CARO 2016 – Companies Auditor’s Report Order, 2016. Recent changes in companies (auditor’s report) order CARO 2016. The Ministry of Corporate Affairs has notified the Companies (Auditor’s Report) Order, 2016 (CARO 2016) vide its Notification no. S.O. 1228(E) dated 29th March, 2016. This Order supersedes the Companies (Auditor’s Report) Order, 2015 dated 10th April, 2015 and shall be applicable for the financial year commencing on or after 1st April, 2015. In this article you can find compression between CARO 2015 and CARO 2016. Applicability of CARO 2016 on Various types of Companies.

Overview of CARO 2016

CARO 2016 has been issued under the Section 143(11) of the Companies Act, 2013. It supersedes the existing CARO 2015 issued in April 2015. It is applicable for financial years commencing on or after April 1, 2015, i.e., it is applicable for the audits of financial year 2015-16 and onwards. It has total 16 clauses compared to 12 clauses in CARO 2015. It applies to all companies including foreign companies except certain categories of companies, e.g., banking companies, insurance companies, Section 8 companies, one person companies and small companies, private limited companies  which satisfy the conditions specified in the Order. CARO 2016 specifically provides that it does not apply to the auditor’s report on consolidated financial statements. Another significant change made by CARO 2016 is that it requires reporting on only those matters which are applicable to the company. CARO 2016 has made certain changes regarding its applicability to private limited companies. First of all, a condition for exemption has been added that the private limited company should not be a subsidiary or holding company of a public company. Secondly, the threshold limits regarding the Paid up Capital and Reserves, Total Borrowings and Total Revenue have been raised as shown in the table given below:

CriteriaLimit in CARO 2015 (In Rs)Limit in CARO 2016 (In Rs)
Paid up Capital and Reserves and Surplus50 lakh1 Crore
Total Borrowings25 lakh1 Crore
Total Revenue5 Crore10 Crore

CARO 2016 – Companies Auditor’s Report Order, 2016 

MCA issues CARO, 2016, effective from FY 2015-16, excludes applicability to banking Company /insurance company /OPC/small Company.

MCA issues Companies (Auditor’s Report) Order, 2016 (CARO, 2016); States that CARO, 2016 is applicable to every company including foreign Company, except banking company, insurance company, Sec. 8 Company, OPC, Small Company. and prescribed class of private company (thresholds prescribed);

States that every Auditors’ Report shall contain the prescribed matters under CARO, 2016 for financial years commencing on or after April 1, 2015;

CARO- 2016 has introduced a number of new reporting requirements by Statutory Auditors and has cast much more responsibility on them as compared to the CARO 2015.


In this Article, an attempt has been made to compare the provisions of CARO 2015 and CARO 2016 with the aim of highlighting the changes put forth by CARO, 2016 and the revised requirements to be complied going forward. This is not an analysis of the CARO 2016 but a comparison with its previous order to throw light on the changes introduced in order to facilitate an understanding of the new requirements and to prepare ahead.

While making the comparison, CARO 2015 has been taken as the basis to draw out a comparison of the common stipulations between both the Orders and the additional requirements of CARO, 2016 have been stated separately for ease of understanding.

Must Read – CARO-2016 Highlights Summary

You can find Difference between CARO 2016 and CARO 2015 from below files….

For More details Please download below CARO Related Files

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