December 2021

Where, in the auditor’s report, the answer to any of the questions referred to in paragraph 4 is unfavourable or qualified, the auditor’s report shall also state the reasons for such unfavourable or qualified answer, as the case may be. Where the auditor is unable to express any opinion in answer to a particular question, his report shall indicate such fact together with the reasons why it is not possible for him to give an answer to such question.

The Companies (Auditor’s Report) Order, 2003 (CARO, 2003) was issued in June 2003 and came into force on the 1st day of July 2003. The said Order, from the date it came into force, superceded the MAOCARO, 1988. Further, the Order requires that every report made by the auditor under section 227 of the Act on the accounts of every company examined by him to which the Order applies, for every financial year ending on any day on or after the commencement of this Order, shall contain matters specified in paragraphs 4 and 5 of the said Order. This implies that the auditor’s report, on accounts in respect of financial year ending on or before 30th June 2003, even if issued on or after 1st July 2003 is not required to contain report on matters specified in the CARO, 2003. However, the auditor’s report, in such cases, should include a statement on matters specified in the erstwhile MAOCARO, 1988. The Ministry of Company Affairs of the Government of India, subsequent to issuance of the Order, has issued a Circular numbered, GC No. 32/2003 as regards the date of compliance with the Order. According to the Circular, the companies to whom the Order is applicable should make serious efforts to comply with the new CARO, 2003 from the effective date. In the cases of non-compliance for accounts pertaining to financial year which closes on 31st December 2003 or earlier, Government would take a lenient view provided the accounts at least carry MAOCARO Report, if required. The circular, however, provides that accounts in respect of financial years ending on 1st January 2004 or thereafter, will have to strictly follow the CARO, 2003. The Circular is reproduced in Appendix VII. The Government’s notification notifying the Companies (Auditor’s Report) (Amendment) Order, 2004 clarifies that the Amendment Order would be effective from the date of its publication in the Official Gazette; i.e., November 25, 2004. Therefore, all audit reports issued on or after November 25, 2004 are required to comply with amendments contained herein read with the Companies (Auditor’s Report) Order, 2003 of June 12, 2003. The requirements of the Order apply in relation to full financial year irrespective of the fact that a part of such year may fall prior to the date of coming into force of the Order. Under some of the requirements of the Order, the auditor has to comment on the records maintained by the company, systems and procedures in vogue. It is possible that during the period prior to 1st July 2003, many of the companies might not have maintained such records or established such systems and procedures as are envisaged in the Order primarily because such requirements were not part of erstwhile MAOCARO, 1988 and were thus, not required to be commented upon by the auditor. It is advisable that in such situations, the auditor should also clearly mention the fact of non-maintenance of such records or non-existence of systems and procedures while making comments under the relevant clauses.

