Page 266 - CA Inter Audit PARAM

CA Ravi Taori
last day of the financial year concerned for a period of more than six months from the date they
became payable, shall be indicated;

(b) where statutory dues referred to in sub-clause (a) have not been deposited on account of any
dispute, then the amounts involved and the forum where dispute is pending shall be mentioned (a
mere representation to the concerned Department shall not be treated as a dispute);

➢ Internal Audit
Clause (xiv) (a) whether the company has an internal audit system commensurate with the size and
nature of its business.

(b) whether the reports of the Internal Auditors for the period under audit were considered by the
statutory auditor;

QNO-- Cl 14, Applicability of Internal Audit & Reporting New Course – (M24M)
CARO.35.500 Bhaskar CNO – CARO.200

DOX Limited, a service provider company engaged in providing courier services pan-India as well as
internationally, has appointed an internal auditor, Mr. G, in accordance with requirements of the
Companies Act, 2013 during financial year 2023-24. The company’s annual turnover during year 2022-23
and 2023-24 has been about ₹ 300 crores during each of above years. Business of the company has been

profitable. Mr. G heads internal audit department of the company assessing governance activities,
assisting in improving risk management activities and reviewing controls. Discuss reporting responsibility
of statutory auditor of the company under the Companies Act, 2013 specifically in relation to internal
audit and related matters for the year 2023-24.
Answer DOX Limited is in business of providing courier services. As name of the company and given facts
suggest: -
➢ It is not a small company under section 2(85) of Companies Act, 2013.
➢ It is not a private company.
➢ It is not a one person company.
➢ It is not a banking or insurance company.
➢ It is not a Section 8 company as it does not has charitable objects etc.

Therefore, it does not qualify for any exemption from applicability of CARO, 2020. Hence, reporting
requirements under CARO, 2020 are applicable. While reporting under CARO, 2020, statutory auditor is
required to report under clause (xiv) of paragraph 3 as under:

(a) Whether the company has an internal audit system commensurate with the size and nature of
its business

(b) whether the reports of the internal auditors for the period under audit were considered by the
statutory auditor

QNO— CARO (Cl 12 & 13-Requirements) Old Course – (N23R)
CARO.40 Bhaskar CNO - CARO.180/CARO.190 New Course – (M24E/S24R)
State the matters to be included in the auditor's report as per CARO, 2020 regarding:
(i) Nidhi Company.
(ii) Transactions with related parties.
OR
You have been appointed as the statutory auditor of a limited company. The company is registered as a
Nidhi company. What are the reporting requirements of a Nidhi company under the Companies Auditor's
Report Order, 2020?
Answer As per clause (xii) of CARO, 2020, the following matters are required to be included in the auditor’s report
relating to Nidhi Company
(a) whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of 1:20
to meet out the liability;

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