Applicability of caro(2003)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2012 A company having paid up share capital Rs.52 lakhs,loan Rs.24 lakhs, and turnover is Rs.5 crores. In this situation CARO(2003) is applicable?

CA Ghanshyam Joshi

CA Ghanshyam Joshi (Expert)
Follow

14 September 2012 in your query you have not mentioned that this is public company or private company.

Applicability of the Order -

Companies Covered by the Order -

The Order applies to all companies except certain categories of companies specifically exempted from the application of the Order. The Order also applies to foreign companies as defined in section 591 of the Act. The Order is also applicable to the audits of branch(es) of a company under the Act since sub-section 3(a) of section 228 of the Act clearly specifies that a branch auditor has the same duties in respect of audit as the company’s auditor. It is, therefore, necessary that the report submitted by the branch auditor contains a statement on all the matters specified in the Order to enable the company’s auditor to consider the same while complying with the provisions of the Order.

Private Limited companies exempted if -
The Order also exempts from its application a private limited company which fulfils all the following conditions:
(i) its paid-up capital and reserves are rupees fifty lakhs or less;
(ii) it has no outstanding loan exceeding rupees twenty five lakhs from any bank or financial institution; and
(iii) its turnover does not exceed rupees five crores at any point of time during the financial year.

A private limited company, in order to be exempt from the applicability of the Order, must satisfy all the conditions mentioned above cumulatively. In other words, even if one of the conditions is not satisfied, a private limited company’s auditor has to report on the matters specified in the Order.

Message likes : 2 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now