Page 67 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

Sub-Total 82,00,000
Reserves & Surplus
-Balance in Statement of Profit & Loss 15,00,000
-Capital Reserve 10,00,000
Sub-Total 25,00,000
Grand Total 1,07,00,000

You are provided with the provisions regarding applicability of Companies (Auditor’s Report) Order,
2020, (CARO, 2020) issued under section 143(11) of the Companies Act, 2013 to a private limited
company that it specifically exempts a private limited company having a paid up capital and reserves
and surplus not more than Rs. 1 crore as on the Balance Sheet date and which does not have total
borrowings exceeding Rs. 1 crore from any bank at any point of time during the financial year and
which does not have a total revenue as disclosed in Scheduled III to the Companies Act, 2013
exceeding Rs. 10 crore during the financial year.

Considering the information given above, which of the following shall be considered as a reason
regarding applicability or non-applicability of CARO, 2020?
a) Reporting under CARO, 2020 shall be applicable as the company is having a paid-up capital and
reserves and surplus of Rs. 1.07 crore i.e., more than Rs. 1 crore as on the Balance Sheet date.
b) Reporting under CARO, 2020 shall be applicable as the company is having a paid-up capital and
reserves and surplus of Rs. 1.02 crore i.e., more than Rs. 1 crore as on the Balance Sheet date.
c) Reporting under CARO, 2020 shall not be applicable as the company is having a paid-up capital
and reserves and surplus of Rs. 0.92 crore i.e., not more than Rs. 1 crore as on the Balance Sheet
date.
d) Reporting under CARO, 2020 shall not be applicable as the company is having a paid-up capital
and reserves and surplus of Rs. 0.82 crore i.e., not more than Rs. 1 crore as on the Balance Sheet
date.

CARO.2 SM21
Reporting on fraud is made by auditor under which of the following clause of para 3 of CARO, 2020
a) Clause (xi)
b) Clause (xii)
c) Clause (xiii)
d) Clause (xiv)

CARO.3 N22R
“Letters of credit” and “Foreign bills purchased and discounted” are examples of respectively:
a) Funded facility and non- funded facility
b) Non-funded facility and funded facility
c) Funded facility and funded facility
d) Non-funded facility and Non-funded facility

CARO.4 N22M
During the course of audit of a listed company, CA P finds that solar power generating plant
capitalized in books for `5.00 crore during the year does not exist. It became known that only bills
were arranged and no assets were actually procured. Besides, financial statements also reflect
depreciation of `1.50 core on above. The bills of capitalized asset were approved by procurement
head. The matter was reported to audit committee by CA P. However, no response was received.
Considering above, choose the most appropriate option: -
a) The matter needs to be reported to MCA in ADT-4. It also requires reporting under CARO,2020.
b) The matter needs to be reported to MCA in ADT-4. It does not require reporting under
CARO,2020.
c) The matter need not be reported to MCA. However, it requires reporting under CARO,2020.
d) The matter needs neither reporting to MCA nor under CARO,2020
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