ICAI has Issued Revised Guidance Note on Companies Auditor's Report Order 2022 Revised Edition
The Ministry of Corporate Affairs (MCA) issued the Companies (Auditor’s Report) Order, 2020 (CARO 2020) on 25th February 2020. CARO 2020 was initially applicable for audits of financial year 2019-20 and onwards. Subsequently its applicability was deferred two times vide notification dated 24th March 2020 and 17th December 2020. CARO 2020 is applicable for audits of financial year 2021-22 and onwards. CARO 2020 contains several significant changes and several new reporting requirements vis-à-vis CARO 2016. In July 2020, the Auditing and Assurance Standards Board of ICAI issued the Guidance Note on the Companies (Auditor’s Report) Order, 2020 (“Guidance Note on CARO 2020”) to provide detailed guidance to auditors on various reporting requirements of CARO 2020.
The MCA vide notification dated 24th March 2021 issued the amendment to Schedule III to the Companies Act, 2013. The Schedule III, as amended, requires various disclosures in financial statements. Some of these disclosure requirements are corresponding to clauses of CARO 2020. The Auditing and Assurance Standards Board felt it necessary to undertake revision of the Guidance Note on CARO 2020.
We feel immense pleasure in placing in hands of the members this revised 2022 edition of the Guidance Note on CARO 2020 issued by the Board under the authority of the Council of ICAI.The Guidance Note has been revised to provide guidance on the corresponding disclosure requirements of Schedule III to the Companies Act, 2013 which pertain to the clauses of CARO 2020 and to align guidance with latest provisions of Companies Act,2013 and Rules thereunder and other relevant laws & regulations which are referred to in the Guidance Note. The Guidance Note has been written in easy to understand language and contains detailed guidance on all clauses of CARO 2020.