It is all about CARO 2016 in detailed observations and it is compared with CARO 2015 and this contains how to report for each clause in caro, thank u in advance for seeing this.
It is all about CARO 2016 in detailed observations and it is compared with CARO 2015 and this contains how to report for each clause in caro, thank u in advance for seeing this.
Overview of Companies (Auditor’s Report) Order 2020
TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,PART II, SECTION 3, SUB-SECTION (ii)]MINISTRY OF CORPORATE AFFAIRS
CONTENTS
1) BACKGROUND OF SECTION 143 OF COMPANIES ACT 2013
2) REQUIREMENT OF CARO
3) NON APPLICABILITY OF CARO 2020 TO CERTAIN COMPANIES
3) MATTERS TO BE INCLUDED IN THE AUDITORS REPORT
4) DESCRIPTION OF EACH PARAGRAPH TO BE INCLUDED IN CARO 2020
How to Begin Secretarial Audit (Compliance of All Applicable Law )Pavan Kumar Vijay
My Presentation at ICSI on 13/03/2015- "How to Begin- Secretarial Audit".
Secretarial Audit is a process to check compliance with –
• the provisions of various laws and Rules/Regulations/Procedures,
• maintenance of books, records etc,
• by an independent professional to ensure that the company has complied with the legal and procedural requirements and also followed due processes.
• the Board of Directors has to give explanation in the Board’s Report to every qualification and observation or other adverse remark made by the Secretarial Auditor.
•So we can say that the Board of Directors has to ensure that there should be a system in the company through which Compliance Officer can Control on all compliances under all applicable Laws.
Read more...
When non-residents are not required to file tax returns for income earned in ...DVSResearchFoundatio
Key Takeaways:
Charging section for taxability of non-residents
Incomes of non-residents for which no returns to be filed
Conditions to be satisfied for non-filing of returns
Representative assessee and its liability
This slideshare contains all the provision of CARO 2015 which is applicable from 10th of April 2015.
Further relevant extract from Companies Act 2013 has been made.
Key Takeaways:
Enhanced reporting requirements in CARO, 2020
Significant changes in CARO, 2020
Matters specified in Auditor's report
Comparison between CARO, 2020 and CARO, 2016
Key Takeaways:
Provisions governing RPT under Companies Act, 2013, SEBI (LODR), IND AS
Statutory compliances for RPT
Approval requirements for RPT
Disclosures norms for RPT under various statutes
In India, Companies Act, 2013 provides for compulsory Secretarial Audit by Listed Companies and other Public Companies where Paid Up Capital is 50 crores or more or turnover is 250 crores or more
Overview of Companies (Auditor’s Report) Order 2020
TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY,PART II, SECTION 3, SUB-SECTION (ii)]MINISTRY OF CORPORATE AFFAIRS
CONTENTS
1) BACKGROUND OF SECTION 143 OF COMPANIES ACT 2013
2) REQUIREMENT OF CARO
3) NON APPLICABILITY OF CARO 2020 TO CERTAIN COMPANIES
3) MATTERS TO BE INCLUDED IN THE AUDITORS REPORT
4) DESCRIPTION OF EACH PARAGRAPH TO BE INCLUDED IN CARO 2020
How to Begin Secretarial Audit (Compliance of All Applicable Law )Pavan Kumar Vijay
My Presentation at ICSI on 13/03/2015- "How to Begin- Secretarial Audit".
Secretarial Audit is a process to check compliance with –
• the provisions of various laws and Rules/Regulations/Procedures,
• maintenance of books, records etc,
• by an independent professional to ensure that the company has complied with the legal and procedural requirements and also followed due processes.
• the Board of Directors has to give explanation in the Board’s Report to every qualification and observation or other adverse remark made by the Secretarial Auditor.
•So we can say that the Board of Directors has to ensure that there should be a system in the company through which Compliance Officer can Control on all compliances under all applicable Laws.
Read more...
When non-residents are not required to file tax returns for income earned in ...DVSResearchFoundatio
Key Takeaways:
Charging section for taxability of non-residents
Incomes of non-residents for which no returns to be filed
Conditions to be satisfied for non-filing of returns
Representative assessee and its liability
This slideshare contains all the provision of CARO 2015 which is applicable from 10th of April 2015.
Further relevant extract from Companies Act 2013 has been made.
