Page 156 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori

Applicability of the Order: CARO, 2020 serves as an additional reporting requirement and is applicable to all
companies, including foreign companies as defined in clause (42) of section 2 of the Companies Act, 2013, albeit
with specific exemptions for certain classes of companies.
Exemptions: (Shortcut: IB COPS)
Insurance Companies: Companies defined under the Insurance Act, 1938 are not required to adhere to the
CARO, 2020.

Banking Companies: Banking companies as defined in clause (c) of section 5 of the Banking Regulation Act,
1949 are exempt from the CARO, 2020.

Charitable Company (Section 8 Companies): Companies licensed to operate under section 8 of the Companies
Act are exempt from the requirements of CARO, 2020.
One Person: One Person Companies as defined in clause (62) of section 2

Certain Private Limited Companies: Private limited companies (GN on CARO – It means Pvt Co’s as per Co’s
Act (Limited, Unlimited) that are not subsidiaries or holding companies of a public company, and meet specific
financial criteria regarding capital, borrowings, and revenue as outlined in the Companies Act, 2013, are exempt
from CARO, 2020.

Small Companies: small companies defined under clause (85) of section 2 of the Companies Act are not subject
to CARO, 2020.
2. Auditor's report to contain matters specified in paragraphs 3 and 4
Matters to be Included: Every auditor's report under section 143 of the Companies Act, 2013, for companies to
which the CARO, 2020 applies, must include the matters outlined in paragraphs 3 and 4, as relevant, for the
financial year in question.
Exclusion in Case of Consolidated Financial Statements: The CARO, 2020 does not generally apply to
auditor’s reports on consolidated financial statements, with the exception of the stipulations in clause (xxi) of
paragraph 3.

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