Financial Daily from THE HINDU group of publications
Thursday, Sep 09, 2004
Company secretaries want to be treated on par with other auditors
New Delhi , Sept. 8
COMPANY secretaries have urged the Government to treat them on a par with other auditors.
"It is strongly felt that the secretary in whole time practice giving the compliance certificate should be appointed at the annual general meeting of the company in line with provisions akin to appointment of statutory auditor and as now envisaged for cost auditor in the concept paper," said Ms Preeti Malhotra, Council Member, Institute of Company Secretaries of India (ICSI).
This would keep all the earmarked professionals appointed for conducting financial or cost or secretarial audit on the same footing, she added.
As the concept paper on the revamped Company Law provides major thrust on professionalism and self-governance, it is felt that there is an imperative need for ensuring professional independence so that the compliances by companies be made in letter and spirit, Ms Malhotra said.
"With a view to obviating any conflict of interest, it is necessary that appointment and removal of company secretary in employment be made by board of directors of the company."
Currently, though the appointment and removal of company secretary is done through a company's board of directors, the law does not mandate it. This, at times, leads to arbitrary decisions on removal of company secretaries.
On the issue of secretarial compliance audit of the company to be conducted by a company secretary, Ms Malhotra said: "There is a feeling among the professionals that secretarial audit should be made compulsory in companies where the larger public interest is involved. It should be made part of the annual report like the auditor's report."
Regarding exclusion of company secretary as a special auditor in the concept paper, she said that suitable corrections might be effected to rectify the anomaly while drafting the Bill.
The Companies (Amendment) Bill, 2003 had suggested that the Central Government may direct, at any time by order, the special audit, cost audit or secretarial audit of company's accounts by suitable professionals.
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