Key Takeaways:
Enhanced reporting requirements in CARO, 2020
Significant changes in CARO, 2020
Matters specified in Auditor's report
Comparison between CARO, 2020 and CARO, 2016
Key Takeaways:
Provisions governing RPT under Companies Act, 2013, SEBI (LODR), IND AS
Statutory compliances for RPT
Approval requirements for RPT
Disclosures norms for RPT under various statutes
In India, Companies Act, 2013 provides for compulsory Secretarial Audit by Listed Companies and other Public Companies where Paid Up Capital is 50 crores or more or turnover is 250 crores or more
1.)Four Types of Audit Report by Independent Auditors
2.)The Steps to be Done by the Auditors Before They Receive New Engagement With Clients
3.)The Contents Emphasis in the Audit Engagement
The most comprehensive definition of internal audit is given by the IIA, USA. It is,
"Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes."
The purpose of the presentation is to provide clarification for a better understanding of what internal audit definition, objectives, functions, stages and reporting are all about? What difference does it make in the presence of an external audit? How different is its scope from that of the external audit? How internal audit standards contribute to better performance of internal audit work and its reporting to the Board or Audit Committee?
Reporting is the most important client communication after client-onboarding. It is an integral part of SMM and this is where you show the return on investment (ROI) to your clients and justify your digital budget. Good reporting is crucial to your success as a search engine marketer.
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Preparing these FB Ads reports in excel is exhausting and time consuming. Account Managers spend almost 1/3 of their time preparing excel reports for their clients. This is an insane waste of time, when all of this can be automated. As an account manager your core value addition is account optimization and not excel reporting!
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Dewan P.N. Chopra & Co. is a reputed Chartered Accountants Firm in India, actively engaged in a full service, multi-disciplinary practice under four core services verticals – Taxation, Regulatory, Transaction Advisory and Audit & Assurance. The Firm has immense experience rendering diverse professional services to an extensive base of national & international clients and is an established name in its field.
A financial statement audit is bound to produce questions on financial statement reporting, and many are matters that are better addressed before the start of the audit. Questions addressed during the reporting year can save not-for-profit organizations a lot of time during their next audit and could eliminate potential control deficiencies reported as a result of addressing these prior to the audit. The following are among the top questions we routinely hear from our clients.
Financial Reporting
Anas Alzadjali
ST10299
Roslin Lazarus
Introduction
Analysis of different regulatory framework and governance applicable GIC’s investment strategies and current market operations.
Based on the published annual report of GIC for the year 2019.
ASSUMPTION
GIC consider establishing a joint stock company as a part of its expansion plan
This presentation analysis different regulatory framework and governance applicable to GIC’s investment strategies and current market operations based on the published annual report of GIC for the year 2019, with the assumption that GIC is seriously considering establishing a joint stock company with majority controlling interest in Singapore and India as a part of its expansion plan.
2
Continuation
Financial reporting is the declaration of the financial details to the divergent stakeholders concerning the financial operation and the financial position of the firm for a specified period of time.
Financial reporting standards are the keys that defines the practice standards and financial accounting policies and performs as its basis.
Enhances the financial reporting openness in an international position.
Performs as the accounting end product.
Definition
Financial reporting : declaration of the financial details to the divergent stakeholders concerning the financial operation and the financial position of the firm for a specified period of time.
Financial reporting standards: keys that defines the practice standards and financial accounting policies and performs as its basis.
Enhances the financial reporting openness in an international position.
Performs as the accounting end product.
Components of the financial reporting include;
The Financial statement
Notes to the Financial statement
The prospectus
The Management discussion and analysis
3
Elements Of Financial Statement
The financial statement elements are;
Income Statement : Expenses, Revenues, Purchases and Sales
Balance Sheet: Assets , Liabilities and Capital
Cashflow statement: cashflow from operating activities, investment and financing.
Change in equity.
And notes
Financial statement comprise the critical report of the business that gives financial information which can be used by the stakeholders.
The financial statement elements are;
Income Statement covering expenses, revenues, purchases and sales
Balance Sheet covering assets , liabilities and capital
Cashflow statement covering cashflow from operating activities, investment and financing.
Change in equity showing any change in equity over the period
And notes that gives explanations to the statements.
4
Financial Reporting Objective
Financial statements have been prepared in accordance with: International Financial Reporting Standards (IFRSs),
Applicable disclosure requirements of the Capital Market Authority (CMA)
Relevant requirements of the Commercial Companies Law.
Their objectives are:
To provide information concerning the financial posi ...
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According to International Accounting Standard Board (IASB), the objective of financial reporting is “to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.”
The Companies Act, 2013 has introduced some new requirements relating to audits and
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Section 143(3)(i) of the Act which requires the statutory auditor to state in his audit report
whether the company has adequate internal financial controls system in place and the operating
effectiveness of such controls. Here is Brief and simple explanation about IFC.
