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Introduction 1. The Central Government, in exercise of the powers conferred, under sub-section (11) of section 143 of the Companies Act, 2013 (hereinafter referred to as the Act), issued the Companies (Auditors Report) Order, 2020, (CARO 2020/ the Order) vide Order number S.O. 849(E) dated 25th February 2020. CARO 2020 was initially applicable for audits of financial year 2019-20 and onwards. Subsequently, vide notifications dated 24th March 2020 and 17th December 2020, its applicability was
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FAQ :
CARO 2020, the Companies (Auditor's Report) Order, 2020, is an order issued by the Central Government under the Companies Act, 2013. It requires auditors to include specific statements in their audit reports concerning various aspects of a company's operations and financial status.
CARO 2020 was initially set to apply for audits of the financial year 2019-20, but its applicability was deferred by one year. It is now applicable for audits of the financial year 2021-22 and onwards.
The purpose of the Guidance Note is to help auditors comply with the reporting requirements stipulated in CARO 2020. It provides guidance on various matters on which auditors are required to report.
CARO 2020 generally does not apply to banking companies, insurance companies, companies licensed under section 8 of the Act, one person companies, small companies, and certain private limited companies meeting specific financial criteria.
Yes, CARO 2020 applies to foreign companies that have a place of business in India and conduct business activities in India, provided an audit of their financial statements is required under the Companies Act.
The Guidance Note is an Exposure Draft, meaning it is a draft for public comment. The guidance provided is not exhaustive, and auditors should use their professional judgement and experience.
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