The Ministry of Corporate Affairs (MCA) has issued an order named Companies ( Auditor’s Report ) Order, 2020.
The Companies (Auditor’s Report) Order 2020 will be applicable to all the companies including foreign companies and it will be enforced when it will be published in the Official Gazette of India.
This order stated that every report of the auditor under Section 143 of Companies Act, 2013 must contain the matters as specified under paragraphs 3 and 4. If in case the auditor’s report pertains to the consolidated financial statements, this order will not be applied.
The order 2020 elaborated on all the matters which are to be included in the auditor’s report. Wherein, the following details of the subject-matter are described:
- That the report must include that the company is maintaining proper records showing full particulars such as:
- The quantitative detail of the situation of property, plant, and equipment,
- Physical verification of the property, plant, and equipment,
- Disclose the details of the title deeds of the immovable property,
- Revaluation of the property, plant, and equipment and if there is more than 10% of the change in the property, plant, and equipment,
- Details of proceedings against the company on the holding of Benami property.
- Physical verifications of inventory or some discrepancies of 10% or more.
- Details of the investments made by the company, security or guarantee given by the company,
- Details of the payment pertaining to the statutory dues such as GST, provident Funds, Custom Duty, etc.
- Details of any default done by the company in making the repayment of the loan,
- Details of the funds raised by a company by the way of the public offer,
- Details of fraud done by the company, and many more.
The Auditor’s Report Order 2020 of any company is supposed to state the reasons for unfavourable or qualified answers.
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