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CARO, 2020
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CG in consulation with NFRA may by ORDER direct auditor to include a statement

on matters in the ORDER in his report
Genesis of CARO Section 143(11)
ORDER = CARO 2020

Para 1 Applicability

Para 2 Auditor's report to contain matters specified in paragraphs 3 and 4

Parts of CARO
Para 3 Matters to be included in the auditor’s report under CARO, 2020

Para 4 Reasons to be stated for unfavourable or qualified answers.

Every Company including Foreign Company

Banking Company

Insurance company

Section 8 Company

OPC

Small Company

subsidiary or
holding of a public CARO Applicable
company

PUC & RS < / = 1

Balance sheet date
crore

at any point of time

Borrowing < / = 1
Otherwise, CARO during the financial
crore
not applicable if year
Applicability
Exceptions (CARO
Total revenue (S- III)
Not Applicable) during the financial
including from DCO
year
</= 10 crore

If any of the above condition of PUC& RS, Borrowings or Total

Private Limited
revenue is not satisfied, CARO applicable
Company
A company is covered under the definition of small company; it
will remain exempted from the applicability of the Order even if
it falls under any of the criteria specified for private company.

Paid Up Share Capital ≤ 4 crores AND

Small Company
Turnover ≤ 40 crores.

A HOLDING company or a SUBSIDIARY

The following 3 company.
categories of
Companies shall A company registered under SECTION 8. or
NOT be regarded as
SMALL Companies A company or body corporate governed by
any SPECIAL ACT.

If order is applicable auditor's report shall contain the matters specified in para 3 and para 4 as
Auditor's report to
applicable
contain matters
specified in
Order shall not apply to the auditor's report on consolidated financial statements except clause (xxi)
paragraphs 3 and 4.
of paragraph 3.
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CARO, 2020 - Paragraph 3 of CARO, 2020

Matters to be included in the auditor’s report under CARO, 2020
Part 1

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Full Particulars
Proper Records -
Whether the PPE Quantitative details
company is
maintaining proper Situation
records
ITA Full particulars

Physical Verification Whether PPE PVed at reasonable interval?

Whether any material discrepancies were noticed on such

verification
Material
discrepancies
and if so, whether the same have been properly dealt within
the books of account.

Whether the title

deeds of all the
immovable
properties disclosed
Title Deeds if not, provide the details
in the financial
Fixed Assets statements are held
in the name of the
company,

Company has revalued PPE or ITA

during the year
Whether
Revaluation was based on valuation by
a registered valuer
Revaluation of PPE /
ITA
If change is 10% or more
Specify the amount
In aggregate of the net carrying value
of change
For each class of PPE or ITA

Proceedings
For holding any
Initiated or pending
benami property
Proceedings for against the company
Whether
benami property
company has appropriately disclosed
the details in its FS
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CARO, 2020 - Paragraph 3 of CARO, 2020

Matters to be included in the auditor’s report under CARO, 2020
Part 1

Revision Videos of SAs For CA Final by Neeraj Arora For Edu91 

Conducted -
conducted at reasonable intervals?
Reasonable interval

Coverage
the coverage and procedure of such verification by the management is
and Procedure
appropriate;
Appropriate
Physical Verification
Discrepancies of 10%
or more - in the aggregate for each class of inventory were noticed?

Noticed?

If yes dealt properly whether they have been properly dealt with in the books of account?
Inventory in BOA?

Sanctioned working capital limits in excess of five crore rupees in

Sanctioned > ₹ 5 aggregate, from banks or financial institutions?
Crores
on the basis of security of current assets

Working capital filed by the

limits company with such Yes
banks or financial
Quarterly returns institutions are in
agreement with the
books of account of No Give details
the Company

Amount and Balance

outstanding No

aggregate amount
during the year
to subsidiaries,
joint ventures and
Provided loans or associates; balance outstanding
provided advances in at the balance sheet
the nature of loans, any other entity date
or furnished
guarantee, or Yes indicate
provided security? aggregate amount
during the year
to parties other
than subsidiaries,
not applicable to joint ventures and
associates balance outstanding
companies whose at the balance sheet
principal business is date
to give loans

Terms and Condition

investments made, terms and conditions are not prejudicial to the company’s interest?
Investment / guarantees
Guarantee / provided,
Security / Loans and security given, grant
Advances of loans

schedule of repayment of principal and payment of interest has been stipulated?

Loan - Schedule /
Repayments
the repayments or receipts are regular?

state the total amount overdue for more than ninety days
if Amount is overdue
reasonable steps have been taken by the company for recovery of the principal and interest?

has been renewed or extended?

Loan - fallen due
during the year -
fresh loans granted to settle the overdues of existing loans given to the same parties?
(not applicable to
companies whose
the aggregate amount of such dues renewed or extended or settled by
principal business is
fresh loans
to give loans] specify
)
Percentage of aggregate to the total loans granted during the year

Loans granted
repayable on aggregate amount
demand?

Specify percentage thereof to the total loans

or without
specifying terms of
period of aggregate amount of loans granted to Promoters, related parties
repayment?

Provisions of 185 Loan to directors

sections 185 and 186
loans, investments, of the Companies
Section 185 and 186 guarantees, and Act have been Loan and investment by company (Inter-corporate
186
security complied with loans / guarantee / security / Investments)

if not, provide the details thereof

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CARO, 2020 - Paragraph 3 of CARO, 2020

Matters to be included in the auditor’s report under CARO, 2020
Part 1

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directives issued by
the Reserve Bank of
India

provisions of
Complied with
sections 73 to 76
In respect of
deposits other relevant
provisions of the
Companies Act
3(v) - Deposit
nature of such
accepted
No? contraventions be
stated

order has been

passed by Company
Law Board or
National Company whether the same has been
Law Tribunal or complied with or not
Reserve Bank of
India or any court or
any other tribunal

Whether maintenance of cost records has been specified?

3(vi) Cost Records
whether such accounts and records have been so made and
maintained.