Professional Guide to CARO 2020

Including Clause wise Key Provisions and  Reporting Formats as per ICAI Guidance Note
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Description
Companies (Auditor's Report) Order, 2020, is applicable for reporting on the Financial Statements of the Companies from the Financial Year beginning on or after 01st April 2021.
Many new responsibilities casted on the Auditor under CARO 2020 when compared to CARO 2016. CARO 2020 has higher importance due to current developments in the Auditing and Review of Compliance.
It also aims to provide more transparency and accountability to the Users of the Financial Statements.
An audit of Financial Statements should be conducted in accordance with Standards on Auditing (SA's) issued by ICAI. Practising Professionals should also consider the Statements and significant Guidance Notes issued by ICAI on Audit Matters, while discharging their attest function. The Impact of Accounting Standards including Ind AS is imperative for compliance.
This Book is an endeavour to assist all Practising Chartered Accountants and highlights the principles in Reporting under CARO 2020, in a simple and effective manner, and to aid their application in practice.
The Highlights of this Book include -
·Complete coverage of CARO with Provisions of Companies Act, 2013 Lucid Explanations to applicable Standards on Auditing (SA's) Coverage of Provisions of Accounting Standards (AS)
• Reporting Format under respective Clause of CARO
· Coverage of ICAI's Guidance Notes on Various Audit Aspects Exclusive "Audit Checklist" under each Reporting Clause
• Exhaustive coverage of Relevant Standards on Auditing as Appendix
Covering ICAI's Guidance Note on Reporting u/s 143 (f) & (h)
Comparative Analysis of Reporting under CARO 2016 with CARO 2020
Valuable suggestions and constructive feedback from Users will be highly appreciated, and gratefully acknowledged.
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Table of Contents
Chapter 1. Introduction to CARO 2020
2. Applicability of CARO 2020
3. Clause by Clause Analysis
4. Reporting Requirements
3.1    Clause 1 — Reporting on PPE & Intangible Assets
3.2    Clause 2 — Reporting on Inventories
3.3    Clause 3 — Reporting on Loans/Advances
3.4    Clause 4 — Reporting on Compliance of Sec. 185/186
3.5    Clause 5 — Reporting on Public Deposits
3.6    Clause 6 — Reporting on Cost Records
3.7    Clause 7 — Reporting on Statutory Dues
3.8    Clause 8 — Reporting Undisclosed Income Offered
3.9    Clause 9 — Reporting Default in Payments
3.10  Clause 10 — Reporting on Monies Raised and its End Use
3.11   Clause 11 — Reporting on Frauds
3.12  Clause 12 — Reporting on Nidhi Companies
3.13  Clause 13 — Reporting on Related Party Transactions
3.14  Clause 14 — Reporting on Internal Audit
3.15  Clause 15 — Reporting on Non Non Cash Transaction
3.16  Clause 16 — Reporting on  RBI Registration & NBFC's
3.17  Clause 17 — Reporting on Cash Losses
3.18  Clause 18 — Reporting on Resignation of Auditors
3.19  Clause 19 — Reporting on Ability to Meet Liabilities
3.20  Clause 20 — Reporting on Unspent CSR
3.21   Clause 21 — Reporting on CFS
4.    Para 4 of CARO — 2020
Appendix
Appendix 1    Comparison between CARO 2016 vs 2020
Appendix 2    Standards on Auditing (SA 240, 250, 315, 550, 610, 700, 701, 705, 706)
Appendix 3    ICAI Guidance on Audit Matters
Guidance on Reporting under Sec. 143(3) (f) & (h)
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Author Details
CA G. Sekar