The response obligation covers both specified reports
Companies Act section 134(3)(f) requires the Board's report to contain explanations or comments on every qualification, reservation, adverse remark or disclaimer made by the auditor in the audit report and by the practising company secretary in the secretarial audit report. This article, checked on 28 October 2026, addresses that response file where the reporting requirement applies. It is not a substitute for establishing whether a company requires secretarial audit or an abridged Board report. Companies Act: section 134(3)(f), (3A), (4) and (6).
Build a remark-wise inventory
Use the final signed reports rather than an earlier draft or an informal audit-issues tracker. Identify each relevant remark, the report and paragraph, affected period, factual assertion and any stated financial amount. A management-letter point is not automatically the same statutory reporting item. Equally, a disclaimer cannot be omitted merely because it is not labelled qualification. Companies Act: section 134(3)(f), (3A), (4) and (6).
Explain the position rather than promising a clean opinion
A useful response distinguishes agreed facts, disputed facts, management's explanation, corrections already recorded and steps still pending. Do not describe a proposed adjustment as completed, or claim that a Board explanation changes the auditor's issued opinion. If the matter remains unresolved, preserve that status and the actual responsible person's action plan without inventing a statutory cure period. Companies Act: section 134(3)(f), (3A), (4) and (6).
Separate accounting correction from disclosure
A ledger correction can address a quantified misstatement while leaving a process weakness unresolved. A legal filing default can require operational remediation even where the profit-and-loss effect is zero. Conversely, a response paragraph does not itself post an accounting entry. Reconcile the response to the approved financial statements and underlying statutory records so its amounts and status remain consistent. Companies Act: section 134(3)(f), (3A), (4) and (6).
Control overlap between reports
One underlying event may appear in both financial and secretarial audit reporting. Map both references and explain how the Board has addressed each. Do not count the same payment or liability twice when summarising exposure, but do not use de-duplication to omit the required response to a distinct remark. Keep disputed financial consequences separate from amounts established by evidence. Companies Act: section 134(3)(f), (3A), (4) and (6).
Review applicability and finalisation separately
Section 134(3A) permits prescribed abridged reports for OPCs and small companies, and subsection (4) specifically addresses an OPC report. Apply the company's actual reporting framework; this is not a universal full-Board-report checklist. The ordinary section 134(3)(f) response process described here should be coordinated with Board approval and applicable signing requirements. Final reports, Board responses and later remediation evidence should remain linked rather than replacing the historical signed record. Companies Act: section 134(3)(f), (3A), (4) and (6).
Applicable primary references
Companies Act: section 134(3)(f), (3A), (4) and (6)
Companies Act, 2013, section 134, ICSI statutory e-book
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: Two report streams
A company's applicable financial audit report has four relevant remarks and secretarial audit report has three. The response register needs seven report-linked entries. This count does not imply seven different underlying events.
Illustrative example 2: One exposure appears twice
A ₹5,00,000 unresolved statutory-dues matter is referred to in both reports. There are two reporting references but one identified ₹5,00,000 principal exposure, not ₹10,00,000. Respond to both references and reconcile any different descriptions.
Illustrative example 3: Partial correction
A quantified ₹12,00,000 misstatement has supported corrections of ₹9,00,000 before finalisation. The arithmetic unresolved difference is ₹3,00,000. Do not claim full correction or infer the final audit opinion from that subtraction.
Illustrative example 4: Action is not completion
Six documented remediation actions comprise two completed, three in progress and one not started. Four remain incomplete. The Board response should preserve those distinctions instead of calling all six resolved because owners were allocated.
Illustrative example 5: Amounts and process findings differ
A ₹8,00,000 accounting adjustment and a separate process recommendation arise from one remark. Recording the ₹8,00,000 entry does not quantify or close the process recommendation. If ₹3,00,000 of that entry was already posted, the additional entry is ₹5,00,000, not another ₹8,00,000.
Illustrative example 6: Draft-to-final reconciliation
An audit tracker contained ten proposed points. The final signed report contains seven relevant remarks, including two newly worded matters. If five final remarks match earlier entries, add the two new entries and review the five matches; do not blindly publish responses to all ten draft points as if they were the final report.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Establish company applicability | Ordinary, abridged or OPC reporting analysis |
| 2 | Obtain final reports | Signed statutory and applicable secretarial reports |
| 3 | Identify covered remarks | Qualifications, reservations, adverse remarks and disclaimers |
| 4 | Map each paragraph | Report, period and underlying issue identifiers |
| 5 | Reconcile financial effects | Ledger entries, liabilities and duplicate references |
| 6 | Record the factual explanation | Evidence, disagreement and unresolved points |
| 7 | Distinguish planned and completed action | Owners, status and actual completion proof |
| 8 | Check consistency with accounts | Approved figures and subsequent changes |
| 9 | Complete Board approval and signing review | Applicable authority and final report version |
| 10 | Retain the response trail | Published report, supporting papers and later remediation |
Sixteen practitioner FAQs
1. Which provision requires the response?
Section 134(3)(f), within the company's applicable Board-report framework.
2. Does it cover the statutory auditor alone?
It also names the practising company secretary's secretarial audit report.
3. Does this mean every company requires secretarial audit?
No. Establish that requirement separately.
4. Are disclaimers within the wording?
Yes, alongside qualifications, reservations and adverse remarks.
5. Should the final report or draft tracker be used?
Ground the inventory in the final signed report.
6. Is every management-letter point automatically a section 134(3)(f) remark?
No. Identify the actual statutory-report remark and applicable reporting requirement.
7. Does a Board explanation remove an audit qualification?
No. It does not rewrite the auditor's issued report.
8. Can a proposed correction be called completed?
Only describe actual supported completion; preserve pending status otherwise.
9. Can the Board disagree with a factual assertion?
Record the actual explanation and supporting evidence rather than implying unproved resolution.
10. Must duplicate report references be ignored?
No. Map both while avoiding duplicate exposure totals.
11. Does zero quantified financial impact mean no response is needed?
No. A covered remark may concern a compliance or process matter.
12. Does a response itself amend the ledger?
No. Accounting entries and disclosure are separate actions.
13. Does the Act provide one universal cure period here?
No universal cure period is asserted in this guide; other applicable provisions may impose deadlines.
14. Are OPC and small-company reports identical to every other report?
No. Review subsection (3A), subsection (4) and the applicable prescribed framework.
15. Should later action overwrite the original signed response?
Preserve the historical record and link subsequent action evidence.
16. What makes the closing file useful?
A remark-to-response matrix with consistent figures, approval evidence and support for each stated status.
Conclusion
Link each statutory or secretarial audit qualification, reservation, adverse remark or disclaimer to a specific Board response and supported corrective-action record.