This book provides a para-wise commentary on Companies (Auditor’s 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 9^th Edition, amended up to 31^st July 2022, authored by CA Srinivasan Anand G. This book is divided into two divisions:

• CARO Reporting under CARO 2020 (Applicable from Financial Year 2021-22)
• CARO Report on Consolidated Financial Statements under CARO 2020

The noteworthy features of this book are as follows:

• [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 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)
  • Audit Checklists
  • Audit Documentation
  • Sample Auditors’ Remarks under the relevant Clause
  • Corporate Practices (extracts from the annual reports)
• [FAQs] on CARO 2020
• [Clause-wise Ready Reckoner] on CARO 2020

The contents of this book are as follows:

• CARO Reporting under CARO, 2020 (Applicable from Financial Year 2021-22)
  • Introduction
  • Additional Regulatory Information Disclosure Requirements of Schedule III vis-a-vis CARO, 2020
  • Applicability 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
  • The 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 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 U/S 45-IA of RBI Act, 1934
  • 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