2. |
(a) |
A public limited company has assigned you, as the Company Secretary in Practice, the work of pre-certification of documents. The following events have taken place. Draft check-lists for the purpose:
(i) | A special resolution has been passed at an annual general meeting for amendment in the articles of association. |
(ii) | Certain properties of the company are mortgaged to secure a series of debentures. |
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(6 marks each) |
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(b) |
A Company Secretary in Practice has been appointed as an authority to investigate into the compliance of the SEBI (Prohibition of Insider Trading) Regulations, 1992. Discuss the audit procedure and the audit points to be scrutinised by the Company Secretary in Practice. |
(8 marks) |
3. |
(a) |
In what way can the secretarial audit be used as a tool for good governance of companies? |
(8 marks) |
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(b) |
Explain briefly the salient points to be checked for certification of securities transfers in compliance with the directives of the stock exchanges in respect of the following:
— Clause 3C; and
— Clause 16 of the listing agreement. |
(6 marks) |
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(c) |
Prepare a check-list of audit points during the course of internal audit of depository participants' records in regard to rematerialisation of securities. |
(6 marks) |
PART—B |
(Answer Question No.7 which is compulsory and any two of the rest from this part.) |
4. |
(a) |
"Management audit is a vague concept and serves no material purpose and a review of past managerial actions and decisions would stifle the initiative- and dynamism of managers." Discuss with reference to the nature, scope and coverage of management audit. |
(10 marks) |
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(b) |
Suggest the remedial measures to be taken in respect of the following deficiencies:
(i) | Strategies for the department are vague if not non-existent and there is no systematic planning in regard to purchase and materials management. |
(ii) | Reliable and timely data is not made available to the management and adequate reports, returns are not generated and made available regarding capacity utilisation, lead times in production, quality control, scrap, wastage, salvage, etc. |
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(5 marks each) |
5. |
(a) |
What observations the auditors are required to make under the Companies (Auditor's Report) Order, 2003, as amended, in respect of 'related party transactions'? |
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(b) |
What are the objectives of cost audit when it is being taken up on behalf of the management? |
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(c) |
"Excess inventories are termed as graveyards of business." Is it correct? Support your answer with necessary justifications. |
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(d) |
Differentiate between 'cost audit' and 'management audit'. |
(5 marks each) |