The document presents an auditor's report on Companies Act 2013 and CARO 2015, detailing the applicability and requirements for audit reports including fixed assets, inventory, loans, and fraud reporting. It outlines specific conditions under which companies and certain exceptions must comply, alongside statutory dues and internal control systems. The document serves as a comprehensive guide for auditors assessing compliance and reporting on corporate governance matters.

1. Companies (Auditor’s Report) Order 2015
CARO 2015
Presented By:
Dipendra Prasad Poudel
mailfordipendra@gmail.com

2. Presented By: Dipendra Prasad
Poudel
Direction to Readers
Dear Reader,
Thank you for choosing this SlideShare.
For better experience as well to save your time, I suggest you to download this PowerPoint and view this in full screen mode in
your computer by pressing F5 because all the tab like fixed assets, inventory, deposits etc. are hyperlinked and you can move up
and down instantly simply by pressing the buttons rather than moving up and down.
In this presentation, you can find relevant extract from companies act 2013 as well which makes this as a full fledged single
source of reading CARO 2015.
Please pass your valuable suggestions and feedback so that I can give you better content material.
Thanks and Regards
Dipendra Prasad Poudel
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3. Presented By: Dipendra Prasad
Poudel
Applicability of CARO
Applicable to every company
including foreign company
Exceptions from Applicability of CARO 2015
1) Banking Companies
2) Insurance Companies
3) Not for Profit Companies ( Section 8 Companies)
4) One Person Companies
5) A private limited companies with
a) paid up capital and reserves not more than INR fity Lakhs and;
b) doesn’t have outstanding loan INR 25 Lakhs from any bank or financial
institution and;
c) Doesn’t have turnover exceeding INR five crore during at any point
during FY
Applicable From
10th April 2015

4. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Usage of loan
Fraud
Reporting
Weather a company is maintaining proper records showing full particulars, including quantitative details
and situation of fixed assets.
whether these fixed assets have been physically verified by the management at reasonable intervals;
whether any material discrepancies were noticed on such verification and if so, whether the same have
been properly dealt with in the books of account.
Default and
Guarantee of loan

5. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Usage of loan
Fraud
Reporting
Whether physical verification of inventory has been conducted at reasonable intervals by management.
Are the procedures of physical verification of inventory followed by management reasonable and adequate
in relation to the size of company and nature of its business. If not adequacies of such procedure shall be
reported.
Whether the company is maintaining proper records of inventory and whether any material discrepancies
were noticed on physical verification and if so, weather the same has been properly dealt in the books of
accounts.
Default and
Guarantee of loan

6. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Usage of loan
Fraud
Reporting
whether the company has granted any loans, secured or unsecured to companies, firms or other parties
covered in the register maintained under section 189 of the Companies Act. If so,
whether receipt of the principal amount and interest are also regular; and
If overdue amount is more than rupees one lakh, whether reasonable steps have been taken by the
company for recovery of the principal and interest;
Section 189 of Companies Act 2013: Section 189 mandates companies to maintain
registers giving separately the particulars of all the contracts or arrangement to
which subsection 2 of section 184 (directly or indirectly concerned in a contract or
arrangement or proposed contract) or section 188 applies ( Related Party
Transaction)
Default and
Guarantee of loan

7. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Usage of loan
Fraud
Reporting
Is there an 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.
Whether there is a continuing failure to correct major weaknesses in internal control system.
Default and
Guarantee of loan

8. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Usage of loan
Fraud
Reporting
In case company has accepted deposits, ensure that it has complied with directives issued by Reserve Bank
of India and the provision of sections 73 to 76 or any other relevant provision of companies act and the
rules framed under there, where applicable, complied with? If Not, nature of contraventions should be
stated; If an order has been passed by company law board or RBI or any court or any other tribunal,
whether the same has been complied or not.
General Circular 5/2015 Dated 30/03/2015 : Deposits received by private companies prior to 1st April,
2Ol4 shall not be treated as 'deposits‘ subject to the condition that relevant private company shall
disclose, in the notes to its financial statement for the financial year commencing on or after 1st April, 2014
the figure of such amounts and the accounting head in which such amounts have been shown in
the financial statement.
Any renewal or acceptance of fresh deposits on or after 1st April, 2014 shall, however, be in accordance
with the provisions of Companies Act, 20 13 and rules made thereunder
In next slide there is brief introduction to section 73 and 76.
Default and
Guarantee of loan

9. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Default and
Guarantee of loan
Usage of loan
Fraud
Reporting
Where maintenance of cost records has been specified by Central Government under Sub-section 1 of
section 148 of the companies act, whether such accounts have been made and maintained.
Section 148 of companies act 2013: Central Government to specify audit of items of cost in respect of
certain
companies.
Brief description of section 73 and 76 : Section 73 of Companies act 2013 prohibits invite, accept or
renew of deposits from public (except for banking and non banking financial company) except
prescribed in manner laid down by Chapter V.
Section 76 allows certain companies to accept deposits from public subject to compliance of
requirements of section 73 (2)

10. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Default and
Guarantee of loan
Usage of loan
Fraud
Reporting
Undisputed Statutory Dues : Is company regular in depositing all kind of statutory dues including provident
fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, duty of excise, VAT, cess and
any other statutory dues as at the day of last day of financial year concerned for a period of more than six
months of they become payable shall be indicated by the auditor.
Disputed Statutory Dues : In case dues of income tax or sales tax or wealth tax or service tax or duty of
customs or duty of excise or value added tax or cess have not been deposited on account of any dispute,
then the amount$ involved and the forum where dispute is pending shall be mentioned. (A mere
representation to the concerned Department shall not constitute a dispute).
Transferred to investor education and protection fund : whether the amount required to be transferred to
investor education and protection fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

11. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Default and
Guarantee of loan
Usage of loan
Fraud
Reporting
In case of those companies which has been registered for a period not less than five years
its accumulated losses at the end of the financial year are not less than fifty per cent of its net worth and
whether it has incurred cash losses in such financial year and in the immediately preceding financial year;

12. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Default and
Guarantee of loan
Usage of loan
Fraud
Reporting
whether the company has defaulted in repayment of dues to a financial institution or bank or debenture
holders? if yes, the period and amount of default to be reported:
whether the company has given any guarantee for loans taken by others from bank or financial institutions,
the terms and conditions whereof are prejudicial to the interest of the company
Please Note : Default and Guarantee of loan has been described under two separate
paragraphs on document released by MCA. I have just merged it to utilize the space.

13. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Guarantee of
loan
Usage of loan
Fraud
Reporting
whether term loans were applied for the purpose for which the loans were
obtained;
You might be interested in CSR. Click here to view SlideShare

14. Presented By: Dipendra Prasad
Poudel
Matters to be Included in Audit ReportFixed Assets
Inventory
Loans to
covered U/S 189
Deposits
Internal
Control
System
Cost Records
Statutory Dues
Accumulated
losses
Guarantee of
loan
Usage of loan
Fraud
Reporting
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whether any fraud on or by the company has been noticed or reported during the year; If yes, the nature
and the amount involved is to be indicated.

15. Presented By: Dipendra Prasad
Poudel
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