Auditor's report 2003 (caro)

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Querist : Anonymous

Querist : Anonymous (Querist)

29 December 2014 ON WHICH COMPANIES CARO IS APPLICABLE????????????????

RINKESH SHAH

RINKESH SHAH (Expert)
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30 December 2014 AS on date as per companies act 2013 none of the company

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2015 Sorry, I Don't understand ur answer but i mean to say what is the criteria for applicability of CARO??????

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Asha Kanta Sharma online

Asha Kanta Sharma

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15 July 2024 The Companies (Auditor's Report) Order, 2003 (CARO 2003) issued by the Ministry of Corporate Affairs (MCA) of India is applicable to certain classes of companies. Here’s a summary of the applicability criteria for CARO 2003:

### Applicability of CARO 2003

CARO 2003 applies to the following classes of companies:

1. **Listed Companies**: All companies listed on any stock exchange in India or outside India.

2. **Public Companies**: All public companies as defined under the Companies Act, 1956 (now Companies Act, 2013), including subsidiaries of such companies.

3. **Private Companies**: Private companies that meet any of the following thresholds in any of the three preceding financial years:
- Paid-up capital and reserves exceeding Rs. 50 lakhs.
- Turnover exceeding Rs. 5 crores.
- Borrowings exceeding Rs. 1 crore.

4. **Foreign Companies**: Companies incorporated outside India with a place of business in India, meeting the criteria applicable to public or private companies as specified above.

### Key Points about CARO 2003

- **Audit Report Requirements**: CARO 2003 mandates specific reporting requirements for auditors. It requires the auditor to report on various matters concerning internal controls, statutory compliance, defaults in repayment of loans, utilization of funds raised through public issues, etc.

- **Mandatory Compliance**: Companies falling under the applicability criteria must ensure that their auditors comply with the reporting requirements of CARO 2003 in their audit reports.

- **Updates and Revisions**: CARO has been updated over the years, and subsequent orders (like CARO 2015, CARO 2016, etc.) have revised and expanded the reporting requirements. As of now, CARO 2020 is applicable, which supersedes earlier versions.

### Conclusion

CARO 2003 (and subsequent versions) applies to listed companies, public companies, certain private companies based on specified financial thresholds, and foreign companies operating in India. It sets out specific reporting requirements for auditors to enhance transparency and accountability in financial reporting. It's crucial for companies falling under CARO's purview to ensure compliance with the order to avoid penalties and ensure good corporate governance practices.