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CS Professional Secretarial Audit, Compliance Management and Due Diligence Syllabus
Every chapter and topic of Secretarial Audit, Compliance Management and Due Diligence examined in CS Professional — 2 chapters, 6 topics, plus 51 flashcards written against it.
Secretarial Audit, Compliance Management and Due Diligence syllabus — full chapter and topic list
Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Secretarial Audit, Compliance Management and Due Diligence in CS Professional, not a summary of it.
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Secretarial Audit
3 topics- Scope and Objectives
- Process and Methodology
- Reporting and Follow-up
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Compliance Management
3 topics- Compliance Framework
- Compliance Monitoring
- Compliance Reporting
Secretarial Audit, Compliance Management and Due Diligence flashcards for CS Professional
24 of 51 cards from the Secretarial Audit, Compliance Management and Due Diligence deck — real questions with worked answers.
What is Secretarial Audit?
An independent, objective compliance verification mechanism in which a Practising Company Secretary (PCS) examines whether a company has complied with applicable laws, rules, regulations and procedures, and reports the findings in Form MR-3.
Which provision of the Companies Act, 2013 mandates Secretarial Audit?
Section 204, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Which classes of companies are mandatorily required to obtain a Secretarial Audit Report?
Every listed company; every public company with paid-up share capital of Rs. 50 crore or more; every public company with turnover of Rs. 250 crore or more; and every company having outstanding loans/borrowings from banks or public financial institutions of Rs. 100 crore or more.
Who is authorised to conduct a Secretarial Audit under Section 204?
Only a Company Secretary in Practice (PCS) holding a valid certificate of practice from ICSI.
In which form is the Secretarial Audit Report issued?
Form MR-3, annexed to the Board's Report.
What are the primary objectives of Secretarial Audit?
To ensure legal and procedural compliance, detect non-compliance early, facilitate corrective action, protect stakeholders' interests, build corporate goodwill, and provide assurance to management, regulators and investors.
State three key scope areas covered by Secretarial Audit.
Compliance with the Companies Act and rules; SEBI Act, regulations and listing requirements; FEMA (overseas/foreign direct investment); plus other specifically applicable laws, secretarial standards and the Memorandum/Articles.
What is the penal consequence under Section 204(4) for default in Secretarial Audit?
The company, every officer in default, or the company secretary in practice who is in default is liable to a penalty of Rs. 2,00,000 (post 2020 amendment, replacing fine of Rs. 1 lakh to Rs. 5 lakh).
What is the difference between Secretarial Audit and Secretarial Standards?
Secretarial Audit is the verification process of compliance with laws by a PCS, while Secretarial Standards (SS-1 to SS-4) are the codified norms issued by ICSI on board/general meetings, dividend and report of board that companies must follow and the audit checks.
What is a Secretarial Compliance Report and which entities file it?
An annual report on compliance with SEBI regulations under Regulation 24A of SEBI (LODR) Regulations, given by a PCS in the SEBI-prescribed format; required of every listed entity and its material unlisted subsidiaries, filed within 60 days of financial year end.
Distinguish Secretarial Audit (Sec 204) from the Secretarial Compliance Report (Reg 24A LODR).
Secretarial Audit covers all applicable laws and is reported in MR-3 attached to the Board's Report; the Secretarial Compliance Report covers only SEBI laws/regulations and is filed with the stock exchange within 60 days of year-end.
What is meant by 'reporting with qualification' in a Secretarial Audit Report?
Where the PCS finds instances of non-compliance, they must qualify the report by specifically stating the nature of non-compliance, its impact and any management remarks, instead of giving an unqualified clean opinion.
List the broad stages of the Secretarial Audit process.
Appointment and acceptance, preliminary discussions/scoping, finalising the audit plan and checklist, collection of data and records, examination/verification, working papers preparation, identifying non-compliances, discussion with management, and submission of the report (MR-3).
What are 'working papers' in Secretarial Audit and why are they important?
