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Sr. No.
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Particulars
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MAOCARO
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CARO
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1.
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Full name
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Manufacturing
and Other Companies (Auditor's Report) Order 1988
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Companies
(Auditor's Report) Order 2003
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2.
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With effect from
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Accounting periods
ending on any day on or after 1st November 1988
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Accounting
periods ending on any day on or after 1st July 2003
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3.
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Applicability
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The order does not
apply to Banking, Insurance Company and Company formed u/s. 25 of
Companies Act
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The order does not
apply to Banking, Insurance Company, Company formed u/s. 25 of
Companies Act and private limited company if:
paid up capital
and reserves not more that Rs. 50 Lacs and has not accepted
any public deposits and does not have outstanding loan of Rs.
10 Lacs or more from any bank or financial institution and does
not have turnover exceeding Rs. 5 Crs.
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4.
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Clause relating
to Fixed Assets
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Maintenance of
proper records of fixed assets, physical verification of fixed
assets and accounting of material discrepancies on physical
verification
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Same as MAOCARO
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Whether any fixed
assets have been revalued during the year and if so the basis of
revaluation should be indicated
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No such reporting is required |
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No such reporting
is required
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If substantial
part of fixed assets have been disposed off during the year whether
it has affected the going concern
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5.
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Clause relating to
Inventories
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Whether physical
verification carried out at reasonable intervals in respect of
finished goods, store, spare parts and raw materials
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Same as MAOCARO.
However, instead of mentioning finished goods, stores, spare parts
and raw materials CARO mentions the word "inventory". Thus, now WIP
can also be included in the list which earlier was not there.
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Whether procedures
relating to physical verification of stocks reasonable and adequate
in relation to the size of and nature of the business of the
company. If not inadequacies to be reported
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Same as MAOCARO
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Whether material
discrepancies relating to physical verification properly accounted
for
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Same as MAOCARO.
However, one aspect added here is whether the company is
maintaining proper records of inventory
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Whether stock
valuation has been done in accordance with accepted accounting
principles
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Deleted |
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6.
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Clause relating to
Loans granted and taken from parties listed in register maintained
u/s. 301and Companies under the same management as defined u/s. 370
(1B)
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No such reporting
required
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The number of
parties and amount involved in the transactions has to be reported
only for parties listed in register maintained u/s. 301. No
reporting for companies under same management
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Whether rate of
interest and other terms and conditions are prima facei prejudicial
to the interests of the company
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Same as MAOCARO.
However, no reporting required for loans granted to /taken from
companies under the same management
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7.
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Clause relating to
other loans or advances in the nature of loans granted or taken by
the company
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Whether the
parties to whom loans or advances in the nature of loans are given
is regular in repayment
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Same as MAOCATO.
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No such reporting
required
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Whether the rate
of interest and other terms and conditions of loans (secured or
unsecured) are prima facei prejudicial to the interest of the
company
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If the parties are
not regular in repayment, whether reasonable steps have been taken
by the company for recovery/payment of the principal and interest.
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Same as MAOCARO.
However, reporting required only if overdue amount is more one
lakhs
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8.
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Clause relating
to Internal Control procedures
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Is there adequate
internal control procedures commensurate with the size of and the
nature of the business of the company relating to inventory and
fixed assets and for the sale of goods.
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Same as MAOCARO.
However, one very important additional thing to be reported is
whether there is a continuing failure to correct major weaknesses in
internal control
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9.
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Clause relating to
transactions entered with parties mentioned in register mentioned
u/s. 301
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No such reporting
required
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Whether
transactions that need to be entered into a register in pursuance of
section 301 have been so entered
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Whether
transactions are effected at market prices. Reporting required only
for transactions exceeding Rs. 50,000/-
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Same as MAOCARO.
However, the limit of Rs. 50,000/- has been increased to Rs.
5,00,000/-
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10.
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Clause relating
to unserviceable or damaged stores, raw materials or finished goods.
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Whether any
unserviceable or damaged stores, raw materials or finished goods are
determined and whether provisions for the loss, if any, have been
made in the accounts
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Deleted |
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11.
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Clause relating to
acceptance of public deposits
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If the company has
accepted Public Deposits, whether directives issued from RBI,
provisions of section 58A of the Companies Act 1956 and the rules
framed thereunder have been complied with. If not, the nature of
contravention's have to be reported
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Same as MAOCARO.
