INDEX

SR NO.

TOPIC

PAGE NO

TRENDS/CHANGES IN CARO 15-16

BACKGROUND OF CARO 2016

TYPES PF COMPANIES COVERED

10

SCOPE & APPLICABILITY OF CARO

13

BIBLIOGRAPHY

19

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THE FOLLOWING CHANGES/TRENDS HAVE BEEN MADE IN CARO

FROM 2015
The ministry of corporate affairs, vide notification dated 29 March 2016, has
issued the Companies (Auditors Report) Order, 2016 which will be applicable
from financial years commencing on or after 1 April 2015. The new Order
introduced few new reporting requirement by curtailing few in comparison of
Companies (Auditors Report) Order, 2015. Following is the comparison
between CARO 2015 and 2016:
Sr. No.

Companies (Auditors Report)

Order, 2015

Companies (Auditors
Report) Order, 2016

Remarks

Applicability

Applicable on all companies

other than:

Applicable on all companies

other than:

-Banking Company

-Banking Company

Changes in respect of
applicability of
CARO on Private
limited company

-Insurance Company

-Insurance Company

-Sec 8 Company

-Sec 8 Company

-One Person Company

-One Person Company

Private Limited company not

having

Private Limited company (not

being holding/subsidiary of
public company) not having

:Paid up Capital and reserves>50

Lacs during the year

:Paid up Capital+ reserves>1

crores as on balance sheet date

:loans outstanding> 25 Lacs

during the year

:loans outstanding> 1 crores

during the year

:Turnover > 5 crores during the

year

:Total revenue as per schedule

II>10 crores

-Whether the company is

maintaining proper records
showing full particulars,
including quantitative details and
situation of fixed assets.

-Whether the 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

-whether these fixed assets

have been physically verified

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New CARO demands

additional reporting
for such immovable
assets whose title are
not owned by the
company.

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;

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;
-Whether the company holds
title of immovable property
held by the company, If not
provides the details thereof

-whether physical verification of

inventory has been conducted at
reasonable intervals by the
management
-Are the procedures of physical
verification of inventory
followed by the management
reasonable and adequate in
relation to the size of the
company and the nature of its
business. If not, the inadequacies
in such procedures should be
reported

-whether physical verification

of inventory has been
conducted at reasonable
intervals by the management
and if any discrepancies has
been notices are properly dealt
with or not.

The requirement has

been curtailed to
physical verification
and treatment of
discrepancies noticed.
The auditor no need
to report for records
maintained by the
company for
inventories.

-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,

The new CARO

provides for the term
and conditions of
loan provided.

-Whether the company is

maintaining proper records of
inventory and whether any
material discrepancies were
noticed on physical verification
and if so, whether the same have
been properly dealt with in the
books of account;

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-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

-Whether the schedule of

repayment is stipulated,
whether the repayment is
regular or not.

-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;

-Whether the term and

conditions of the grant of such
loan are prejudicial to the
interest of the company

The new carob

provides for overdue
payment for more
than 90 days instead
outstanding of
amount above the
threshold limit of 1
lac

-If the amount is over due ,

then state the amount over due
for more than 90 days and what
steps company has followed.

-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.

-In respect of loans,

investments, guarantees, and
security whether provisions of
section 185 and I86 of the
Companies Act, 2013 have
been complied with. If not,
provide the detail thereof.

The new CARO

instead of internal
control provides for
the loans and
investments and other
which are covered
under sec 185 and
186 of the 2013 Act.

-In case the company has

accepted deposits, whether the
directives issued by the Reserve
Bank of India and the provisions
of sections 73 to 76 or any other
relevant provisions of the
Companies Act and the rules
framed thereunder, where
applicable, have been complied
with? If not, the nature of
contraventions should be stated;
If an order has been passed by
Company Law Board or National
Company Law Tribunal or
Reserve Bank of India or any
court or any other tribunal,
whether the same has been
complied with or not?

