New CARO pays 'a lot of attention to fraud', says SR Batliboi’s Sudhir Soni

The Ministry of Corporate Affairs (MCA) has notified the companies order, 2020. The government has put in place a stringent framework where auditors will have to provide detailed disclosures about loan defaults, amount of cash losses and immovable properties. Amit Tandon, managing director of IiAS and Sudhir Soni, national director and partner-assurance services at SR Batliboi & Co spoke to CNBC-TV18 about the order.

Soni said: “The Companies Auditor's Report Order (CARO) has always been in existence. What this order has done is significantly enhanced the scope of reporting. It is in response to many of the corporate events that have taken place recently and if I pick up the topics, it is the diversion of funds non-performing assets and corporate frauds, so it is trying to address some of these topics with more disclosure around that. So the number of report requirements goes up from about 28 to 50 topics.

“If I were to flesh it out as to what are the major topics that they are trying to address, the largest attention is on financing and investing activities of a company from both perspectives both as a borrower and as a lender. Some of the other topics they are paying attention to is fraud. There is a lot of attention to fraud and enhancing the kind of responsibilities that auditors have to look into topics around that and also compliance.