The Companies Act, 2013 has introduced some new requirements relating to audits and
reporting by the statutory auditors of companies. One of these requirements is given under
Section 143(3)(i) of the Act which requires the statutory auditor to state in his audit report
whether the company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
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3. PREFACE
Auditor Reporting a few additional matters as a part of Audit report for a
specified list of companies which helps the stakeholders to understand the
company in a much better way.
4. INTRODUCTION
Came into Enforcement on 29th March 2016.
CARO 2016 has replaced into CARO 2015 with additional focus on Frauds
committed by company, Fund raising & its utilisation etc.
Applicable for reporting for the FY 2015-16 i.e. as it was made applicable
from the 1st April 2016.
5. APPLICABILITY OF CARO 2016
Applicable for all companies including the foreign company u/s 42 of CA 2013.
Exceptions –
Banking Company
Insurance Company
Section 8 Companies
OPC##
Private Limited-
Paid up Capital & Reserves- Not Exceeding INR 1 Cr
Total Borrowings Outstanding- Not Exceeding INR 1 Cr from any Bank or
FI
Turnover not exceeding INR 10 cr during FY at any point of time
6. Reporting on Fixed Assets
Reporting on the Maintenance of proper books
records like quantitative details of fixed
assets
Verification of fixed assets by the
management at fixed intervals to verify if any
material discrepancies exist, if any.
Verify theTitle deeds of Immovable assets if
there are held in the name of the company.
CRITICAL ANALYSIS
Quantitative details mainly include items like
Asset Classifications, Freehold Premises,
Assets under Deferred payment Guarantee,
Source of procuring funds.
PhysicalVerification always depends on the
case to case i.e. type & size of company.
Verification of title deeds is a new provision as
per CA 2013 which ensures that the director’s
personal property is not added in the
companies Books of accounts.
7. Reporting on Inventory
Reporting on the Physical verification of
Inventory at reasonable intervals.
Verify if any material discrepancies were
noticed during such stock verification and try
to understand the reason of such discrepancies
if material.
CRITICAL ANALYSIS
Inventory mainly includes Raw material ,
Work in Progress & Finished goods.
PhysicalVerification always depends on the
case to case i.e. type & size of company.
Proper records include the inventory reports,
verification reports, scrap report from costing
department.
Internal controls for inventory should be
checked so that any weaknesses should be
reported and rectified by them management
8. Reporting on Secured &
Unsecured Loans
Maintenances of Register under
Section 189 of CA 2013 for the
grant of Secured, Unsecured
loans to LLP, Companies, Firms.
Verify whetherT&C for grant of
loans are not against the
interest of the companies.
Schedule of Interest & Principal
amount is duly maintained by
the company.
Amounts overdue for 90 days,
proper action has been taken to
recover the same.
CRITICAL ANALYSIS
Increase of the auditor
responsibility to cover LLP’s even
in the grant of loans by company.
Bringing better transparency in
terms of defaulters by replacing
the monetary value of INR 1 lac in
CARO 2015 with the pre-defined
period of 90 days.
Verification of the Loan
agreements & Related party
transactions.
9. Reporting on Section 185 & 186
Compliance with Section 185 & 186.
If not, the details have to be submitted reasons
stating about the particulars.
CRITICAL ANALYSIS
Increase of the auditor responsibility to
ensure that the auditors along with directors
be punishable for non-compliance of the
provisions.
Boom to Private companies post Notification
inJune 2015 mentioning the applicability to
Pvt Ltd.
Additional step to bring more transparency
for the corporate where public has vested
interest.
10. Reporting on Deposits
Compliance to the Directives issues by RBI and
compliance to Section 73-76 & rules framed
under CA 2013.
If not, the nature of contravention has to be
mentioned.
Any order passed by Company Law Board or
NationalCompany LawTribunal or Reserve
Bank of India or any court or any other tribunal
has to be specified.
Reporting on Cost Audit
Compliance of Cost Records u/s 148 of CA 2013
whether proper accounts & books have been
maintained.
11. Reporting on Statutory dues
Company’s timely payment of Statutory dues
like EPF, ESI, Income tax, SalesTax, Customs ,
Service tax & Excise.
If there is any amount outstanding for a period
more than 6 months as on the 31st March it has
to be reported along with the reason.
Any Statutory amount pending against
disputes, if not deposited against the order
raised by concerned department has to be
reported
CRITICAL ANALYSIS
CARO 2016 has abolished the focus on
Wealth tax and included Service tax into the
compliance list
CARO 2016 has removed the IPEF transfer of
funds which was a part of CARO 2015.
12. Reporting on Default on payment
to Banks & Fin Institutions
Report if any company has defaulted in
repayment to Financial institutions or banks or
debenture holders at any point of time during
the year.