-In case the company has

accepted deposits, whether the
directives issued by the
Reserve Bank of India and the
provisions of sections 73 to 76
or any other relevant provisions
of the Companies Act and the
rules framed thereunder, where
applicable, have been complied
with? If not, the nature of
contraventions should be
stated; If an order has been
passed by Company Law Board
or National Company Law
Tribunal or Reserve Bank of
India or any court or any other
tribunal, whether the same has
been complied with or not?

No Change

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where maintenance of cost

records has been specified by the
Central Government under subsection (1) of section 148 of the
Companies Act, whether such
accounts and records have been
made and maintained;

where maintenance of cost

records has been specified by
the Central Government under
sub-section (1) of section 148
of the Companies Act, whether
such accounts and records have
been made and maintained;

No Change

-Is the company regular in

depositing undisputed statutory
dues including provident fund,
employees state insurance,
income-tax, sales-tax, wealth tax,
service tax, duty of customs,
duty of excise, value added tax,
cess and any other statutory dues
with the appropriate authorities
and if not, the extent of the
arrears of outstanding statutory
dues as at the last day of the
financial year concerned for a
period of more than six months
from the date they became
payable, shall be indicated by the
auditor.

-Is the company regular in

depositing undisputed statutory
dues including provident fund,
employees state insurance,
income-tax, sales-tax, wealth
tax, service tax, duty of
customs, duty of excise, value
added tax, cess and any other
statutory dues with the
appropriate authorities and if
not, the extent of the arrears of
outstanding statutory dues as at
the last day of the financial
year concerned for a period of
more than six months from the
date they became payable, shall
be indicated by the auditor.

In new CARO the

auditor need not
provide for third limb
of old CARO
requirement

-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
amounts involved and the forum
where dispute is pending shall be
mentioned. (A mere
representation to the concerned
Department shall not constitute a
dispute).

-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 amounts
involved and the forum where
dispute is pending shall be
mentioned. (A mere
representation to the concerned
Department shall not constitute
a dispute).

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
5 | Page

thereunder has been transferred

to such fund within time.

-Whether in case of a company

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;

-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

The auditor need not

report on point 8 of
old CARO instead
point 9 of Old CARO
has been shifted to
Point 8 of new
CARO.

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 moneys raised by way

of initial public offer or further
public offer (including debt
instruments) and term loans
were applied for the purposes
for which those are raised. If
not, the details together with
delays or default and
subsequent rectification, if any,
as may be applicable, be
reported;

Point 9 of old CARO

has been shifted to
point 8 of new
CARO. Point 9 of
new CARO asks for
utilization of end use
of money raised
through IPO and debt
instruments

10

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;

whether any fraud by the

company or officers or
employees has been noticed the
nature and the amount involved
is any fraud on the Company
by its or reported during the
year; If yes, to be indicated;

-Point no 12 of Old
CARO has been
shifted to point 10 of
New CARO.

Point 10 is no more
in existence

11

6 | Page

whether term loans were applied

for the purpose for which the
loans were obtained;

whether managerial
remuneration has been paid or
provided in accordance with
the requisite approvals

-Point 11 of old
CARO is covered in
point 9 of new
CARO.

mandated by the provisions of

section 197 read with Schedule
V to the Companies Act? If not,
state the amount involved and
steps taken by the company for
securing refund of the same;

Point 11 of New
CARO is new
insertion.

12

whether any fraud by the

company or officers or
employees has been noticed the
nature and the amount involved
is any fraud on the Company by
its or reported during the year; If
yes, to be indicated;

Whether the Nidhi Company

has complied with the Net
Owned Funds to Deposits in
the ratio of 1: 20 to meet out
the liability and whether the
Nidhi Company is maintaining
ten percent unencumbered term
deposits as specified in the
Nidhi Rules, 2014 to meet out
the liabilities:

-Point no 12 of Old
CARO has been
shifted to point 10 of
New CARO.
Point 12 of new
CARO is new
insertion.

