Which of the following types of companies is NOT covered by CARO 2016?

A small company as per the definition in the Companies Act, 2013.

A banking company regulated by the Reserve Bank of India.

An insurance company regulated by the Insurance Regulatory and Development Authority.

A public company with a turnover exceeding ?10 crore.

What is the primary purpose of the ICAI's Guidance Note on CARO 2016?

To provide additional financial reporting standards for companies.

To give guidance to auditors on technical aspects of CARO 2016.

To replace the Companies Act, 2013 for audits.

To mandate the use of CARO 2016 for all audits.

What is the purpose of the Companies (Auditor’s Report) Order (CARO) 2016?

To regulate the audit profession in India.

To provide guidance to auditors on report formatting.

To specify matters that need to be included in the auditor's report.

To require auditors to report on cybersecurity measures.

Which of the following is NOT a characteristic of an audit report?

It expresses the auditor's opinion on the state of affairs.

It is a statement summarizing the audit findings.

It is a financial statement of the company.

It is the end product of an audit.

Under CARO 2016, what is the threshold for a company to be considered a "small company"?

Paid-up share capital not exceeding ?50 lakhs and turnover not exceeding ?2 crores.

Paid-up share capital not exceeding ?5 crores and turnover not exceeding ?20 crores.

Paid-up share capital not exceeding ?1 crore and turnover not exceeding ?10 crores.

Paid-up share capital not exceeding ?1 crore and turnover not exceeding ?2 crores.

What is the main purpose of an audit report?

To provide a detailed breakdown of a company's financial transactions.

To express the auditor's opinion on the state of the company's affairs.

To highlight discrepancies in the company's financial statements.

To serve as a financial statement for the company.

What is the primary purpose of the Companies (Auditor’s Report) Order (CARO)?

To provide guidelines for preparing financial statements.

To regulate the functioning of auditors.

To outline the responsibilities of a company's management.

To ensure the reporting of certain matters by auditors in their audit reports.

What is the key difference between a clean report and a qualified report?

A clean report indicates compliance with tax regulations, while a qualified report does not.

A clean report includes a disclaimer of opinion, while a qualified report does not.

A clean report expresses satisfaction with the financial statements, while a qualified report indicates reservations or exceptions.

A clean report is given by an internal auditor, while a qualified report is given by an external auditor.

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