Changes in CARO 2015 report as compare to CARO 2003

Here, synopsis of the major changes in CARO 2015 report.

After the enactment of companies Act’2013, the companies Act, 1956 (old act) ceased to have effect from April 1, 2014.As a corollary, the companies (Auditor‘s Report) Order, 2003 (CARO, 2003) also ceased to have affect from the said date.

CARO, 2015 is not applicable on one Person Company & small company. For exclusion of Pvt. Ltd. Co., the ceiling of paid up capital & turnover remains unchanged but the limit of outstanding loan has been increased from 10 lakh to 25 lakh. CARO 2015 contains 12 clauses as compared to the 21 clauses contained in the Companies (Auditor’s Report) (Amendment) Order 2004 (CARO 2004).

Following points are added in CARO, 2015

1)      Reporting on adequate internal control procedure for sale of services as well.

2)      Reporting on compliance of the order passed by National Company Law Tribunal or Reserve Bank of India or any court or any tribunal.

3)    Service Tax, Value added tax have been added in the list of statutory dues clause. Requires to report whether the amount required to be transferred to investors education and protection fund. In accordance with the act and within the time frame.

Following points are deleted in CARO, 2015

1)      If a substantial part of fixed assets have been disposed off during the year, whether it has affected the going concern.

2)      Secured/unsecured loan taken to companies, firms or other parties covered in the register maintained under section 301 of the act. Requirement to report number of parties and the amount involved in the transactions. Reporting on rates charged upon such loan.

3)      Reporting on transactions in which directors are interested and pricing of these transactions.

4)      Requirement of Internal Audit system for listed companies & other private companies which meet the specified limit.

5)      Maintenance of adequate documents and records in case where the company has granted loans & advances on the bases of security by way of pledge of shares, debentures & other securities.

6)      Reporting of compliance with special statutes which is applicable to chit fund/nidhi/mutual benefit fund/societies.

7)      Reporting of maintenance of records of dealing or trading in shares, securities, debentures and other investments & timely entries made therein.

8)      Reporting of the funds raised on short term basis has been used for long term investment and vice versa.

9)      Reporting of any preferential allotment of shares to parties & companies covered under Section 301 of the companies Act, 1956.

10)  Reporting on creation of securities in respect of debenture issued.

11)  Reporting on disclosure of end use of money raised by public issues