CARO 2016

Dear Rupa,

As per Section 143(11) of the COA, 2013, the auditor is required to report on matters contained in CARO 2016.

As per the order, CARO 2016 is applicable to all companies except to the following class of companies: 

(i) a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);

(ii) an insurance company as defined under the Insurance Act,1938 (4 of 1938);

(iii) a company licensed to operate under section 8 of the Companies Act;

(iv) a One Person Company as defined under clause (62) of section 2 of the Companies Act and a small company as defined under clause (85) of section 2 of the Companies Act; and

(v) a private limited company, not being a subsidiary or holding company of a public company, having a paid up capital and reserves and surplus not more than rupees one crore as on the balance sheet date and which 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 which does not have a total revenue as disclosed in Scheduled III to the Companies Act, 2013 (including revenue from discontinuing operations) exceeding rupees ten crore during the financial year as per the financial statements.

So if your client falls in one of the above categories, CARO 2016 shall not apply. Otherwise, in every other situation, it shall apply. 

Feel free to engage in further discussion if you've any other doubt.