MCA notifies the Companies Auditor’s Report Order (CARO), 2020 to amend/ supersede the reporting requirements envisaged in CARO, 2016 and to prescribe certain new reporting requirements. CARO 2020 is notified as applicable from Financial Year 2019-20, however, MCA has subsequently deferred applicability thereof to FY 2020-21 vide Order dt. 24th March 2020.
MCA Notifies CARO 2020 (Companies Auditor’s Report Order, 2020) vide Order dt. 25 Feb. 2020
S.O. (E).- In exercise of the powers conferred by sub-section (11) of section 143 of the Companies Act, 2013 (18 of 2013 ) and in supersession of the Companies (Auditor’s Report) Order, 2016, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide number S.O. 1228 (E), dated the 29th March, 2016, except as respects things done or omitted to be done before such supersession, the Central Government, after consultation with the National Financial Reporting Authority constituted under section 132 of the Companies Act, 2013, hereby makes the following Order, namely:-
1. Short title, application and commencement. –
(1) This Order may be called the Companies (Auditor’s Report) Order, 2020.
(2) It shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2013 (18 of 2013) [hereinafter referred to as the Companies Act], except–
(i) a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(ii) an insurance company as defined under the Insurance Act,1938 (4 of 1938);
(iii) a company licensed to operate under section 8 of the Companies Act;
(iv) a One Person Company as defined in clause (62) of section 2 of the Companies Act and a small company as defined in clause (85) of section 2 of the Companies Act; and
(v) a private limited company, not being a subsidiary or holding company of a public company, having a paid up capital and reserves and surplus not more than one crore rupees as on the balance sheet date and which does not have total borrowings exceeding one crore rupees from any bank or financial institution at any point of time during the financial year and which does not have a total revenue as disclosed in Scheduled III to the Companies Act (including revenue from discontinuing operations) exceeding ten crore rupees during the financial year as per the financial statements.
(3) It shall come into force on the date of its publication in the Official Gazette.
2. Auditor’s report to contain matters specified in paragraphs 3 and 4.-
Every report made by the auditor under section 143 of the Companies Act on the accounts of every company audited by him, to which this Order applies, for the financial years commencing on or after the 1st April, 2019, shall in addition, contain the matters specified in paragraphs 3 and 4, as may be applicable:
Provided this Order shall not apply to the auditor’s report on consolidated financial statements except clause (xxi) of paragraph 3.
3. Matters to be included in auditor’s report.-
The auditor’s report on the accounts of a company to which this Order applies shall include a statement on the following matters, namely:- (contd… please refer above attachment)
MCA notifies CARO 2016 (Companies Auditor’s Report Order, 2016)
MCA notifies the Companies Auditor’s Report Order (CARO), 2016 vide Order dt. 29th March, 2016. This Order brings about amendments in CARO, 2015 or supersedes the same. It may be noted that this Order shall be applicable for the audit reports relating financial year commencing on or after 1st April, 2015 (i.e. FY 2015-16 onwards). The new CARO 2016 stipulates mandatory reporting by the Statutory Auditors on certain issues.