[Summary] CARO, 2020 and consequential amendment in Schedule III, issued by ICAI

CARO 2020 has introduced a number of new or modified reporting requirements to be fulfilled by the auditors. Also, to increase transparency, provide additional disclosures to users of financial statements, and assist the management of companies to provide various disclosures pertaining to new clauses of CARO 2020, the amendment in Schedule III of the Companies Act 2013 was brought by MCA.

In order to fulfill the requirements and expectations, as sought in CARO 2020 and amended Schedule III of the Companies Act 2013, it is suggested to read CARO 2020 in conjunction with the corresponding amendments made in Schedule III to the Companies Act, 2013 for presentation and disclosure requirements stated therein and perform the audit procedures accordingly.

Keeping in view the above requirement on part of the auditor, Guidance Note on the Companies (Auditor’s Report) Order, 2020 had already been issued by ICAI providing detailed guidance on various clauses of CARO 2020 and various issues and intricacies involved therein. However, pursuant to the amendment in Schedule III, a comprehensive revision of the Guidance Note on CARO 2020 is being initiated by ICAI.

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