The importance of Corporate Governance in ensuring sound financial reporting and in deterring frauds has gained growing recognition in recent years and the presence of an efficient and independent Audit Committee is considered a central cog in this wheel.
In India, the constitution of an Audit Committee has generally been prescribed as a part of Corporate Governance mechanism to be followed by the “listed” corporations, under clause 49 of the Listing Agreement, and by certain “public” corporations under the Companies Act, 1956.