A very pertinent question which arises for consideration is the extent of detailed verification that has to be resorted to before certifying the Annual Return. Being a Company Secretary, list the guiding principles which

The Company Secretary is required to be considerably responsible, since he is bound by the certification in the Annual Return. A very pertinent question which arises for consideration is the extent of detailed verification that has to be resorted to before certifying the Annual Return. Proper techniques of sample checking and test checking should be resorted to before forming a reasonable opinion. There are no specific modalities or stringent test practices applicable for certification of Annual Return. However, the following guiding principles can be adopted while deciding about the extent of checking that is required: Internal Control and Checks: The need for detailed checking is greatly reduced if a Company Secretary confirms that there are adequate measures of internal control and checks and balances built into the systems and procedures of the organization. For instance, the procedure for registration of share transfers could be so designed that the mistakes and errors committed at one stage are automatically detected and corrected by another, before the whole process is complete. The system could also provide for automatic cross-verification particularly in cases where the process is computerized. Principle of Materiality: The principle of materiality is another important concept. The sample chosen for detailed checking should be representative of the population, in statistical parlance. Referring the example of share transfers again, instances of transfer of large blocks of shares could be chosen for detailed scrutiny. The busy period for transfer of shares in the year could also be identified and selected for sample checking. High Risk Areas: 'High risk' areas could be identified and subjected to more extensive scrutiny than others. For instance, in the case of shares on which there are restrictions on transfer statutory or otherwise, a more extensive examination is warranted. In conclusion, it may be pointed out that the ultimate responsibility of the document certified will rest with the professional. While the extent of checking is a matter of personal judgment, he should safeguard himself against any possible charge of negligence in respect of inaccurate or incomplete statements, certified by him.