In order to bring more transparency & faith in Financials statements of companies, The ministry of corporate affairs introduce the new set of Companies (Auditor's Report) Order, 2020.
In contrast with CARO 2016, Now the Auditor have to report more disclosures on core aspects of financials statement such as: loan defaults, cash losses, Immovable properties etc. Moreover, the CARO 2020 is applicable for the eligible companies for the financial year commencing on or after the 1st April 2019.
Earlier, there was 16 clauses to which auditor have to report while doing statutory audit of company. Now CARO 2020 notified 21 clauses out of which at least 10 new clauses are there.
In this articles, we are providing the summary of NEW & MODIFIED CLAUSES of CARO 2020 as follows:
New Clause
Modified Clause
Text of CARO 2020
Concluding Remarks:-
With the Intent to combat the corporate misdoings The government seems to put in place a stringent procedure to bring the several crucial transactions entered into by the company having nexus with financial risk in the company under regulatory scanner. Since CARO 2020 will be applicable with retrospective effect (i.e. 1st April 2019). So the Auditors have to analyze the heaps of documents & Information with due care.
