> ## Documentation Index
> Fetch the complete documentation index at: https://docs.bizaxl.com/llms.txt
> Use this file to discover all available pages before exploring further.
# Secretarial Audit
> Manage the secretarial audit process for eligible companies, from checklist completion through draft and final report to submission.
**Roles: CS Executive, CA Partner** - CS Executives conduct the audit and prepare the report. CA Partners finalise and submit the report. The partner signing the secretarial audit report must be a practising Company Secretary.
**Upstream dependencies:** A CA Engagement must exist for the company client. Board meeting minutes, ROC filing records, and statutory registers for the audit period should be available in the system before the audit begins.
**Downstream:** The submitted secretarial audit report (Form MR-3) is filed with the ROC as an attachment to the company's MGT-7 annual return. See [ROC Filings](/professional-services/ca-practice-management/roc-filings).
***
## Overview
A CA Secretarial Audit record manages the secretarial audit required under section 204 of the Companies Act, 2013. The audit covers whether the company has complied with the provisions of the Act, applicable SEBI regulations, FEMA, labour laws, environmental laws, and the Secretarial Standards issued by ICSI. The CS Executive conducts the audit area by area using a structured checklist, then prepares the draft report. The CA Partner reviews, finalises, and submits the signed report.
Records are named automatically in the format **SA-YYYY-#####** (for example, SA-2025-00008).
***
## Who needs a secretarial audit
A secretarial audit is mandatory under section 204 for:
| Category | Threshold |
| -------------------------------------- | ---------------------------------------------------------------------------------------------------- |
| **Listed companies** | All listed companies, regardless of size |
| **Public companies (paid-up capital)** | Paid-up share capital of Rs. 50 crore or more |
| **Public companies (turnover)** | Turnover of Rs. 250 crore or more |
| **Companies with outstanding loans** | Outstanding loans or borrowings from banks or public financial institutions of Rs. 100 crore or more |
Private companies are generally exempt unless they are subsidiaries of listed companies. Check the client's latest financial data against these thresholds at the start of each financial year.
***
## Who uses this feature
| Role | What they do |
| ---------------- | ---------------------------------------------------------------------------------------------------------- |
| **CS Executive** | Opens the audit, completes the checklist area by area, records observations, and prepares the draft report |
| **CA Partner** | Reviews the draft, finalises the report, digitally signs Form MR-3, and submits it |
***
## Before you start
* The client must have an active CA Engagement and must meet at least one of the mandatory audit thresholds above.
* All board meeting records for the audit period should be completed and minutes approved in the system.
* ROC filing records for the audit period (especially SRN Received status) should be up to date.
* Statutory registers for the period (Members, Directors, Charges, etc.) should be current.
* Director KYC (DIR-3 KYC) records for the year should be available.
* Start the audit at least 60 days before the AGM date to leave time for the company to remedy any gaps before the report is finalised.
***
## Create a secretarial audit record
**Path:** CA Practice Management → ROC and Company Law → Secretarial Audit → New
1. Select the **Client Engagement** for the company.
2. Select the **Financial Year** being audited.
3. Enter the **Auditor Name** (the name of the practising Company Secretary signing the report).
4. Set **Audit Period From** and **Audit Period To** (usually 1 April to 31 March for the financial year).
5. Save. The record is created with status `Initiated` and the auto-name is assigned. The checklist items are populated automatically based on the company type and applicable laws.
***
## Work through the audit checklist (CS Executive)
1. Open the audit record and click **Start Audit**. The status moves to `In Progress`.
2. Open the **Secretarial Audit Checklist** tab. You will see one row for each compliance area. Work through each row.
3. For each item, set the **Compliant** column to `Yes`, `No`, or `NA` (not applicable).
4. Enter your findings in the **Observations** column and any additional detail in **Remarks**.
5. The **Checklist Score** at the top of the record updates automatically as you save each row. It shows the percentage of applicable items (excluding NA) marked as `Yes`.
