CARO 2020- MCA notifies Companies (Auditor’s Report) Order 2020. Key Changes

CARO 2020. MCA notifies Companies (Auditor’s Report) Order 2020. Read Key Changes / Highlights 

CARO 2020 – Companies (Auditor’s Report) Order, 2020

Note: Due to Covid-19 virus, MCA has extended the applicability of CARO 2020 from the financial year 2020-2021 instead of being applicable from the financial year 2019-2020

MCA in place of existing the Companies (Auditor’s Report) Order, 2016, has notified CARO 2020 after consultation with the National Financial Reporting Authority constituted under section 132 of the Companies Act, 2013.

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 contain report on matters specified in paragraphs 3 and 4 of the CARO 2020.

CARO 2020 – Key changes/highlights

In CARO 2016, clauses in paragraphs 3 were 16 whereas in CARO 2020 in paragraph 3 there are 21 reporting clauses  

Unlike CARO 2016, which required reporting on all fixed assets, new reporting requirements pays attention to Property, Plant, Equipment and intangible assets.

Reporting on revaluation of Property, Plant and Equipments by company

Reporting of proceedings under the Benami Transactions (Prohibition) Act, 1988.

Reporting of compliances if company was sanctioned working capital limits in excess of five crore rupees or more from banks or financial institutions.

Reporting of investments in or  providing of any guarantee or security or granting any loans or advances to companies, firms, Limited Liability Partnerships or any other parties.

Reporting of compliances with RBI directives and the provisions the Companies Act with respect to deemed deposits.

Reporting with respect to transactions not recorded in the books of account surrendered or disclosed as income in the income tax proceedings.

Comprehensive reporting requirement for default in the repayment of loans / other borrowings or in the payment of interest

Reporting on treatment by auditor of whistle-blower complaints received during the year by the company 

Reporting on internal audit system

Reporting on cash losses

Reporting on resignation of the statutory auditors

Reporting on uncertainty of company capable of meeting its liabilities

Reporting transfer of unspent CSR amount to Fund specified in Schedule VII

Reporting on qualifications or adverse remarks by the auditors in the CARO reports of companies included in the consolidated financial statements

Read Salient features of CARO 2020 Click Here >> 

Download CARO 2020 Click Here >>

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