CARO 2016:
- Fixed Assets: CARO 2016 required auditors to report whether the company maintained proper records for fixed assets and if discrepancies were noticed during the audit.
- Inventory: It mandated reporting on physical verification of inventory and discrepancies, including excess or shortage.
- Loans and Advances: Auditors had to report on loans granted to related parties and whether they were prejudicial to the company’s interests.
- Deposits: Reporting on compliance with the directives of the Reserve Bank of India related to deposits.
- Cost Records: Auditors were to report on the maintenance of cost records and their compliance with the orders of the Central Government.
- Default in Repayment: Reporting on whether the company had defaulted in repayment of loans to banks or financial institutions.
- Guarantee for Loans: Disclosure of whether the company had given guarantees for loans taken by others.
- Utilization of IPO Funds: Reporting on whether funds raised through IPOs were utilized for the purposes for which they were raised.
- Fraud: Reporting on instances of fraud by the company or its officers.
- Managerial Remuneration: Whether managerial remuneration was paid in accordance with the applicable laws.
- Nidhi Company: Applicability to Nidhi companies, and reporting of whether the company complied with Nidhi Rules.
- Related Party Transactions: Disclosing the nature and amount of transactions with related parties.
CARO 2020:
- Fixed Assets: CARO 2020 continues to require reporting on the maintenance of proper records for fixed assets and discrepancies.
- Inventory: It retains the reporting requirement for physical verification of inventory and discrepancies.
- Loans and Advances: Extends reporting to whether the company’s internal procedures for giving loans and advances were prejudicial to the interests of the company.
- Deposits: Auditors must report compliance with various deposit-related laws, including the acceptance of deposits.
- Cost Records: Reporting on the maintenance of cost records remains a requirement.
- Default in Repayment: Expands reporting to defaults on loans or borrowings from any bank or financial institution.
- Guarantee for Loans: Reporting on whether the company provided any guarantees for loans taken by others remains a part of CARO 2020.
- Utilization of IPO Funds: It expands the requirement to report on the utilization of funds raised through public or rights issues.
- Fraud: CARO 2020 places a greater emphasis on reporting on any instances of fraud.
- Internal Audit: Introduces reporting on whether the company has an internal audit system commensurate with its size and nature of business.
- Related Party Transactions: Enhances the reporting requirement by including disclosures on nature, number of transactions, and amounts.
- Cash Loss: Reporting on whether the company has incurred cash losses during the financial year and the immediately preceding financial year.
This detailed breakdown illustrates the evolution of reporting requirements from CARO 2016 to CARO 2020, with the latter being more comprehensive and focusing on ensuring transparency, corporate governance, and accountability in a wider range of companies, including smaller ones. It aligns with the changing regulatory landscape in India and the need for stricter compliance and reporting standards.