***
## Checklist coverage
The audit checklist covers the following compliance areas. All applicable items must be completed before moving to draft report.
| Area | Key compliance items checked |
| ------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| **Companies Act** | Board meetings held with proper notice and quorum; minutes maintained; statutory registers updated; charges filed; annual filings made (AOC-4, MGT-7, ADT-1) |
| **Secretarial Standards** | SS-1 (Board Meetings) and SS-2 (General Meetings) compliance across all meetings in the period |
| **Director KYC** | DIR-3 KYC filed for every director by 30 September |
| **Beneficial Ownership** | BEN-1 (declaration by significant beneficial owner) and BEN-2 (return of significant beneficial owner) filed as applicable |
| **MSME Payments** | Payments to MSME vendors made within 45 days of acceptance; MSME Form I filed half-yearly if defaults occurred |
| **Deposits** | DPT-3 (return of deposits) filed if the company accepted or had deposits |
| **SEBI Regulations** | For listed companies: compliance with SEBI LODR (Listing Obligations and Disclosure Requirements), Insider Trading Regulations, and related quarterly and annual filings |
| **FEMA** | Foreign investment reporting (FC-GPR, FC-TRS), ECB filings, and ODI forms as applicable |
| **Labour Laws** | Provident Fund, ESI, Shops and Establishments Act, and Contract Labour Act compliance |
| **Environmental Laws** | Applicable environmental consents and returns (for manufacturing or industrial clients) |
***
## Prepare the draft report (CS Executive)
After completing the checklist:
1. Review all items marked `No`. These will become either qualifications or observations in the report.
2. Enter any formal qualifications in the **Qualifications** field. A qualification is a matter where the company has not complied and the non-compliance is material enough to be reported as a specific finding in the MR-3 report.
3. Enter other notable items (complied with but worth flagging) in the **Observations** field.
4. Enter suggested improvements in the **Recommendations** field. Recommendations are advisory and do not form part of the formal MR-3 report, but they are useful to share with the client.
5. Click **Create Draft Report**. The status moves to `Draft Report`.
Keep the draft report internal until the CA Partner has reviewed it. Do not share it with the client or the company's management team at this stage, as the partner may need to reclassify items between qualifications and observations.
***
## Finalise and submit the report (CA Partner)
1. Open the audit record in `Draft Report` status.
2. Review the checklist score, the qualifications, the observations, and the recommendations.
3. If the report needs significant changes, click **Rework**. The status returns to `In Progress` and the CS Executive is notified.
4. If the report is accurate, prepare the signed Form MR-3 outside the system (using the statutory template from the MCA website), attach it to the record using the **Report Attachment** field.
5. Click **Finalize Report**. The status moves to `Final Report`.
6. Click **Submit Report**. The status moves to `Submitted`.
The submitted report is then attached to the company's MGT-7 filing. See [ROC Filings](/professional-services/ca-practice-management/roc-filings) for instructions on including the report in the MGT-7.
***
## Field guide
| Field | Description/Purpose |
| --------------------- | ------------------------------------------------------------------------------------------------------ |
| **Client Engagement** | The CA Engagement for the company being audited |
| **Financial Year** | The financial year covered by this secretarial audit (for example, 2024-25) |
| **Auditor Name** | Name of the practising Company Secretary who will sign Form MR-3 |
| **Audit Period From** | Start date of the audit period (usually 1 April) |
| **Audit Period To** | End date of the audit period (usually 31 March) |
| **Status** | Current stage in the Secretarial Audit Workflow |
| **Checklist Score** | Percentage of applicable checklist items marked as compliant; auto-calculated from the checklist table |
| **Qualifications** | Formal findings of non-compliance that are reported in the MR-3 report |
| **Observations** | Matters noted during the audit that are not formal qualifications but are worth recording |
| **Recommendations** | Advisory suggestions for the company to improve compliance; not included in the MR-3 |
| **Report Attachment** | The signed Form MR-3 secretarial audit report; uploaded by the CA Partner before finalising |
### Checklist table fields
| Field | Description/Purpose |
| ---------------- | ------------------------------------------------------------------ |
| **Area** | The compliance category (for example, Companies Act, SEBI, FEMA) |
| **Requirement** | The specific compliance obligation being checked |
| **Compliant** | Whether the company has complied: Yes, No, or NA (not applicable) |
| **Observations** | Findings for this specific checklist item |
