Bharat’s Companies ( Auditor’s Report Order, 2020 (CARO) In Accordance with ICAI’s Guidance Note On CARO by Kamal Garg Edition 2023

Bharat’s Companies ( Auditor’s Report Order, 2020 (CARO) In Accordance with ICAI’s Guidance Note On CARO by Kamal Garg Edition 2023

Bharat’s Companies ( Auditor’s Report Order, 2020 (CARO) In Accordance with ICAI’s Guidance Note On CARO by Kamal Garg Edition 2023

About COMPANIES (AUDITOR’S REPORT) ORDER, 2020 (CARO)

1. The Central Government, in exercise of the powers conferred, under subsection (11) of section 143 of the Companies Act, 2013 (hereinafter referred to as “the Act”), issued the Companies (Auditor’s Report) Order, 2020, (CARO, 2020/ “the Order”) vide Order No. S.O. 849(E) dated 25th February 2020. CARO, 2020 contains certain matters on which the auditors of companies (except auditors of those categories of companies which are specifically exempted under the Order) have to make a statement in their audit report. The text of the CARO, 2020 is given in Appendix I to this Guidance Note.

2. This Order is in supersession of the earlier Order issued in 2016, viz., the Companies (Auditor’s Report) Order, 2016 (CARO 2016). Appendix II to this Guidance Note contains a clause-by-clause comparison of the reporting requirements of the Order and the erstwhile CARO 2016.

3. The purpose of this Guidance Note is to enable the members to comply with the reporting requirements of the Order. It should, however, be noted that the clarifications and explanations contained in this Guidance Note are not intended to be exhaustive and the auditors should exercise their professional judgment and experience on various matters on which they are required to report under the Order.

Appendix III to this Guidance Note contains the Definitions of various terms used in this Guidance Note. Appendix VI to this Guidance Note contains List of Important Sections/ Rules/ Regulations/ Statutes referred to in this Guidance Note. (..contd… for complete text please refer above attachment)

The MCA has issued the Companies (Auditor’s Report) Order, 2016 (CARO, 2016) which is applicable for audits of financial statements for periods beginning on or after April 1, 2015. The CARO 2016 contains several new / modified reporting requirements vis-a-vis the CARO 2003 / CARO 2015.

Accordingly the ICAI, with a view to provide appropriate guidance to it’s members, has brought out Guidance Note on the Companies (Auditor’s Report) Order, 2016. This Guidance Note has been written in an easy to understand language and contains detailed guidance on various Clauses of CARO 2016 and the various issues and intricacies involved therein, so that the requirements and expectations of the Order can be fulfilled in letter and spirit by the auditors. It’s a comprehensive and self contained reference document for the members.

However, it may be noted that the purpose of this Guidance Note is only to enable the members to comply with the reporting requirements of the Order. The clarifications and explanations contained in this Guidance Note are not intended to be exhaustive and the auditors should exercise their professional judgment and experience on various matters on which they are required to report under the Order.