A Secretarial Audit is a compliance audit conducted by a qualified Company Secretary (CS) to ensure that a company is adhering to the Companies Act, SEBI regulations, FEMA (Foreign Exchange Management Act), and other corporate governance norms. It is mandatory for certain companies under Section 204 of the Companies Act, 2013.
Why Secretarial Audit is Essential?
- Ensures compliance with legal & regulatory frameworks - Prevents penalties, legal issues, and corporate governance failures.
- Improves transparency & accountability - Strengthens investor confidence by showcasing ethical business practices.
- Identifies corporate risks & non-compliance - Provides early warning signals for potential legal violations.
- Mandatory for listed companies & large corporations - Required for companies with a paid-up capital of Rs50 crore or more or turnover of ?250 crore or more.
A well-executed secretarial audit helps businesses stay legally compliant, improve governance, and mitigate regulatory risks.