"Secretarial Audit is to be on the principle of 'Prevention is better than cure' rather than a post mortem exercise and to find faults". Explain.

The provisions of Secretarial Audit has been provided under Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Managerial Personnel) Rules, 2014. It is the process of independent verification, examination of level of compliance of applicable Corporate Laws to a company. The audit process if properly devised ensures timely compliance and eliminates any un-intended non-compliance of various applicable rules and regulations. An action plan of the Corporate Secretarial Department is to be designed so as to ensure that all event based and time based compliances are considered and acted upon. Secretarial Audit is to be on the principle of "Prevention is better than cure" rather than post mortem exercise and to find faults. Broadly, the need for Secretarial Audit is understood from the following points: Effective mechanism to ensure that the legal and procedural requirements are duly complied with. Provides a level of confidence to the directors & Key Managerial Personnel etc. Directors can concentrate on important business matters as Secretarial Audit thereby ensuring legal and procedural requirements. Strengthening the image and goodwill of a company in the minds of regulators and stakeholders Secretarial Audit is an effective governance and compliance risk management tool. It helps the investor in analyzing the compliance level of companies, thereby enhancing the reputation of the Company.