Under Section 143(11) Companies Act 2013 and the related CARO 2020 (Companies (Auditor's Report) Order), the auditor's report must INCLUDE a statement on:
Answer & Solution
Correct answer: B.
1. Section 143(11) Companies Act 2013 empowers Central Government, in consultation with NFRA, to direct that the auditor's report shall ALSO INCLUDE a statement on such matters as may be specified.
2. The current order is the COMPANIES (AUDITOR'S REPORT) ORDER, 2020 (CARO 2020) — effective for audits of FY 2020-21 and onwards.
3. CARO 2020 prescribes 21 paragraphs covering: property records; inventory; loans/advances given by the company; investments; loans to related parties (Section 185/186); deposits; cost records; statutory dues; default in payment of loans/borrowings; preferential allotment; fraud; managerial remuneration; internal audit system; cash losses; resignations of statutory auditors; financial ratios; CSR compliance; whistle-blower complaints; etc.
4. CARO 2020 applies to all companies EXCEPT banking, insurance, Section 8 companies, OPCs, and small companies.
5. Hence option B is correct.
_Source: Companies Act 2013 (Act 18 of 2013), Govt. of India MCA — Companies Act 2013, Section 143(11); Companies (Auditor's Report) Order, 2020 (CARO 2020)_
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