companies having a turnover of ₹250 crore or more

Purpose: The main objectives of a secretarial audit are to ensure compliance with various laws, rules, and regulations, and to evaluate the company’s corporate governance practices. The audit aims to identify any non-compliance or deviation from prescribed procedures and to recommend corrective actions.

Scope: Secretarial audit encompasses a wide range of areas, including:

  • Compliance with the Companies Act and other relevant laws
  • Corporate governance practices
  • Board and committee meetings’ procedures and documentation
  • Maintenance of statutory registers and records
  • Filing of necessary forms and documents with regulatory authorities
  • Shareholder-related matters

Conducting the Audit: A qualified company secretary, who is in practice, is appointed to conduct the secretarial audit. The auditor examines relevant records, documents, registers, and other data to assess compliance and governance practices. The auditor then provides a report outlining their findings, observations, and recommendations.

Importance of Secretarial Audit

  • Compliance: Secretarial Audit ensures that a company is compliant with various legal provisions, reducing the risk of legal disputes and penalties.
  • Transparency: By reviewing and verifying company records, Secretarial Audit enhances transparency, allowing stakeholders to have a clear understanding of the company’s activities and operations.
  • Risk Mitigation: It helps identify potential areas of non-compliance or irregularities, enabling proactive measures to address these issues and minimize risks.
  • Corporate Governance: Secretarial Audit contributes to maintaining a high standard of corporate governance, fostering investor confidence, and protecting the interests of stakeholders.

Secretarial Audit for Private Companies

While Secretarial Audit was initially mandated for listed companies, the Ministry of Corporate Affairs (MCA) expanded its scope to include specific classes of private companies. According to the Companies Act, 2013, certain private companies meeting prescribed criteria are required to undergo a Secretarial Audit. This move aims to promote accountability and curb corporate misconduct even in private entities.

Role of CS Professionals in Secretarial Audit

Company Secretaries play a crucial role in conducting Secretarial Audit. Their in-depth knowledge of corporate laws and regulations equips them to assess a company’s compliance with legal requirements. CS professionals possess the expertise to examine various aspects such as:

  • Board Meetings and Resolutions: Ensuring that board meetings are conducted as per regulatory norms, and resolutions are duly recorded.
  • Statutory Registers and Records: Verifying the accuracy and maintenance of statutory registers, records, and documents.
  • Disclosure Requirements: Ensuring proper disclosure of information in financial statements, annual reports, and other relevant documents.
  • Compliance with Laws: Assessing compliance with applicable laws, including the Companies Act, SEBI regulations, and more.

Company Secretarial Audit Process

The process of Secretarial Audit generally involves the following steps:

  • Planning: Determining the scope, objectives, and methodology of the audit.
  • Data Collection: Gathering relevant documents, records, and information for review.
  • Examination: Scrutinizing the collected data to identify any discrepancies or non-compliance.
  • Reporting: Preparing a comprehensive audit report highlighting findings, observations, and recommendations for corrective actions.
  • Communication: Sharing the audit report with the company’s management and board of directors.


Secretarial Audit in India is an essential tool for upholding corporate governance standards, ensuring compliance, and fostering transparency. As private companies also come under its purview, this practice strengthens the foundation of corporate integrity. The involvement of CS professionals in conducting Secretarial Audits highlights their role as guardians of corporate legality and ethics. By embracing Secretarial Audit, companies can not only enhance their operational efficiency but also build a reputation based on trust and accountability in the competitive business environment.

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