Growing relevance of Audit Committee and IDs

For boosting corporate governance framework

– Pammy Jaiswal, Partner | pammy@vinodkothari.com

Background

In the era where the regulators are constantly bringing amendments to secure the stake and protect the interest of shareholders (including the stakeholders), it becomes imperative to understand the role, function and relevance of one such board committee being the ‘Audit Committee’ (hereinafter referred to as the ‘AC’) which has been given the responsibility to oversee and monitor several crucial matters after the board of directors. These functions are in the nature to ensure transparency and accountability (pillars of corporate governance) to a large extent. It has been seen in several cases in the past that lapses on the part of this committee often leads to major scams and corporate scandals.

In this paper, the author has tried to explain the idea and intent of the law makers behind introducing the concept of the AC, its expected role and function in ensuring and boosting corporate governance given the terms of reference suggested under applicable laws in India with a brief global comparison.

The entire Paper as was published by SSRN can be read here