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

Under clause (xxi) of paragraph 3 of the Companies (Auditor's Report) Order, 2020, what must the auditor of a company's consolidated financial statements state?

Clause (xxi) requires the auditor to state whether the CARO reports of the companies included in the consolidated financial statements carry any qualifications or adverse remarks by their respective auditors, and if so, to give the company details and the CARO paragraph numbers.

  1. AWhether there have been any qualifications or adverse remarks by the respective auditors in the CARO reports of the companies included in the consolidation, with company details and paragraph numbers if yesCorrect
  2. BThe consolidated net profit of all group companies for the year
  3. CWhether the parent company has paid dividend out of consolidated reserves
  4. DThe list of all directors of the subsidiaries included in consolidation

Explanation

Clause (xxi) requires reporting whether the respective auditors' CARO reports of companies included in the consolidated financial statements contain qualifications or adverse remarks. If yes, the auditor indicates the details of the companies and the paragraph numbers of the CARO report containing them. The other options are not what this clause asks for.

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