13

whether all transactions with

the related parties are in
compliance with section 177
and 188 of Companies Act,
2013 where applicable and the
details have been disclosed in
the Financial Statements etc..
as required by the applicable
accounting standards:

New insertion

14

whether the company has made

any preferential allotment or
private placement of shares or
fully or partly convertibles
debentures during the year
under review and if so, as to
whether the requirement of
section 42 of the Companies
Act,2013 have been complied
with and the amount raised
have been used for the
purposes for which the funds
were raised. If not, provide the
details in respect of the amount
involved and nature of noncompliance:

New insertion

7 | Page

15

Whether the company has

entered into any non-cash
transactions with directors or
persons connected with him
and iI so, whether the
provisions of section 192 of
Companies Act, 2013 have
been complied with;

New insertion

16

Whether the company is

required to be registered under
section 45 IA of the Reserve
Bank of India Act, 1934 and if
so, whether the registration has
been obtained.

New in

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In accordance with the provisions of section 143(11) of the Companies Act, 2013
(CA, 2013), the auditors report of certain class or description of
companies shall include a statement on certain specified matters.
These reporting requirements on specified matters has now been prescribed under the Companies
(AuditorsReport) Order, 2016 (CARO 2016) issued by the Ministry of Corporate Affairs
(MCA) vide Order No. S.O.
1228(E) dated 29th March, 2016.
CARO 2016 has been issued in supersession of the Companies (Auditors Report) Order, 2015
and the same shall be applicable from the financial year 2015-16.

Background of the Companies (Auditors Report) Order 2016:

Earlier to CARO2016, the Companies (Auditors Report) Order, 2015 (CARO 2015) was
issued vide MCA Order No. S.O. 990(E) w.e.f. 10042015.
Actually, CARO 2015 had replaced the Companies (Auditors
Report) Order, 2003 (CARO 2003) issued by MCA in pursuance with the provisions of section
227(4A) of the
Companies Act, 1956.
With effect from 1st April, 2014, section 227(4A) of the Companies Act, 1956 ceased to be
operational after
notification of section 143(11) of CA, 2013 vide Notification No. S.O. 902(E) issued dated
27.03.2014.
Thereafter, in exercise of the powers conferred by subsection
9 | Page

(11) of section 143 (http://www.aubsp.com/section143auditorspowersdutiesauditreport/)

of CA, 2013 and in supersession of the CARO 2003, the Central
Government after consultation with the Institute of Chartered Accountants of India makes the
CARO 2015.
But, now the similar Order (CARO 2016) has been issued vide Order No. S.O. 1228(E) dated
29th March,
2016 to be applicable from the financial year 201516
onwards. Hence, you are required to comply with the
requirements of CARO 2016 from financial year commencing on and after first day of April
2015 i.e. FY
201516.
Is it mandatory to Comply CARO 2016?
Yes! In section 143(11) of CA, 2013 it is clearly stated that the Central Government may order
for the inclusion of a Statement on specified matters in the Auditors Report for specified class or
description of Companies.
Accordingly, CARO 2016 is issued by the CG in pursuance with the provisions of subsection
(11) of section 143 as an additional matters to be included in the report of auditors. Therefore,
CARO 2016 should be complied by the Statutory Auditor of every Company on which it
applies. From which Financial Year CARO 2016 is Applicable?
Every report made by the auditor in pursuance with the provisions of section 143 of CA, 2013
for Financial Year commencing on or after first day of April, 2015 should include CARO 2016.
Hence, the Companies (Auditors Report) Order, 2016 is applicable from FY 201516 and the
matters specified therein shall be included in each report made by auditor u/s 143 on the accounts
of every company to which CARO 2016 applies.

