Clause 49 Of Listing Agreement Audit Committee

Posted on Posted in Uncategorized

The revised Section 49 appropriately promoted the original intention to protect the interests of investors by improving governance practices and advertising. Five major themes prevail. The criteria for the independence of directors have been clarified. The roles and responsibilities of the Board of Directors have been expanded. The quality and quantity of disclosures have improved. The roles and responsibilities of the audit committee in all matters of internal control and financial reporting have been strengthened and the responsibility of senior management, in particular the CEO and CFO – has been improved. In each of these areas, the revised Section 49 falls within the realm of global best practices (and sometimes even beyond). At the end of 2002, SEBI formed a committee to assess the adequacy of current corporate governance practices and propose improvements. In the wake of the Satyam scandal, SEBI has become increasingly strict with regard to disclosure standards and the implementation of Term 49, in order to significantly change transparency and accountability in the country. The Companies Act has provided adequate legal support for these standards. In terms of transparency and accountability, there are laws on the mandatory rotation of auditors and audit firms.

A public accountant is not able to provide non-audit services to a company. Chartered accountants are required to report fraudulent acts found in the performance of their duties. In addition, the law requires that at least one-third of a company`s board of directors be composed of independent directors. Independent directors have been banned from receiving stock options or remuneration. . . .