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