Govt widens scope of audit report to check corporate frauds and scams

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In a bid to check corporate frauds and scams, the ministry of corporate affairs (MCA) has revised the Companies (Auditor’s Report) Order, or CARO, under which auditors are now required to report more extensively on many crucial aspects including frauds, loan defaults, whistleblower complaints and Benami properties.

Under the amended Companies (Auditor’s Report) Order, auditors will have to comment on a total of 50 matters in their audit reports against the earlier 21. The amendments apply to every audit report of companies under section 143 of the Companies Act, for the financial year 2019-20 and beyond.

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