Caro or Maocaro

Earlier it was called MAOCARO but now it is called CARO

The Central Government by order number GSR 480(E) superseded the Manufacturing and Other Companies (Auditor's Report) Order,1988 [MAOCARO] by Companies (Auditor's Report) Order, 2003.[CARO] The purpose of this shift from MAOCARO to CARO is not known and is sudden. An attempt has been made by the paper writer to review the CARO

By the reading of the order it is clear that CARO has superseded MAOCARO from the date of publication in the Official Gazette i.e., 12^th June, 2003. However CARO is applicable for every financial year ending on any day on or after 1^st July, 2003 i.e., the date of commencement of CARO. This in turn means for those accounts for which Audit Report is given on or after 12^th June, 2003 neither MAOCARO is applicable nor CARO is applicable. This, I am sure will be sorted out by a clarification by either the Central Government or by Institute of Chartered Accountants of India.

There is not any significant shift from MAOCARO to CARO. Once CARO becomes applicable, the Auditor's responsibility increases. The shift seems to be to ensure more clarity to the reader of financial statement. Now it appears that an auditor of a manufacturing company will have to report on 28 points instead of earlier 20 points.