However, if an order has been passed by CLB in respect of
contravention's made by the company, whether the same has been
complied with or not has to be reported.
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12.
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Clause relating
to maintenance of records for sale and disposal of by-products/scrap
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Whether the
company is maintaining reasonable records for sale and disposal of
realizable by-products/scrap
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Deleted |
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13.
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Clause relating to
Internal Audit System
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Whether the
company has adequate internal audit system. Applicable only for
companies with paid-up capital exceeding Rs. 25 lakhs or having an
average annual turnover exceeding Rs. 2 Crs. for a period of 3
consecutive financial years immediately preceding the financial year
concerned.
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Same as MAOCARO.
However, applicable only for companies with paid-up capital and
reserves exceeding Rs. 50 lakhs as at the commencement of the
financial year concerned or having an average annual turnover
exceeding Rs. 5 Crs. for a period of 3 consecutive financial
years immediately preceding the financial year concerned
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14.
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Clause relating to
Cost Accounting Records
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Where maintenance of
cost records has been prescribed by the Central Government under
clause (d) of sub-section (1) of section 209 of the Act, whether
such accounts and records have been made and maintained;
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Same as MAOCARO
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15.
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Clause relating
to deposit of Statutory Dues
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Whether the company
is regular in depositing PF and ESI dues and if not, the extent of
arrears of PF and ESI should be indicated. Also undisputed
outstanding statutory dues for a period of more than 6 months has to
be reported
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Whether the company
is regular in depositing undisputed statutory dues including PF,
Investor Education and Protection Fund, ESI, Income Tax, Sales Tax,
Wealth Tax, Customs Duty, Excise Duty, cess and any other statutory
dues and if not, the extent of arrears of outstanding statutory dues
for a period more that 6 months from the date they become payable
should be indicated.
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16.
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Clause relating
to deposit of Statutory Dues (contd.)
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No such reporting
required
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In case dues of
sales tax/income tax/custom tax/wealth tax/excise duty/cess have not
been deposited on account of any dispute, then the amounts involved
and the forum where dispute is pending may please be mentioned
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17.
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Clause relating
to personal expenses
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Whether personal
expenses have been charged to revenue account, if so, the details
thereof should be reported
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Deleted
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18.
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Clause relating to
Sick Industrial Companies
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Whether the company
is a sick industrial company as per SICA and if yes whether a
reference has been made to BIFR
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Whether in case of
a company which has been registered for a period not less than five
years, its accumulated losses at the end of the financial year are
not less than fifty per cent of its net worth and whether it has
incurred cash losses in such financial year and in the financial
year immediately preceding such financial year also;
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19.
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Clause relating to
default in repayment of dues to banks / FI/ Debenture holders
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No such reporting
required
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Whether the company has defaulted in repayment of
dues to a financial institution or bank or debenture holders? If
yes, the period and amount of default to be reported.
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20.
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Clause relating
to maintenance of records for loans or advances granted
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No such reporting
required
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Whether adequate documents and records are
maintained in cases where the company has granted loans and advances
on the basis of security by way of pledge of shares, debentures and
other securities; If not, the deficiencies to be pointed out.
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21.
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Clause relating to
guarantees given for Loans
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No such reporting
required
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Whether the company has given any guarantee for
loans taken by others from bank or financial institutions, the terms
and conditions whereof are prejudicial to the interest of the
company.
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22.
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Clause relating
to usage of loan funds
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No such reporting
required
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Whether term
loans were applied for the purpose for which the loans were
obtained.
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No such reporting
required
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Whether the
funds raised on short-term basis have been used for long term
investment and vice versa; If yes, the nature and amount is to be
indicated.
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23.
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Clause relating
to preferential allotment of shares
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No such reporting
required
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Whether the
company has made any preferential allotment of shares to parties and
companies covered in the Register under sec 301 of the Act and if so
whether the price at which shares issued is prejudicial to the int.
of the company.
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24.
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Clause relating to
creation of securities for debenture holders
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No such reporting
required
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Whether securities
have been created in respect of debentures issued?
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25.
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Clause relating
to usage of equity funds
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No such reporting
required
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Whether the
management has disclosed on the end use of money raised by public
issues and the same has been verified.
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26.
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Clause relating
to frauds
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No such reporting
required
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Whether any
fraud on or by the company has been noticed or reported during the
year; If yes, the nature and the amount involved is to be indicated.
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