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CMA Intermediate · Corporate Accounting and Auditing · Audit Report and Reporting under CARO

Under clause 3(vii)(a) of CARO 2020, the auditor reports on arrears of undisputed statutory dues. Arrears must be indicated where the dues remained outstanding on the last day of the financial year for a period of more than:

The correct period is more than six months from the date the dues became payable. CARO 2020 clause 3(vii)(a) requires arrears of undisputed statutory dues outstanding on the last day of the year beyond that period to be reported, measured from the due date.

  1. AThree months from the date they became payable
  2. BSix months from the date they became payableCorrect
  3. CTwelve months from the date they became payable
  4. DSix months from the date of the balance sheet

Explanation

Clause 3(vii)(a) asks the auditor to indicate the extent of arrears of undisputed statutory dues outstanding as on the last day of the financial year for more than six months from the date they became payable. The period runs from the due date, not from the balance sheet date, so the last option is wrong.

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