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Under CARO 2016, what should the auditor report regarding related party transactions?
- a)Whether related party transactions were disclosed in the financial statements.
- b)Whether related party transactions were conducted at arm's length.
- c)Whether related party transactions comply with the requirements of the Companies Act, 2013.
- d)Whether related party transactions were approved by shareholders.
Correct answer is option 'C'. Can you explain this answer?
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Under CARO 2016, what should the auditor report regarding related part...
Related Party Transactions under CARO 2016
Compliance with Companies Act, 2013
- Under CARO 2016, the auditor is required to report on whether related party transactions comply with the requirements of the Companies Act, 2013.
- This includes ensuring that related party transactions are conducted in accordance with the provisions of the Companies Act, 2013, and any other relevant laws and regulations.
Importance of Compliance
- Compliance with the Companies Act, 2013 is crucial as it ensures transparency, fairness, and accountability in related party transactions.
- Non-compliance with the Act can lead to legal and regulatory repercussions, as well as damage to the reputation of the company.
Auditor's Responsibility
- The auditor must carefully review related party transactions to determine if they meet the legal requirements set forth by the Companies Act, 2013.
- Any instances of non-compliance must be clearly reported in the audit report to alert stakeholders and regulatory authorities.
Conclusion
- Ensuring compliance with the Companies Act, 2013 regarding related party transactions is a key responsibility of auditors under CARO 2016.
- By reporting on the compliance status of related party transactions, auditors help enhance the credibility and reliability of the financial statements for stakeholders.
Compliance with Companies Act, 2013
- Under CARO 2016, the auditor is required to report on whether related party transactions comply with the requirements of the Companies Act, 2013.
- This includes ensuring that related party transactions are conducted in accordance with the provisions of the Companies Act, 2013, and any other relevant laws and regulations.
Importance of Compliance
- Compliance with the Companies Act, 2013 is crucial as it ensures transparency, fairness, and accountability in related party transactions.
- Non-compliance with the Act can lead to legal and regulatory repercussions, as well as damage to the reputation of the company.
Auditor's Responsibility
- The auditor must carefully review related party transactions to determine if they meet the legal requirements set forth by the Companies Act, 2013.
- Any instances of non-compliance must be clearly reported in the audit report to alert stakeholders and regulatory authorities.
Conclusion
- Ensuring compliance with the Companies Act, 2013 regarding related party transactions is a key responsibility of auditors under CARO 2016.
- By reporting on the compliance status of related party transactions, auditors help enhance the credibility and reliability of the financial statements for stakeholders.
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Under CARO 2016, what should the auditor report regarding related part...
The auditor should report whether related party transactions comply with the requirements of the Companies Act, 2013.
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Under CARO 2016, what should the auditor report regarding related party transactions?a)Whether related party transactions were disclosed in the financial statements.b)Whether related party transactions were conducted at arm's length.c)Whether related party transactions comply with the requirements of the Companies Act, 2013.d)Whether related party transactions were approved by shareholders.Correct answer is option 'C'. Can you explain this answer?
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