Role & comparision of audit committee - tradecareer

 Additional Role of Audit Committee in LODR: The role of the Audit Committee 

includes the following:

* Oversight of company's financial reporting process & disclosure of financial 

information.

* Recommending to the Board appointment, re-appointment and the replacement or 

removal of the statutory auditor and the fixation of audit fees.

* Approval of payment to statutory auditors for any other services rendered.

* Reviewing, with the management, the annual or quarterly financial statements 

before submission to the board for approval.

* Reviewing, with the management, performance of statutory and internal auditors, 

and adequacy of the internal control systems.

* Reviewing the adequacy of internal audit function.

* Scrutiny of inter-corporate loans and investments.

* Valuation of undertakings or assets of the listed entity, wherever it is necessary.

* Evaluation of internal financial controls and risk management systems.

* Discussion with internal auditors of any significant findings and follow up.

* Discussion with statutory auditors before the audit commences, about the nature 

and scope of audit.

* Review of utilization of loans/advances/investment by the holding company in the 

subsidiary exceeding Rs. 100 crore or 10% of the asset size of the subsidiary, 

whichever is lower. (Effective from: 1st April 2019)

                                                                     


Comparison of Audit Committee under Companies Act, 2013 and SEBI (LODR) 

Regulation, 2015

* LODR requires that all members of Audit Committee shall be financially literate and 

at least one member shall have accounting or related financial management 

expertise whereas the Companies Act, 2013 provides for majority of members of 

Audit Committee including its Chairperson shall be persons with ability to read and 

understand, the financial statement.

* The Regulations requires 2/3rd of members of the Audit Committee to be 

independent whereas Companies Act, 2013 requires majority of members to Audit 

Committee to be independent.

* The role of Audit Committee under the Regulations is wider.

* The Companies Act, 2013 does not prescribe that the Chairman shall be an 

independent Director.

* The Companies Act, 2013 does not provide for frequency of meeting of the Audit 

Committee.

* The Companies Act, 2013 does not provide for quorum for Audit Committee 

meeting.

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