Type of Companies covered under the CARO 2016

The Companies (Auditors Report) Order, 2016 shall apply to every company including a foreign
company as defined in clause (42) of section 2 of the Companies Act, 2013.
According to section 2(42) of CA, 2013, Foreign Company means any company or body
corporate incorporated
outside India which
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(a) has a place of business in India whether by itself or through an agent, physically or through
electronic
mode; and
(b) conducts any business activity in India in any other manner.
Class of companies which are excluded from applicability of CARO 2016
All types of Companies specified in paragraph 1 of CARO 2016 are specifically exempted
from application of
CARO. In other words, CARO 2016 applies to all Companies except certain categories or class
of Companies
specifically exempted therein.
Accordingly, following are the class of companies whose auditors are not required to comment
on matters
specified in CARO 2016.
(i) Banking Company:
CARO 2016 shall not apply to a banking company as defined u/s 5(c) of the Banking
Regulation Act,
1949.
10/15/2016 Complete Notes on Companies (Auditors Report) Order, 2016
(ii) Insurance Company:
CARO 2016 shall not be applicable to an insurance company as defined under the Insurance
Act, 1938.
(iii) Companies registered with Charitable Objects:
Any company which has been incorporated and licensed to operate under section 8 of CA, 2013
shall not be
required to comply with CARO 2016.
(iv) One Person Company:
A One Person Company (OPC) as defined under clause (62) of section 2 of CA, 2013 is not
covered under
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CARO 2016. OPC means a company which has only one person as a member.
(v) Small Company:
A small company as defined under section 2(85) of the Companies Act, 2013 is excluded from
the scope of
CARO 2016.
According to section 2(85) of CA, 2013 small company means a company, other than a public
company,
(i) paidup
share capital of which does not exceed 50 Lakhs or such higher amount as may be
prescribed which shall not be more than 5 Crore; and
(ii) turnover of which as per its last profit and loss account does not exceed 2 Crore or such
higher
amount as may be prescribed which shall not be more than 20 Crore:
Note that the definition of Small Company has been amended vide the Companies (Removal of
Difficulties)
Order, 2015 [S.O. 504(E)] w.e.f. 13th February, 2015. However, following companies will not
qualify as a
Small Company:
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act;
(vi) Private Company:
The auditors of the following private limited companies are not required to comment on the
matters
prescribed under CARO 2016:
a) Holding/Subsidiary of Public Company: A private company which is not a subsidiary or
holding company of a public company; and

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b) Capital 1 Crore: A private company having a paid up capital and reserves and surplus not
more than rupees ONE Crore as on the balance sheet date; and
c) Loan 1 Crore: Such private company does not have total borrowings exceeding rupees
ONE Crore from any bank or financial institution at any point of time during the financial year;
and
d) Turnover 10 Crore: Such private company does not have a total revenue exceeding rupees
TEN Crore during the financial year as per the financial statements.
Such revenue means revenue as disclosed in Scheduled III to the Companies Act, 2013 and
includes revenue from discontinuing operations.
There is another relief for the companies is that the Companies (Auditors Report) Order, 2016
shall also not apply to the auditors report on Consolidated Financial Statements (CFS) of the
company.

Scope of Applicability of CARO 2016:

The scope of applicability of CARO 2016 covers more number of companies in compare to the
previous
CARO 2003. However, the MCA has now relaxed the application/scope of CARO on the
private companies
by increasing the applicability thresholds limit and therefore, CARO 2016 would be applicable
to less number of companies w.e.f. April 2015.
You should note that the concept of OPC and Small Company were not existed under the
companies Act, 1956 and such class of companies are newly introduced under the provisions of
the Companies Act, 2013.
There are mainly two factors which has widened the application of CARO2016
viz. Small Companies and
Foreign Companies.
A) Small Companies: As we know that the concept of Small Company is newly introduced in the
Companies Act, 2013. Further, the definition of Small Company has been amended vide the
Companies
(Removal of Difficulties) Order, 2015 w.e.f. 13th February, 2015.

