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[CS Professional Tips] – Secretarial Audit, Compliance Management and Due Diligence

Secretarial Audit, Compliance Management and Due Diligence is one of the papers placed under Module II of the CS Professional program. The core areas covered are Secretarial Auditing principles and techniques along with a detailed analysis of the Compliance Management framework. In this article, we will be discussing some relevant study tips that will help you prepare for the paper of Secretarial Audit, Compliance Management and Due Diligence well and score good marks.

1. The Relevance of this subject 
2. Preparation Strategy
3. Hours a day should you study this paper

Overview of the Subject:

  • Secretarial Audit is a process to check compliance with the provisions of various laws and rules/regulations/procedures, maintenance of books, etc. by an independent professional to ensure that the company has complied with the legal and procedural requirements and also followed the due process.
  • Compliance Management is the method by which corporate manage the entire compliance process. It includes the compliance program, compliance audit, etc. and in other words, it is called a compliance solution.
  • Due Diligence is an investigative process for providing the desired comfort level about the potential investment and to minimize the risks such as hidden uncovered liabilities, poor growth prospects, etc.

Moreover, this subject is divided into two parts:

  • Part I: Compliance Management (40 marks)
  • Part II: Secretarial Audit and Due Diligence (60 marks)


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The relevance of this subject and objective of ICSI behind introducing the paper:

To ensure that proper and effective governance practices are adhered to by the corporates, the conduct of the secretarial audit and the existence of proper compliance management framework is very crucial. Therefore a CS, being entrusted with the duties of the same is required to possess the required knowledge and relevant skill-sets to meet the high expectations of the management. From that perspective, this paper has an important role to play. The objective of ICSI : 

  • Part I: To develop expertise in Compliance management, Internal Control systems, and preparation of various search and status reports.
  • Part II: To develop expertise in Secretarial Audit and other Audits and to impart knowledge on the process for conducting Due Diligence of various business transactions.

Preparation Strategy for Secretarial Audit, Compliance Management and Due Diligence:

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The most important thing that you need to focus on while dealing with a subject like this is that you have to prepare your summary notes and be habituated with properly written practice. The summary notes are only going to help you understand and learn the topics efficiently. You have to understand that the fact that the ICSI study material has about 487 pages speaks volumes about the smart work you require to do while preparing for the subjects. You have to study a total of nine papers and it is not possible to learn the entire module, therefore the relevance of the summary notes is very high. The goal shall always be to correctly attempt the entire hundred marks in the examination as that will increase your odds to score great marks. Summarise only that much so that you can learn the same and replicate it in your answer sheet. Don’t overdo it.

  • Studying Part II of the paper:  You shall begin your preparations from Part II of the paper as most of the topics covered here are nothing new for you given the fact you are a CS Final student. Lesson 8 to Lesson 14 of the ICSI module covers some topics that have already been part of the Executive Programme (for e.g. Audit, Secretarial Audit, Internal Audit, Audit Engagement, Audit Documentation, etc.). After completing these topics move towards Lesson 19 and 20, these topics deal with Due Diligence and are very important and you can expect questions being framed in your examination from this topic. The remaining portions shall then be taken up. Remember not to skip any topic of the module, cover each and every topic and for the topics you are not comfortable with, summarize it and then study. However, in the process, do not forget to maintain the theme of the topic.
  • Studying Part I of the paper:  The Topics covered under this part of the paper are focused to develop your understanding of the Compliance Management Framework, Compliance management approaches, and various systems for the same. Topics such as KYC norms, Search and status report and documentation involved, signing and certification by a company secretary including professional misconduct and its consequences has been covered here. There are seven lessons under this part and make it clear that ICSI doesn’t want you to mug up everything and write the answers in the exams. If you can reflect through your answers that you have the conceptual clarity that ICSI expects you to have then you can easily score really well. Therefore place relevance on your summarization skills.

How many hours a day should you study this paper:

Nobody can predict the exact number of hours one must study per day in order to excel at any examination. No. of hours of study per day is actually a relative concept that depends on person to person with their areas of strength and weaknesses playing an important part. Importance shall also be given to quality over quantity. However, where one is unsure and confused about their strategy, one may refer to the following strategy and improvise it as per their convenience:

  • Study the subject at least three days a week investing at least two and a half hours a day.
  • Keep one day for revising and learning the topics covered in the aforesaid three days

Therefore, four days a week would surely be enough to prepare this subject.

Highlights of the Article:

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