A brief synopsis on CARO, 2015

Notification:

Ministry of Corportate Affairs (MCA) has notified the Companies (Auditor’s Report) Order, 2015 on 10th April, 2015. As per new Reporting order, auditor have to report only on 12 elements rather than 21. A brief Synopsis of elements covered in CARO, 2003 and CARO, 2005 are here under:

Brief Synopsis:

S.No.

List of CARO, 2003

List of CARO, 2015

 

1.

Fixed Assets

Fixed Assets

2.

Inventories

Inventory

3.

Loans given by the company

Loans given by the company

4.

Internal Control System

Internal Control System

5.

Transactions with Related Parties as per Register of Contracts u/s 301

Deleted

6.

Deposits from the Public

Deposits from the Public

7.

Internal Audit System

Deleted

8.

Cost Records

Cost Records

9.

Statutory Dues

Statutory Dues

10.

Sick Industry

Sick Industry

11.

Dues to Financial Institutions

Dues to Financial Institutions

12.

Secured Loans and advances granted

Deleted

13.

Chit Fund, Nidhi and Mutual Benefit Company

Deleted

14.

Investment Company

Deleted

15.

Gurantee given by company

Gurantee given by company

16.

Term Loans

Term Loans

17.

Source of Funds and its Application

Deleted

18.

Preferential Issue

Deleted

19.

Securities and Debentures

Deleted

20.

End Use of Public Issue Funds

Deleted

21.

Frauds

Frauds

As per above synopsis we came to know that the reporting order has been minimized to a shorter extend. So, now let us have a quick review on how to report on CARO, 2015 along with Auditor’s Report.

Here, I am assuming that all the elements of the company are positive.

 

ANNEXURE TO THE  AUDITOR’S REPORT

1. Fixed Assets:

  1. In our opinion, the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets
  2. In our opinion, fixed assets have been physically verified by the management at reasonable intervals, having regard to the size of the company and the nature of its assets. The management has confirmed that no discrepancies have been found.
  3. On the basis of books and records produced before us and as per explanations and information given by the management, no parts of fixed assets have been disposed off during the year.

2. Inventory:

  1. The management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable.
  2. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business
  3. On the basis of our examination of inventory records and in our opinion, the company has maintained proper records of inventory; no discrepancies have been noticed on physical verification between physical stock and books records.

3. Loan given by the Company:

  1. On the basis of books and records produced before us, the company has granted loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013. As per records no. of parties and amount outstanding are as under.
  2. According to the information and explanation given to us, that the loans are realizable on demand, therefore there are no over dues of principal as on Balance Sheet date.

4.  Internal Control System:

In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. 

5. Deposits from the public:

In our opinion and according to information given to us, the company has not accepted deposits from the public, which come under the directives issued by the Reserve Bank of India & the provisions of section 73 to76 or any other relevant provisions of the companies Act and rules framed there under.

6. Cost Records:

To the best of our knowledge and explanation given to us, the provision of maintenance of cost records under sub-section (1) of section 148 of the Act are not applicable to the company.

7. Statutory Dues:

 In our opinion and according to information and explanation given to us and according to records of the company, the company has been regular in depositing undisputed statutory dues including Income Tax/Wealth Tax/Service Tax/ and any other statutory dues with the appropriate authorities. There are no arrears of statutory dues as at 31st March 2015 which are outstanding for a period of more than 6 month from the date they become payable.

In our opinion and according to information and explanation given to us and according to records of the company, no amount required to transfer to investor education and protection fund in accordance with the relevant provision of Company Act. and rule made there under.

8. Sick Industry:

 The Company has no accumulated losses at the end of the financial year and it has not incurred any cash losses in the current and immediately preceding financial year.

9. Dues to Financial Institutions:

Based on our audit procedure and as per the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to a financial institution or bank.

10. Gurantee given by Company:

 According to the information and explanations given to us, and based on the documents and records produced to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

11. Term Loans:

 According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

12. Frauds:

 Based upon the audit procedures performed for the purpose of reporting the true and fair nature of the financial statement and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

 

For XXX & Co.

Chartered Accountants

Firm Registration No-

 

 

Happy Readings!!

 

 

Published by

Shushant ( ICAI Final )

Shushant is a Chartered Accountant student at Institute of Chartered Accountants of India. He is also a Student of Company Secretary at Institute Of Company Secretaries of India. He is a administrator of this site . In his spare time he hang out with his friends and discuss about the current issues in market. You can find his latest blog posts at www.enrollmyexperience.com and at his facebook profile.

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