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Under Clause (ix)(a) of CARO 2020, if a company has defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender, the auditor is required to report:

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option B — Period and amount of default in the tabular format specified by CARO, lender-wise

All Options:

  • AOnly defaults continuing on the balance sheet date exceeding ₹1 crore
  • BPeriod and amount of default in the tabular format specified by CARO, lender-wise ✓
  • COnly defaults where legal recovery notices have been served under SARFAESI Act
  • DDefaults to scheduled commercial banks only, excluding NBFCs and debenture holders

Detailed Solution & Explanation

Reporting under CARO 2020 Paragraph 3 Clause (ix)(a):
1. **Scope**: Defaults in repayment of loans/borrowings or payment of interest to **any lender** (Banks, FIs, Government, Debenture holders, etc.).
2. **Prescribed Table Format**: Nature of borrowing, name of lender, amount not paid on due date, whether principal or interest, number of days delay or unpaid, and remarks.
3. Clause (ix)(b) also requires reporting if the company is a declared willful defaulter.
Hence, **Option B** is the correct answer.

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