They are the records of evidence, checklists, observations and analysis collected during the audit; they document the basis of the auditor's opinion, support conclusions, and serve as defence proof of due diligence performed.
What is the recommended periodicity/methodology for an effective Secretarial Audit?
A continuous/ongoing approach rather than year-end only — periodic (e.g., quarterly) verification through the year so non-compliances are detected and rectified in time, culminating in the annual MR-3 report.
What is a Secretarial Audit checklist?
A structured, law-wise list of compliance requirements used by the PCS to systematically verify each applicable provision, ensuring no statutory requirement is omitted during examination.
What does 'test checking' mean in the methodology of Secretarial Audit?
Examining a representative sample of transactions/records rather than 100%, relying on internal controls; however, statutory registers, board/general meeting records and key event-based compliances are usually checked exhaustively.
Under Section 143(14), what powers and duties of a company auditor apply to the Secretarial Auditor?
The PCS conducting Secretarial Audit has the same right of access to books, records and information, and the same duty to report, as the statutory (financial) auditor under Section 143.
What is the auditor's responsibility regarding 'events/actions having major bearing' on company affairs?
In MR-3 the PCS must report specific events or actions during the period (e.g., redemption/buyback, major borrowings, mergers, foreign investment, scheme of arrangement) that had a major bearing on the company's affairs in pursuance of laws/regulations.
What is 'follow-up' in the context of Secretarial Audit reporting?
The process where management, after receiving qualifications/observations, takes corrective action; the auditor reviews remedial measures in subsequent periods and management responds to qualifications in the Board's Report under Section 134(3).
How must the Board respond to qualifications in the Secretarial Audit Report?
Under Section 134(3), the Board's Report must include explanations or comments by the Board on every qualification, reservation, adverse remark or disclaimer made by the Secretarial Auditor.
What is Due Diligence?
A systematic, investigative process of examining and verifying the affairs, records, assets, liabilities and compliance of a business before entering into a transaction, to assess risks, value and to make an informed decision.
Name the main types of due diligence.
Legal, financial, secretarial/corporate compliance, tax, environmental, human resource, commercial/operational, technical, and information/cyber due diligence.
What is the purpose of legal due diligence in M&A?
To verify legal title, contracts, litigation, statutory compliances, intellectual property, regulatory approvals and liabilities so the acquirer understands legal risks and can structure indemnities, conditions precedent and pricing accordingly.
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Planning Secretarial Audit, Compliance Management and Due Diligence for CS Professional
Secretarial Audit, Compliance Management and Due Diligence is about 25% of the CS Professional syllabus by topic count — 6 of 24 topics, spread over 2 chapters. At roughly 45 minutes per topic plus 12 minutes per sub-topic, a first pass runs to about 5 hours.
Work top-down: read the chapter, then tick topics off individually rather than marking the whole chapter done. Sub-topics are where silent gaps hide.
Secretarial Audit, Compliance Management and Due Diligence (CS Professional) FAQ
What is in the CS Professional Secretarial Audit, Compliance Management and Due Diligence syllabus?
Secretarial Audit, Compliance Management and Due Diligence is split into 2 chapters — Secretarial Audit and Compliance Management, containing 6 topics and 0 sub-topics in total.
How is Secretarial Audit, Compliance Management and Due Diligence structured in the CS Professional syllabus?
2 chapters. Secretarial Audit, Compliance Management and Due Diligence accounts for about 25% of the topics in the whole CS Professional syllabus (6 of 24).
How long should I spend on Secretarial Audit, Compliance Management and Due Diligence for CS Professional?
Budget around 5 hours for a first pass through Secretarial Audit, Compliance Management and Due Diligence — about 45 minutes per topic plus 12 minutes per sub-topic across its 6 topics. Add revision cycles on top.
Are there flashcards for CS Professional Secretarial Audit, Compliance Management and Due Diligence?
Yes — a 51-card Secretarial Audit, Compliance Management and Due Diligence deck. Sample cards are printed on this page, and the full deck is free in the Examius app with spaced repetition scheduling.