The Companies (Auditor’s Report) Order, 2020 (CARO) shall be in force from 1st April 2020.


The Ministry of Corporate Affairs vide its order dated 24th March 2020 has extended the Applicability of CARO-20 from 1st April 2019 to 1st April 2020. The Companies Auditors Report Order is applicable for audit of financial statements of eligible companies for the financial years commencing on or after the 1st April 2020.

Salient features of CARO-20:

  • The auditor is required to report as to whether any fraud by the company or any fraud on the Company has been noticed or reported during the year.
  • The auditor has to follow a specific format, as prescribed by the central government, to report the period and the amount of default by the company in repayment of loans, other borrowings or in the payment of interest to any lender.
  • Discrepancies of 10% or more in the aggregate of each class of inventory noticed during physical verification of inventory would have to be reported.
  • The number of cash losses incurred in the financial year and in the immediately preceding financial year has to be reported. The auditor has to take into consideration the issues, objections or concerns raised by the outgoing auditors before forming his opinion.
  • The auditor is to consider whistle-blower complaints received during the year by the Company in his audit.

Click here to read the Notification.

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