Greater transparency

New audit rules more onerous, but useful

The Union Ministry of Corporate Affairs announced last week the notification of the Companies (Auditor’s Report) Order, 2020 (CARO 2020). The order has introduced several changes to the rules governing audit reports of companies, with a view to increasing transparency. This follows a consultation paper that the ministry had put out last month, with several proposals for enhancing the role of auditors and bringing their incentives into more clear alignment. For example, the consultation paper proposed that non-audit services not be provided to audit clients, to prevent revenue from such services impinging upon the decisions taken by the auditor when