Govt's new audit rules to shield companies against financial frauds

Companies (Auditor's Report ) Order to enhance disclosures on part of auditors

In a bid to bring greater financial discipline in audits, the government has asked auditors to provide details like loans given by a company for reporting whistleblower complaints and assessing internal audit mechanisms of firms.

In a press statement issued on Wednesday, the corporate affairs ministry said it had notified the Companies (Auditor’s Report) Order, 2020, (CARO) on Tuesday to enhance due diligence and disclosures by auditors and bring greater transparency into the financial affairs of companies.

The rules will apply to audit reports for the financial years commencing on or after April 1, 2019. 

The revisions have also put greater onus on