First Notes


First Notes is our ‘hot, off the press’ update that aims to provide a very timely heads up on key accounting and regulatory developments that affect reporting for entities in India. It is one more way for us to connect with you, in addition to the monthly Accounting and Auditing Update.

Updated version of the Companies (Auditor's Report) Order unveiled by the MCA 
16 April 2015


Section 227(4A) of the Companies Act, 1956 (1956 Act) required that the auditor’s report of certain class of companies should include a statement on certain prescribed matters. These reporting requirements were prescribed under the Companies (Auditor's Report) Order, 2003 (CARO – 2003) by the Ministry of Corporate Affairs (MCA). Section 227(4A) of the 1956 Act ceased to be operational from 1 April 2014 after notification of section 143(11) under the Companies Act, 2013 (2013 Act).


Though section 143(11) of the 2013 Act provides requirements similar to section 227(4A) of the 1956 Act, the MCA had not prescribed CARO related requirements. Consequently, after consulting the Institute of Chartered Accountants of India, the MCA on 10 April 2015 issued the Companies (Auditor's Report) Order, 2015 (CARO – 2015) prescribing certain reporting requirements for auditors of certain class of companies. CARO – 2015 will be effective from the date of its publication in the Official Gazette.


This issue of First Notes provides an overview of the CARO 2015 and is divided into following sections:


  • Applicability of the CARO – 2015
  • Companies covered under the CARO – 2015
  • Reporting requirements carried forward in entirety/certain modification from the CARO – 2003
  • New reporting requirements prescribed in the CARO – 2015
  • Reporting requirements of the CARO – 2003 not carried forward.


For the text of CARO – 2015 issued by the MCA, please click here.


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