**NEED FOR SECRETARIAL AUDIT**
1. Complexity of laws- There are various laws i.e. Company Law, Competition Law,
Economic Laws, Securities and Capital Market Laws, Consumer Protection Laws,
Industrial and Labour laws, Pollution Control Laws, Foreign Exchange Legislation, etc. which implementation is required thoroughly audit to check their compliances
otherwise would be resulted in various punitive actions.
2. Mismanagement and misuse of public funds by several companies.
3. Ensure effective enforcement of laws and to avoid violations of statutory
Clause 49 Sub-clause I(C) (iii) of the Listing Agreementsays that “The Board shall
periodically review compliance reports of all laws applicable to the company,
prepared by the company as well as steps taken by the company to rectify instances of
non-compliances.” Therefore, all listed companies required a system for reporting to
the Board compliances with laws applicable to them. Hence, a Legal Compliance
Reporting System is necessary.
4. Effective tool to boost confidence amongst Directors, Promoters and Key Managerial
5. Hence, Secretarial Audit is an effective tool for corporate compliance management. It
helps ensure timely corrective measures when non-compliance is detected.