Sebi revised norms: Sebi updates audit committee norms for MIIs

The regulator said the audit committee of the MII should not have any executive director including the managing director. The auditors of the MII and the key management personnel (KMP) would have a right to be heard in the meetings of the audit committee when it considers the auditors’s report but would not have the right to vote, it said . Further, whenever required, the KMPs could be invited to attend the audit committee meetings with the permission of the chair but would not have the right to vote.

“The terms of reference of the audit committee amongst others involves approval of related-party transactions, scrutiny of financial statements, evaluation of internal financial controls and risk management systems, etc which requires objective evaluation of the functioning and decisions of the management,” Sebi said.

Sebi also said MIIs should conduct internal audit of functions and activities at least once in a financial year. Besides, internal auditor should be an independent audit firm and report only to the audit committee.