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According to the revised definition of Small Company, the both conditions as prescribed in
subclause (i)and (ii) of clause (85) of section 2 i.e. paid up share capital and turnover criteria
should be met by company to fall under the definition of Small Company.
Thus, fewer companies are expected to meet the criteria to fall under the definition of Small
Company and therefore be outside the scope of applicability of CARO 2016.
B) Foreign Company: In compare to the Companies Act, 1956, the definition of Foreign
Company has also been widened in section 2(42) of the Companies Act, 2013. Now, a company
shall become foreign company if such company or body corporate incorporated outside India has
a place of business in India whether by itself or through an agent, physically or through
electronic mode and conducts any business activity in India in any other manner.
Hence, more companies would get covered under the applicability of CARO 2016.
Additionally, the reporting requirement has also been enlarged in CARO 2016 to increase the
responsibility of the statutory auditors while preparing their reports in compliance with the
provisions of section 143 of the Companies Act, 2013. Which Matters are required to be included
in Auditors Report?
As compared to the CARO 2003, the reporting requirements under the CARO 2015 (FY
20142015) were significantly reduced from 21 clauses to 12 clauses. However, the Central
Government has further increased the number of reporting clauses from 12 to 16 in CARO
2016 for financial years commencing on or after 1st April, 2015.
As per paragraph 3 of CARO 2016, following certain matters shall be included in the report
made by the auditor under section 143 of the Companies Act, for the financial year commencing
on or after 1st April, 2015:
1) Fixed Assets [Clause 3(i)]:

Following matters shall be included in the auditors report relating to Fixed Assets of the
company.
a) Proper Records: Whether the company is maintaining proper records showing full particulars,
including quantitative details and situation of fixed assets;
b) Physical Verification: 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;
c) Title Deed: Whether the title deeds of immovable properties are held in the name of the
company. If not, provide the details thereof;
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2) Inventory [Clause 3(ii)]:

Following matters shall be included in the auditors report relating to Inventory of the company.
Physical Verification: Whether physical verification of inventory has been conducted at
reasonable intervals by the management; 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;

3) Loan given by Company [Clause 3(iii)]:

Whether the company has granted any loans, secured or unsecured to companies, firms, Limited
Liability Partnerships (LLP) or other parties covered in the register maintained under section 189
of the Companies Act, 2013. If so,
a) Terms and Conditions: Whether the terms and conditions of the grant of such loans are not
prejudicial to the companys interest.
b) Regular Recovery: Whether the schedule of repayment of principal and payment of interest
has been stipulated and whether the repayments or receipts are regular;
c) Steps for Recovery: If the amount is overdue, state the total amount overdue for more than 90
days, and whether reasonable steps have been taken by the company for recovery of the principal
and interest.
4) Loan to Directors and investment by Company [Clause 3(iv)]:
In respect of loans, investments, guarantees, and security whether provisions of section 185 and
186 of the Companies Act, 2013 have been complied with. If not, provide the details thereof.
5) Deposits [Clause 3(v)]:
In case, the company has accepted deposits, whether the following has been complied with:
Directives issued by the Reserve Bank of India (RBI); The provisions of sections 73 to 76 or any
other relevant provisions of the Companies Act, 2013 and the rules framed thereunder; and If an
order has been passed by Company Law Board (CLB) or National Company Law Tribunal
(NCLT) or Reserve Bank of India (RBI) or any court or any other tribunal. However, if any of
the above not complied with, the nature of contraventions should be stated.

