Companies (Audit Report) Order,

2020, [CARO]Audit & Assurance3rd

Criteria Presentation

Hariharan Sridhar
Sy M.Com
1202210215
MIT- WPU
Under the guidance of: CA, CS Omkar Sumant Sir.
INDEX
01. Introduction 02. Objectives of introducing CARO

Why was CARO introduced and what does

What is CARO? the government want to achieve through it?

05. Conclusion
03. Applicability of 04. Reporting
CARO Amendments
To whom is CARO applicable and who all Requirements of Reporting under
are exempted from complying to CARO CARO 2020.

QUICK REVIEW October 14, 2022

Introduction
CARO 2020 (amended), is the new formant for issue of audit reports in case of statutory audits of
companies under Companies Act, 2013, announced by the Ministry of Corporate Affairs (MCA) on 25 th
February 2020.
First introduced in 1988, CARO has been amended 5 times until 2020 i.e., in 2003, 2004, 2005, 2015,
2016 & 2020.
CARO 2020 has in total 21 clauses, which requires reporting on various aspects covering from Fixed
Assets, Inventory and non-compliance with various laws and provisions thereof.

Brief Introduction October 14, 2022

Applicability of CARO 2020

Applicable to all statutory audits commencing on or after 1 st April, 2021 corresponding to the financial year 2020-2021, & to all companies which were
covered in CARO 2016.

Not Applicable to:

One Person Company Companies with gross receipts or

revenue < = Rs. 10 crores in the F.Y
Companies with paid-up capital < =
Company with paid up share capital +
Rs.500 & with last reported turnover
Reserves < = Rs. 1 crore at the year-end
which is < = Rs. 2 crores.
Companies registered for charitable Company who is not a holding or a
purposes subsidiary of a Public Company
Whose borrowing is < = Rs. 1 crore at
Insurance company
any time during the F.Y
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