CARO 2020 - Companies Auditor's Report Order 2020 || Complete Explanation || CA Harshad Jaju
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- čas přidán 22. 07. 2021
- Applicability:
Companies (Auditor’s Report) Order, 2020 i.e. CARO is applicable to: Every company including a foreign company and the following types of private companies:
Which are the subsidiaries of public companies.
Which have paid up capital and reserves and surplus of more than Rs. 1 crore as on the balance sheet date.
Which have total borrowings exceeding Rs. 1 crore from any bank or financial institution at any point of time during the financial year.
Whose total revenue is more than Rs. 10 crores as per the balance sheet.
Non Applicability:
It is not applicable to the following:
A Banking Company
An Insurance Company
Section 8 Company (NPO)
One Person Company (OPC)
Other Private Companies whose limits are less than from those mentioned in applicability point.
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.
Section 143 (11) of the Act stipulates that the Central Government may order for the inclusion of statement on specified matter in the auditor’s report for specified class or description of companies. Accordingly, CARO 2016 is issued in pursuance of Section 143 (11) of Companies Act 2013 for inclusion of the matters specified therein in auditors’ report. Hence, CARO 2016 should be complied by the statutory auditor of every company on which it applies.
1. The Existence of CARO, 2016
MCA was of the objective that there are certain particular issues which are important to be reported with the financial statements for certain entities as a part of their audit reports. The auditor of such prescribed entities is required to report on the points mentioned under this order after performing procedures for verification of the same.
2. Applicability of CARO 2016
CARO 2016 is applicable to all the companies except the following (which) are specifically excluded from its purview:
A. Banking Companies
B. Insurance Companies
C. Companies registered for Charitable Purposes
D. One Person Company
E. Small Companies (Companies with Paid up capital less than or equal to Rs. 50 Lakhs and Last reported turnover less than or equal to Rs. 2 Crores)
F. The following Private Companies are also exempt from the requirements of CARO, 2016
i. Not a holding or subsidiary of a Public company
ii. Paid up Capital plus Reserves less than or equal to Rs. 1 Crore as at the reporting date
iii. Borrowings less than or equal to Rs. 1 Crore at any time during the year
iv. Revenue less than or equal to Rs. 10 Crores in the financial year
The auditors of all other class or classes of companies are required to report on the matters specified in this order. This order applies to foreign companies also and thus, the auditors for such companies are also required to report on the matters specified in CARO, 2016.
3. Matters specified in CARO 2016
The Company Auditor’s Report Order (CARO), 2016 includes the following matters on which the auditor is required to report mandatorily:
A. Fixed Assets
B. Inventory
C. Loans given by Company
D. Loan to Directors and Investment by the Company
E. Deposits
F. Cost records
G. Statutory Dues
H. Repayment of Loans
I. The utilisation of funds
J. Reporting of Fraud
K. Approval of Managerial Remuneration
L. Nidhi Company
M. Related Party Transactions
N. Private placement of Preferential Issues
O. Non-Cash Transactions
P. Registration under RBI Act
Applicability of CARO 2020
CARO 2020 is applicable for all statutory audits commencing on or after 1 April 2020 corresponding to the financial year 2019-20. The order is applicable to all companies which were covered by CARO 2016. Accordingly, the order applies to all the companies except the following companies specifically excluded from its purview:
One person company.
Small companies (Companies with paid up capital less than/equal to Rs 50 lakh and with a last reported turnover which is less than/equal to Rs 2 crore).
Banking companies.
Companies registered for charitable purposes.
Insurance companies.
The following private companies are also exempt from the requirements of CARO, 2020: -
Whose gross receipts or revenue (including revenue from discontinuing operations) is less than or equal to Rs 10 crore in the financial year.
Whose paid up share capital plus reserves is less than or equal to Rs 1 crore as on the balance sheet date (i.e. usually at the end of the FY).
Not a holding or subsidiary of a Public company.
Whose borrowings is less than or equal to Rs 1 crore at any time during the FY.
Reporting Requirements Under CARO 2020
The auditor’s report (CARO 2020) shall include a statement on the following matters, namely:
Details of tangible and intangible assets.
Details of inventory and working capital
BY CA KHUSHBOO SANGHAVI
BY HARSHAD JAJU
BY ANKIT OBEROIE
BY PANKAJ GARG
CARO 2016
CARO 2020
CARO 2016 REVISION
You are the best. Your videos always help me last minute. Simple, calm and clear videos.
This lecture was very helpful as it cover the detailed explanation of important Clauses
If subsidiary or holding company is private limited is caro applicable?
CARO 2016 is mandatory for nov21
is it relevant for nov 23?
it's very helpful thank you😊
Very useful Sir.
Thank you sir🤗
27:45 - matters
Very Very helpful sir thank u so much
Woooowwww.. awesome
thank you sir
Very useful video to stat audit interview..i don't think so isse koi best video h CARO pe...👍👍👍👍
2% of csr
👍
Really enjoyed sir ❤
is it applicable for may 24
Nov 21 m caro 2016 aega ya 20
CAR0 2016
🧠
Very nice lecture
applicale for may 24 or not