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6) Cost Records [Clause 3(vi)]:

If the Central Government has specified maintenance of cost records under section 148
(1) of the Companies Act, 2013 whether such accounts and records have been made and
maintained.
7) Statutory Dues [Clause 3(vii)]:
Following matters shall be reported for statutory dues and disputes for tax and duties.
a) Statutory Dues for more than 6 Months: Whether the company is regular in depositing
undisputed statutory dues with the appropriate authorities including:
i) Provident fund;
ii) Employees state insurance;
iii) Incometax;
iv) Salestax;
v) Service tax;
vi) Duty of customs;
vii) Duty of excise;
viii) Value Added Tax (VAT);
ix) Cess; and
x) Any other statutory dues.
If the company is not regular in depositing such statutory dues, the extent of the arrears of
outstanding
statutory dues as at the last day of the financial year concerned for a period of more than six
months
from the date they became payable, shall be indicated by the auditor.
b) Dispute for Tax and Duty: In case dues of income tax or sales tax or service tax or duty of
customs or duty of excise or value added tax have not been
deposited on account of any dispute, then the amounts involved and the forum where dispute is
pending shall be mentioned.
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Note that a mere representation to the concerned Department shall not constitute a dispute.
8) Repayment of Loans [Clause 3(viii)]
Whether the company has defaulted in repayment of loans or borrowing to a financial institution,
bank, Government or dues to debenture holders? If yes, the period and the amount of default to
be reported. Note that in case of defaults to banks, financial institutions, and Government, lender
wise details to be provided.
9) Utilisation of IPO and further Public Offer [Clause 3(ix)]:
Whether moneys raised by way of Initial Public Offer (IPO) or further public offer (including
debt instruments) and term loans were applied for the purposes for which those are raised. If not,
the details together with delays or default and subsequent rectification, if any, as may be
applicable, be reported;
10) Reporting of Fraud [Clause 3(x)]:
Whether any fraud by the company or any fraud on the Company by its officers or employees
has been noticed or reported during the year; If yes, the nature and the amount involved is to be
indicated;
11) Approval of Managerial Remuneration [Clause 3(xi)]:
Whether managerial remuneration has been paid or provided in accordance with the requisite
approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act
2013? If not, state the amount involved and steps taken by the company for securing refund of
the same;
12) Nidhi Company [Clause 3(xii)]:
Whether the Nidhi Company has complied with the Net Owned Funds to Deposits in the ratio of
1: 20 to meet out the liability and whether the Nidhi Company is maintaining 10%
unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability;
13) Related Party Transactions [Clause 3(xiii)]:
Whether all transactions with the related parties are in compliance with sections 177 and 188 of
Companies Act, 2013 where applicable and the details have been disclosed in the Financial
Statements etc., as required by the applicable accounting standards;
14) Private Placement or Preferential Issues [Clause 3(xiv)]:
Whether the company has made any preferential allotment or private placement of shares or fully
or partly convertible debentures during the year under review and if so, as to whether the
requirement of section 42 of the Companies Act, 2013 have been complied with and the amount
17 | P a g e

raised have been used for the purposes for which the funds were raised. If not, provide the details
in respect of the amount involved andnature of noncompliance;
15) Noncash
Transactions [Clause 3(xv)]:
Whether the company has entered into any noncash transactions with directors or persons
connected with him and if so, whether the provisions of section 192 of Companies Act, 2013
have been complied with;
16) Register under RBI Act 1934 [Cause 3(xvi)]:
Whether the company is required to be registered under section 45IA of the Reserve Bank of
India Act, 1934 and if so, whether the registration has been obtained.
Reasons to be stated for Unfavorable or Qualified Answers
1) Unfavourable or Qualified Answer:
Where, in the auditors report, the answer to any of the questions referred to in paragraph 3 is
unfavourable or qualified, the auditors report shall also state the reasons for such unfavourable
or qualified answer, as the case may be.
2) Unable to Express Opinion:
Where the auditor is unable to express any opinion in answer to a particular question, his report
shall indicate such fact together with the reasons why it is not possible for him to give an answer
to such question. Hence, as per paragraph 4 of CARO 2016, the auditor must give the reasons
for unfavourable or qualified answers to the above 16 clauses referred in paragraph 3 of CARO
2016. However, if the auditor is not able toexpress his opinion the fact and reason for the same
should be indicated in the report.

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BIBLIOGRAPHY

WWW.GOOGLE.IN
WWW.WIKIPEDIA.ORG

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