| **Remarks** | Additional detail, document references, or context for the finding |
***
## Workflow journey
```mermaid theme={null}
%%{init: {'theme':'base','themeVariables':{'fontFamily':'DM Sans','primaryColor':'#e7fdf6','primaryBorderColor':'#14f1b1','primaryTextColor':'#0f172a','lineColor':'#14f1b1'}}}%%
flowchart LR
A[Initiated] -->|Start Audit - CS Executive| B[In Progress]
B -->|Create Draft Report - CS Executive| C[Draft Report]
C -->|Rework - CA Partner| B
C -->|Finalize Report - CA Partner| D[Final Report]
D -->|Submit Report - CA Partner| E[Submitted]
```
### Role at each step
| Step | Action | Role |
| ---- | ------------------------------------------------------------------------------- | ------------ |
| 1 | Open the audit record | CS Executive |
| 2 | Work through the checklist; record observations | CS Executive |
| 3 | Complete qualifications, observations, and recommendations; create draft report | CS Executive |
| 4 | Review the draft; rework if needed or finalise | CA Partner |
| 5 | Attach the signed MR-3 and submit | CA Partner |
***
## Notifications and alerts
| Trigger | What happens |
| -------------------------------------------------------------------- | ------------------------------------------------------------------------------- |
| **AGM is 60 days away and no secretarial audit exists for the year** | CA Manager receives an alert to open the audit for the client |
| **AGM is 30 days away and status is still Initiated or In Progress** | CA Partner receives an escalation to follow up with the CS Executive |
| **Draft Report created** | CA Partner receives an in-app notification to review the report |
| **Rework requested** | CS Executive receives a notification with the partner's reason for rework |
| **Report submitted** | A task is created for the CA Manager to attach the MR-3 to the MGT-7 ROC Filing |
***
## Workspace access
**Path:** CA Practice Management → ROC and Company Law → Secretarial Audit
The workspace section shows:
* Audits in progress for the current financial year (quick list)
* Audits not yet started for clients who are past the 60-day pre-AGM threshold (number card)
* Average checklist score across all submitted audits (metric)
* Audits by status for the year (chart)
***
## Best practices
* **Start the audit at least 60 days before the AGM.** The checklist typically surfaces a few compliance gaps. The company needs time to remedy them (for example, filing a missed DIR-3 KYC or updating a statutory register) before the report is finalised. A clean checklist is far easier to report than a set of qualifications.
* **Complete the checklist fully before writing qualifications.** The checklist score helps you see the overall picture before you draft findings. Writing qualifications without completing the checklist risks missing areas that should also be qualified, or over-qualifying areas that are actually compliant.
* **Keep the draft report internal until the partner has reviewed it.** If the company's management sees a draft with provisional qualifications that the partner later downgrades to observations, it creates unnecessary alarm and undermines confidence in the process.
* **Never submit without the partner's digital signature on the MR-3.** The report has no legal standing without the practising Company Secretary's signature and their Certificate of Practice number. The Report Attachment field should contain the fully signed PDF before you click Submit Report.
* **Use the Recommendations field for advisory findings.** Items that are technically compliant but handled poorly (for example, minutes circulated late, quorum met by a narrow margin) should go in Recommendations rather than Qualifications. This keeps the formal report focused on actual non-compliance and gives the company a clear action list without inflating the findings.
* **Cross-check the checklist against the statutory registers in the system.** The Statutory Registers module records Members (MGT-1), Directors, Charges, and Contracts. Use those records to verify the checklist items for register maintenance rather than relying solely on documents provided by the company.
* **Mark SEBI-related rows as NA for non-listed companies.** The checklist includes SEBI rows for comprehensiveness. For private companies and unlisted public companies, mark all SEBI items as NA before calculating the checklist score, so the score reflects only applicable laws.
***
## Related features
* [Board Meetings](/professional-services/ca-practice-management/board-meetings): Meeting records are a key source for the secretarial audit checklist (SS-1, SS-2 compliance, quorum, minutes maintenance)
* [ROC Filings](/professional-services/ca-practice-management/roc-filings): The submitted MR-3 report is attached to the MGT-7 annual return
* [Client Engagements](/professional-services/ca-practice-management/client-engagements): Confirms the client's size thresholds and applicable laws
* [Feature Overview](/professional-services/ca-practice-management/feature-overview): Full list of modules and how they connect