If yes, the following details have to
provided-
Period of default.
Amount
Lender wise details in case of default to bank
& FI’s .
CRITICAL ANALYSIS
Awaking call by Govt to ensure we don’t see
any more Sahara’s or any other Financial
frauds happening..
Step to increase the transparency and
Corporate governance by keeping a eye of
defaulters.
List of Lender will the help Govt to
understand the exposure of each of Lender to
the company.
13. Reporting on Utilisation of money
raised
Reporting on Utilisation of money raised by
the way of Public Issue / Further issue / Debt
funding raising or term loans for purpose it has
been raised.
If not, then the details together with delays /
default and subsequent rectification, if any, as
may be applicable, be reported.
CRITICAL ANALYSIS
New emphasis has been made on Public issue
& Further issue has been made in addition to
the term loans.
Focus towards the Primary & Secondary
market helps to keep the track on how &
where the money is spent.
Delay in utilisation of fund raised helps the
management to be cautious before the fund
raise.
14. Fraud Reporting
Reporting on the frauds which have been
committed on or by company or any frauds
which have been committed its officers /
employees.
CRITICAL ANALYSIS
Special focus has been made for the frauds
which have been committed which have
committed by the officers/ employees
towards the company.
This is a addition to CARO 2015 where the
focus was restricted to frauds by the
company.
Strict check to ensure the employees don’t
take the company for granted and the
regulators are vigilant to ensure we don’t see
another Satyam again.
15. Reporting on Managerial
Remuneration
Reporting on whether the Remuneration
payable to board of directors i.e. MD,Whole
time directors, Non Executive directors has
been in compliance to section 197 of the CA
2013.
If not, the excess amount has to be stated and
process should be initiated to get the refund .
CRITICAL ANALYSIS
A new inclusion in CARO 2016 to keep the
check that profit making companies don’t
take the step to decrease the profits and end
in losses to avoid of taxes.
A checkpoint to ensure the black money
through tax evasion is been caught hold and
the dummy directors been cautioned.
16. Reporting on Nidhi Company
Reporting on whether the Nidhi Company has
complied with the Net Owned Fund in the ratio
of 1: 20 to meet out the liability &
whether the Nidhi Company is maintaining
10% liquid assets to meet out the
unencumbered liability.
CRITICAL ANALYSIS
A new inclusion in CARO 2016 which was
earlier in CARO 2003 where the special
emphasis was laid towards chit fund
companies.
17. Reporting on Related party
transactions
Reporting on all the related party transactions
by ensuring the compliance to Section 177 &
188 of the CA 2013, Accounting standard,
where ever applicable.
The same should be disclosed in the financial
statements too
CRITICAL ANALYSIS
A new inclusion in CARO 2016 to ensure the
false practice are put a check by the
regulatory and bring in the concept of Arm
length Pricing transactions for conduct of
business.
Additional responsibility on auditor to prevent
the frauds happening like DLF & RobertVadra
case.
18. Reporting on Funds raising
Reporting whether company has made any
preferential allotment / private placement of
shares or fully or partly convertible debentures
during the year
If YES, then the compliance to Section 42 of
the CompaniesAct, 2013 & the amount raised
have been used for the purposes for which the
funds were raised.
If not, the details have to be reported.
CRITICAL ANALYSIS
A new inclusion in CARO 2016 as India has
been undergoing through a Fund Raising
activities for many start-ups & Mid-size
companies.
Earlier CARO 2003 have focused only on
preferential allotment only and Private
placement has newly been added.
19. Reporting on Non-Cash
transactions
Reporting on whether any directors or any
persons concerned with of the company has
entered in any non-cash transactions.
If yes, verify whether the compliance of
Section 192 of the CA 2013.
CRITICAL ANALYSIS
This is a new inclusion in CARO 2016
The significance of this section is to identify if
that no director takes any undue advantage
for entering into a non-cash transaction with
passing a proper board resolution and
mentioning the particulars of such asset & its
value as per the registered value.
20. CONCLUSION
It is now clearly evident that areas mentioned in the Companies (Audit Report) Order 2016
will help the stakeholders to identify any weaknesses in the company will help them to take
a decision whether the financial statements showTrue and fair view of the company.
The new additions relating to the Managerial remuneration, non-cash
transactions with directors, Nidhi Company regulations, Related party transactions have put
a heavy load on the Auditor to report any deviations from the provisions of the act.
It’s always better early than be late……………….
Editor's Notes
##- Once it exceeds the borrowing limits of INR 1cr, they too fall applicable for the caro reporting