Companies (Auditor's Report) Order

Companies (Auditor's Report) Order (CARO) is a legal regulation in India that requires auditors to examine and report on certain important aspects of a company's financial health and operations. It ensures auditors review areas like inventory, borrowing, transactions with related parties, and compliance with laws. The purpose is to enhance transparency and provide stakeholders—including investors, lenders, and regulators—with detailed insights into potential risks or irregularities in the company’s financial statements. Essentially, CARO helps maintain accountability and trustworthiness in corporate financial reporting by standardizing specific audit procedures and disclosures.