Audit Committee: Section 177 Of The Companies Act, 2013
- IJLLR Journal
- 1 day ago
- 1 min read
Jayapriya S, LLM, Hindustan Institute of Technology and Science
ABSTRACT
In order to improve corporate governance and guarantee financial transparency in businesses, the Audit Committee is essential. Section 177 of the Companies Act of 2013 mandates that specific classes of businesses establish an Audit Committee to oversee internal control, financial reporting, and auditing procedures. In order to stop fraud, safeguard shareholder interests, and guarantee corporate management accountability, the committee functions as an independent body inside the Board of Directors.
With reference to Tata Consultancy Services Ltd. and Satyam Computer Services Ltd., this essay examines the function and efficacy of the Audit Committee. Tata Consultancy Services serves as an example of sound corporate governance in which the Audit Committee actively examines financial statements, oversees auditors, and upholds an efficient vigil mechanism. On the other hand, the 2009 Satyam affair serves as a stark reminder of the repercussions of the Audit Committee's failure, as inadequate oversight led to one of India's largest corporate frauds.
The study looks at the Companies Act of 2013's legal framework for audit committees and assesses how well they really operate in business organizations. It also covers the significance of whistleblower procedures, internal audit systems, and independent directors in guaranteeing the committee's efficient operation.
The study comes to the conclusion that the Audit Committee is a crucial tool for upholding openness, stopping financial malfeasance, and boosting investor confidence. However, unless the committee operates autonomously and responsibly, simply legislative conformity is insufficient. To increase the efficacy of Audit Committees in India, stronger enforcement, professional knowledge, and accountability systems are required.
Keywords: Audit Committee, Corporate Governance, Companies Act, 2013, Independent Directors, Financial Transparency, Corporate Fraud.
