Under the Companies Act,2013<\/strong><\/p>\n\n\n\n1. The Audit Committee is vest with\nauthority to request the opinions of auditors on internal control systems as\nwell as the scope of the Audit, the findings of the auditors, and the examination\nof financial statements before the submission before the Board. The Committee\ncan also discuss the relevant issues with the internal and statutory Auditor\nand the Management of the Company.<\/p>\n\n\n\n
2. The Audit Committee has the authority\nto examine any issue related to the problems specified in guidelines or\nreferred to by the Board. For this reason, the Committee can seek professional\nadvice from sources outside of the Company. In addition, the Committee to\nconduct its investigation will be fully able to access the business documents.<\/p>\n\n\n\n
3. The auditors of the Company and the\ntop management employees have the right to be heard at sessions of the Audit\nCommittee when it considers the auditor’s report. However, they do not be able\nto vote.<\/p>\n\n\n\n
Also, as per SEBI LODR Regulation, the\nAudit Committee has the power to –<\/strong><\/p>\n\n\n\n(i) To look into any activity within its\nterms of reference,<\/p>\n\n\n\n
(ii) seek information from any employee,<\/p>\n\n\n\n
(iii) Get outside legal or other\nprofessional advice,<\/p>\n\n\n\n
(iv) Get attendance of outsiders with\nrelevant expertise if it<\/p>\n\n\n\n
considers necessary.<\/p>\n\n\n\n
<\/span>Audit Committee of Board of a\nCompany and Vigil Mechanism<\/span><\/h2>\n\n\n\nSubsections (9), (10) of section 177 of\nthe Companies Act, 2013, as well as Rule 7 of the Companies (Meetings of the\nBoard as well as its Powers) Rules, 2014, stipulate that each listed Company\nand companies belonging to the following classes or classes must create a\nvigilance mechanism for their employees and directors to express their genuine\ngrievances or concerns.<\/p>\n\n\n\n
(a) The companies that will accept public\ndeposits.<\/p>\n\n\n\n
(b) Companies that have borrowed money\nfrom banks or public financial institutions that exceed fifty crore rupees.<\/p>\n\n\n\n
The companies establishing a Vigil\nMechanism shall oversee the monitoring mechanism of an Audit Committee. The\nvigil procedure should offer adequate safeguards against the exploitation of\nthose using the instrument and provide direct communication with the\nChairperson and the Chairperson of the Audit Committee in appropriate or\nextraordinary circumstances. The details regarding the establishment of the\nvigil process must be made public on the Company’s portal, if it has one, and\nin the Board’s report.<\/p>\n\n\n\n
<\/span>Disclosure in Board’s Report<\/span><\/h2>\n\n\n\nThe report of the Board has to provide\nthe members that the Audit Committee is composed. If the Board did not accept\nany of the recommendations of the Audit Committee, the same is required to be\nstated in the report of the Board and the reasons for that.<\/p>\n\n\n\n
<\/span>Wrapping Up<\/span><\/h2>\n\n\n\nTo summarize, we can say that the Audit Committee of the Board of a company is considered one of the significant corporate governance mechanisms. It ensures Internal Financial Control and helps with the risk management system.<\/p>\n","protected":false},"excerpt":{"rendered":"
The present economic scenario has heightened the need for influential audit committees. The financial downfall and apparent fraudulent activities at well-known companies, even some NPOs, and phenomena such as the credit crunch and ongoing economic instability, are well known to the public. Moreover, new companies also face unique challenges triggered by their less-developed internal control […]<\/p>\n","protected":false},"author":12,"featured_media":43510,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120],"tags":[2357],"acf":{"service_id":"408"},"authorName":"Priyanka Bajpayee","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/03\/IMG-20220303-WA0005.jpg","authorDescription":"A Company Secretary together with PG in international Business, she has gained significant experience as legal content writer. She has keen interest in doing research and writing on legal and financial subject matters. She also holds work experience in legal compliances.","postViews":13435,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/43506"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=43506"}],"version-history":[{"count":6,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/43506\/revisions"}],"predecessor-version":[{"id":43513,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/43506\/revisions\/43513"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/43510"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=43506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=43506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=43506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}