CARO 2020: Wary of increased scrutiny, auditors and firms attempt push-back

Auditors and business are wary of the new audit guidelines

In March this year the government, as part of a relief package to business from the pandemic-induced countrywide lockdown, decided to postpone the applicability of new audit disclosures by one year. Companies Auditor’s Report Order (CARO 2020) guidelines — now applicable from this financial year — were brought in to curb corporate scams by introducing more transparency and accountability in the audited financial numbers.

The stringent guidelines require companies to disclose more information in their audit report. It has expanded considerably the ambit of the statutory auditor’s role — requiring them to seek and verify the additional disclosures by the company,