This book provides a para-wise commentary on the Companies (Auditors Report) Order (CARO). It is a complete guide on the applicability and the matters that need to be reported by an Auditor on CARO. This book will be helpful for Auditors.

The Present Publication is the 10^th Edition and has been amended up to August 2023. This book is authored by CA Srinivasan Anand G and divided into three divisions:

• [Division One] Features of CARO 2020 & its Applicability
• [Division Two] CARO Reporting as Applicable to Standalone Financial Statements
• [Division Three] CARO Reporting as Applicable to Consolidated Financial Statements

The noteworthy features of this book are as follows:

• [Corporate Practices] from published annual reports of FYs 2021-22 & 2022-23 are included in the book
• [All-about CARO 2020] which includes the following topics:
  • Features of CARO 2020
  • Audit Requirements (Other Audits vs Reporting Requirements u/s 143 of the Companies Act 2013)
  • Clause-wise Analysis & Commentary on Clauses (i) to (xx) of Para 3 & 4 along with Clause (xxi) of Para 3 of CARO 2020
• [Para-wise Commentary] dealing with clauses (i) to (xx)
  • Interpretation Requirements of the Clause in light of the following:
    • Applicable Legal Provisions
    • Relevant Standards on Auditing
    • Revised 2022 Guidance Note of ICAI on CARO 2020
  • Applicable Requirements of Schedule III of the Companies Act 2013
  • Requirements of Section 143(1) to (3) applicable to the Clause’
  • NFRA’s Interpretation of the Reporting Requirements of the Clauses and lapses on the part of auditors pointed out by NFRA in Audit Quality Review Reports (AQRR)
  • Forward Linkages to the following:
    • Tax Audit Report in Form No. 3CD
    • Requirements under Section 143(1)/143(3) of the Income-tax Act
  • Audit Checklists covering the following
    • Checklist in respect of each CARO Clause
    • DPT 3 Return Certification
    • Nidhi Rules Compliances
    • SA 570 (Revised)
  • Audit Documentation
  • Sample Auditors’ Remarks under the relevant Clause
  • Corporate Practices (extracts from the annual reports)
• [FAQs & Case Studies] on CARO 2020
• [Clause-wise Ready Reckoner] on CARO 2020

The detailed contents of this book are as follows:

• Applicability of Requirements of CARO 2020
  • Introduction
  • Applicability of CARO 2020
• Reporting under CARO 2020 (As Applicable to Audit of Standalone Financial Statements) [Clauses 3(i) to 3(xx) of CARO 2020]
  • Property, Plant and Equipment
  • Intangible Assets
  • Title Deeds of all Immovable Properties Disclosed in Accounts
  • Proceedings Pending against the Company for Holding Benami Property
  • Inventory
  • Quarterly Statements Submitted to Banks/FIs by Companies Enjoying Sanctioned Working Capital Limits
  • Loans or Advances in the Nature of Loans or Guarantees or Security Provided to, or Investments made in Other Entities
  • Reporting on Compliance with Sections 185 and 186 as Regards Loans, Investments, Guarantees and Securities
  • Acceptance of Public Deposits and Deemed Deposits
  • Maintenance of Cost Records
  • Payment/Non-Payment of Statutory Dues
  • Transactions not Recorded in the Books and Surrendered or Disclosed as Income in Tax Assessment
  • Company Defaults in Repayment of Loans/Other Borrowings/in Payment of Interest to any Lender
  • End Use of Term Loans
  • ‘Asset-Liability Maturity Mismatch’ – Use of Short-Term Funds for Long-Term Purposes
  • Funds Taken from Other Entities by Company to Meet Obligations of Subsidiaries, Associates or JVs
  • Whether Company has Raised a Loan on Pledge of Securities in Subsidiaries, Associates or JVs
  • End Use of Money Raised by Way of IPO/FPO
  • Private Placement/Preferential Allotment of Shares/FCDs/PCDs/OCDs
  • Frauds Noticed/Reported
  • Reporting of Compliances by Nidhi Companies
  • Related Party Transactions
  • Internal Audit
  • Non-Cash Transactions Involving Directors or Connected Persons
  • Registration of NBFCs, HFCs and CICs
  • Whether Company has Incurred Cash Loss
  • Resignation of Statutory Auditors
  • Material Going Concern Uncertainty
  • Transfer of Unspent CSR Funds
  • Reasons to be Stated by Auditor for Qualified or Adverse Remarks
    in CARO Report
• CARO Report on Consolidated Financial Statements under CARO, 2020
  • Qualified/Adverse Remarks in CARO Reports of Companies Included in Consolidated Financial Statements