Purpose: CARO, 2020 is an auditing standard that aims to improve the quality of financial reporting by companies in India. It sets out the reporting requirements for auditors of companies, with the objective of enhancing the reliability and transparency of financial statements.
Applicability: CARO, 2020 applies to all companies registered under the Companies Act, 2013 (except one-person companies and small companies). The order is applicable for financial years commencing on or after April 1, 2021.
Timeline: The auditor's report for financial years commencing on or after April 1, 2021, must comply with CARO, 2020.
Exemption: One-person companies and small companies are exempted from the applicability of CARO, 2020.
Penalty: In case of non-compliance with CARO, 2020, penalties can be imposed on the company, its directors, and auditors. The penalty amount may vary based on the nature and severity of the non-compliance.
Due date: The auditor's report for a financial year must be submitted within 60 days from the date of conclusion of the Annual General Meeting (AGM).
Forms: The auditor's report must be submitted in Form No. CARO, which includes a checklist of compliance requirements under CARO, 2020.
Reporting authority: The auditor's report must be submitted to the board of directors of the company and filed with the Registrar of Companies (RoC).
