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Question

Clause 4(vii) of 'Companies Auditors Report Order (CARO), 2003' requires the auditor to comment whether the company has ___________.


A
an internal audit system
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B
an audit programme
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C
a check list
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D
all of the above
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Solution

The correct option is A an internal audit system
Clause 4(vii) of Companies Auditor's Report Order (CARO) 2003 requires that auditor has to comment on the internal audit system of the companies as specified. Auditor has to comment that whether the company has an internal audit system commensurate with its size and nature of its business .
In case of listed companies and/or other companies,
a. having a paid-up capital and reserves exceeding INR 50 lacs as at the commencement of the financial year concerned, or
b. having an average annual turnover exceeding INR 5 crores for a period of three consecutive years immediately preceding the financial year concerned.

Accountancy

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