Clarification on CARO 2015 Question in IPCC Audit Exam

In Today’s CA IPCC Auditing Exam, the question ‘Discuss which class of companies are specifically exempt from the applicability of CARO 2015’ was asked for 6 Marks.

Few students have written the answer in CARO 2015 and few others felt it is a printing error and written an answer for CARO 2016.

This is not the first time such question (error) has come in the exam. So It is hereby clarified that, either you have written answer for CARO 2015 or CARO 2016, your answer will be treated as valid and will be awarded marks accordingly.

Students shall avoid assuming that, just because you have attempted the question, you will be awarded thse 6 Marks straight away.

Also Read

IPCC Result Date Nov 2016

Answer for CARO 2015 Non-Applicability

CARO or Companies Auditor’s Report Rule 2015 shall apply to every company including a foreign company as defined in clause (42) of section 2 of the Companies Act, 2O13 (18 of 2O13), except

-a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (1O of 1949);

-an insurance company as defined under the Insurance Act,1938 (4 of 1938);

-a company licensed to operate under section 8 of the Companies Act;

-a One Person Company as defined under clause (62) of section 2 of the Companies Act and a small company as defined under clause (85) of section 2 of the Companies Act; and

-a private limited company

  1. with a paid up capital and reserves not more than Rs 50 lakh and
  2. which does not have loan outstanding exceeding Rs 25 lakh from any bank or financial institution and
  3. does not have a turnover exceeding Rs 5 crore at any point of time during the financial year.


  1. This is wrong. Just because of ICAI’s Mistake Students got confused. Had it been Caro 2016, we would have easily scored 6 marks.

  2. I was confused so i just wrote As per the provisions of CARO, etc etc.. without specifying the Year. So i won’t get any marks for that answer?

    • But the provisions you had given will change accordingly right! So you should have mentioned any one yr and given the answer! Or atleast a note would do.

  3. Please correct yourself…as per latest practice manual the monetary limit for private limited companies hav been increased

    • The answer which is given above is as per CARO 2015
      And the answer which is mentiond in the latest practise manual is as per CARO 2016

  4. I hav made a mistake in 144section of auditor is not required to giv certain service all the point are right except 1.. I wrote tax advisory.. Will that ans be threaten right or will they giv proportionate marks or zero please guide

  5. I have written the last point as “A private limited company, not being a subsidiary or holding company of a public company” and then the three conditions. Is it ok??

  6. I knew applicability of caro 16 but since question asked for caro 15 i felt whole question 6..
    This is not right because of ICAI’s misprint i and many have to suffer..
    We could have easily scored 6 marks in that part..

    • Substance over form is the thing which we all have learnt. Writing ‘true’ instead of ‘correct’ won’t matter as long as your answers are correct.Do not worry. 🙂

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