RST Ltd. (a manufacturing company engaged in the business of various types of yarns) appointed KSB & Co. Chartered Accountants, as internal auditors of the company for the F.Y. 2024-2025. Statutory auditors wanted to

As per CARO 2020 Rule 3(xiv), the statutory auditor's report on the accounts of a company to which this Order applies shall include a statement on the following matters, namely: Whether the company has an internal audit system commensurate with the size and nature of its business. Whether the reports of the Internal Auditors for the period under audit were considered by the statutory auditor. The aspects that a statutory auditor needs to consider while reporting whether the reports of the Internal Auditors for the period under audit were duly considered by him / her are given below: Internal audit is completed as per the plan and the reports are made available sufficiently in time. In case required, a meeting with internal auditor to discuss the observations to independently evaluate the impact of the observations on the financial statements has been done. All internal audit observations having a financial impact are considered by the management and control deficiencies pointed out by the internal auditors are rectified. Impact of the control deficiencies, if any, pointed by the internal auditors on internal financial controls over financial reporting (IFCOFR) have been assessed by auditor. Since Statutory auditor is vested with the right to receive the full-fledged internal audit reports (including draft audit reports) together with annexures and not merely the executive summary / power point presentations, whether the same were made available when requested.