Direct Tax
Consulting
ESG Advisory
Indirect Tax
Growth Advisory
Internal Audit
BFSI Audit
Industry Audit
Valuation
RBI Services
SEBI Services
IRDA Registration
AML Advisory
IBC Services
NBFC Compliance
IRDA Compliance
Finance & Accounts
Payroll Compliance Services
HR Outsourcing
LPO
Fractional CFO
General Legal
Corporate Law
Debt Recovery
Select Your Location
The Ministry of Corporate Affairs or MCA issued the Companies (Auditor’s Report) Order or CARO 2020 in supersession of Companies (Auditor’s Report) Order 2016 vide Notification dated 25.02.2020. It will come into force from the date of its publication in the Official Gazette. MCA after consulting the National Financial Reporting Authority, which was constituted under Section 132 of the Companies Act, 2013 replaced the existing Companies (Auditors Report) Order, 2016 by CARO 2020. CARO 2020 applies to all the companies, including foreign companies. According to this order, every report of the auditor prescribed in Section 143 of the Companies Act, 2013 must contain the matters as specified in paragraphs 3 and 4 of the order. This rule will not apply in case of consolidated financial statements of the auditors. Basically, CARO 2020 is introduced to bring financial discipline in audits. The Government, through this regulation, has asked the auditors to provide details like loans given by the company, to report the complaints of the whistle-blower, and to assess the internal audit mechanism of firms. CARO 2020 applies to all companies except those mentioned in its negative list. The rules will apply to the audit reports for the financial years commencing on or after April 1, 2019.
Table of Contents
The auditor’s report on the accounts of a company on which CARO 2020 applies shall include a statement on the following matters:-
Reports related to Nidhi Company compliances to meet out the liability:
• The ratio of Net owned funds to deposits must be 1:20.
• Maintenance of term deposits.
• Default in payment of interest on deposits or repayment (if any).
The CARO 2020 is expected to improve the overall quality of reporting by the Auditors on the financial statements of the companies which will lead to greater transparency and faith in the financial affairs of the companies. This is automatically expected to bring a greater inflow of investment by and in Indian companies. Auditors are now required to comment on 21 matters in CARO 2020 including sub-clauses, as against 16 matters in 2016. The clauses of CARO 2016 have been redrafted to ask the auditors to provide details such as immovable properties whose title deeds are not held in the name of the company but are disclosed in the financial statements.
Also, Read: CARO 2016- Applicability & Reporting Requirements.
A joint venture is a strategic business arrangement in which two or more companies collaborate...
With the rising inflation rates and various other economic factors, wealthy Americans are incre...
Before approaching the new suppliers or any other third parties, you should always go for the v...
With the increasing landscape of Fintech Companies, it is increasingly vital that fintech compl...
This blog gives a detailed description through an audit report for industrial waste by examinin...
Are you human?: 4 + 8 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
Many a times the investor gets cheated by the companies because of the mismanagement and frauds committed by the co...
10 Sep, 2022
A Turkish entity can be registered by a non-resident of any nationality. Thus it can be wholly foreign-owned also....
31 Mar, 2023
Chat on Whatsapp
Hey I'm Suman. Let's Talk!