Paragraph 2 of the Order provides that it shall not apply to:  a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);  an insurance company as defined in clause (21) of section 2 of the Companies Act, 1956 (1 of 1956);  a company licensed to operate under section 25 of the Companies Act, 1956 (1 of 1956); and  a private limited company with a paid-up capital and reserves not more than rupees fifty lakh and which does not have outstanding loan exceeding rupees twenty five lakhs from any bank or financial institution and does not have a turnover exceeding rupees five crores at any point of time during the financial year. The Order specifically exempts banking companies, insurance companies and companies which have been licensed to operate under section 25 of the Act. Section 25 applies to companies which have been formed or are about to be formed as limited companies for promoting commerce, art, science, religion, charity or any other useful object and which apply or intend to apply their profits, if any, or other income in promoting their objects and prohibit the payment of any dividend to their members. Such companies are usually in the form of clubs, chambers of commerce, research institutions, etc. Further, the Order would not also apply in case of non-banking finance company, which converts into a banking company and as on the balance sheet date is a banking company. The specific exemption under the Order is given to companies licensed under section 25 of the Act. However, it would appear that in view of the provisions of section 656 of the Act, the exemption would also extend to similar companies registered under any earlier Companies Act. The Order also exempts from its application a private limited company which fulfils all the following conditions throughout the reporting period covered by the audit report:  its paid-up capital and reserves are rupees fifty lakh or less;  its outstanding loan from any bank or financial institution are rupees twenty five lakh or less; and  its turnover does not exceed rupees five crore. A private limited company, in order to be exempt from the applicability of the Order, must satisfy all the conditions mentioned above cumulatively. In other words, even if one of the conditions is not satisfied, a private limited company’s auditor has to report on the matters specified in the Order. Private Limited Company: The term “private limited company”, as used in the Order, should be construed to mean a company registered as a “private company” {as defined in clause (iii) of sub-section (1) of section 3 of the Act} and which has a limited liability. In other words, the Order would be applicable to private unlimited companies irrespective of the size of their paid-up capital and reserves, turnover, borrowings from banks/financial institutions2. Another important issue to consider in respect of reporting under the Order is the reporting responsibilities of the auditor of a branch of a private limited company in case the branch fulfills the conditions for exemption from the applicability of the Order. In this regard, it may be noted that the conditions to be satisfied for being exempt from the applicability of the Order have been laid down in respect of the company taken as a whole. Therefore, a branch of a company does not qualify to be exempted from the applicability of the Order, if the Order is applicable to the company. The branch auditor has the same reporting responsibilities in respect of the branch as those of the auditor appointed under section 224 of the Act has in respect of the company. The comments of the branch auditor in respect of the branch are dealt with by the auditor of the company appointed under section 224 of the Act while finalizing his report under the Order. Paid-up Capital and Reserves Sub-section (32) of section 2 of the Act defines the term “paid-up capital” as capital credited as paid-up. The Guidance Note on Terms Used in Financial Statements, issued by the Institute of Chartered Accountants of India, defines the term “paid-up share capital” as, “that part of the subscribed share capital for which consideration in cash or otherwise has been received. This includes bonus shares allotted by the corporate enterprise”. Paid-up share capital would include both equity share capital as well as the preference share capital. While calculating the paid-up capital, amount of calls unpaid should be deducted from and the amount originally paid-up on forfeited shares should be added to the figure of paid-up capital. Share application money received should not be considered as part of the paid-up capital. The Guidance Note on Terms Used in Financial Statements defines the term “reserve” as, “The portion of earnings, receipts or other surplus of an enterprise (whether capital or revenue)appropriated by management for a general or specific purpose other than provision for depreciation or diminution in the value of assets or for a known liability. The reserves are primarily of two types: capital reserves and revenue reserves”. Clause 7(1)(b) of Part III of Schedule VI to the Act also defines the term “reserve” by way of a negative explanation. According to the said definition, the expression “reserve” does not include any amount written off by way of providing for depreciation, renewals or diminution in the value of assets or retained by way of providing for any known liability. Thus, a reserve has to be clearly distinguished from a provision. As mentioned in the preceding paragraph, reserves are primarily of two types–capital reserves and revenue reserves. According to the Guidance Note on Terms Used in Financial Statements, the term “capital reserve” means “a reserve of a corporate enterprise which is not available for distribution as dividend”. The said Guidance Note defines the term “revenue reserve” as “any reserve other than capital reserve”. For determining the applicability of the Order to a private limited company, both capital as well as revenue reserves should be

Companies Covered by the Order: The Order applies to all companies except certain categories of companies specifically exempted from the application of the Order. The Order also applies to foreign companies as defined in section 591 of the Act. According to sub- section (1) of the aforesaid section, companies falling under the following two classes are construed as foreign companies:  companies incorporated outside India which, after the commencement of the Act, establish a place of business within India; and  companies incorporated outside India which have, before the commencement of the Act, established a place of business within India and continue to have an established place of business within India at the commencement of the Act. In respect of foreign companies, an established place of business in India would include a liaison office. The Order is also applicable to the audits of branch(es) of a company under the Act since sub-section 3(a) of section 228 of the Act clearly specifies that a branch auditor has the same duties in respect of audit as the company’s auditor. It is, therefore, necessary that the report submitted by the branch auditor contains a statement on all the matters specified in the Order, except where the company is exempt from the applicability of the Order, to enable the company’s auditor to consider the same while complying with the provisions of the Order.

The requirements of the Order are supplemental to the existing provisions of section 227 of the Act regarding the auditor’s report. However, there are certain points of distinction between the Order and the requirements of section 227, which are as follows:  the provisions of sub-sections (1A), (2), (3) and (4) of section 227 are applicable to all companies while the Order exempts certain classes of companies from its application; and  the provisions of sub-section (1A) require the auditor to make certain specific enquiries during the course of his audit. The auditor is, however, not required to report on any of the matters specified in the sub-section unless he has any special comments to make on the said matters. In other words, if he is satisfied with the results of his enquiries, he has no further duty to report that he is so satisfied. The Order, on the other hand, requires a statement on each of the matters specified therein even if he has no comments to make on any of the matter(s) contained in the Order. In that respect, the provisions of the Order are similar to the provisions of sub-sections (2), (3) and (4) of section 227. Another question that arises is about the status of the Order vis a vis the directions given by the Comptroller and Auditor General of India under section 619 of the Act. In this regard, it may be noted that the Order is supplemental to the directions given by the Comptroller and Auditor General of India under section 619 in respect of government companies. These directions continue to be in force. Therefore, in respect of government companies, the matters specified in the Order will form part of the auditor’s report submitted to the members and the replies to the questionnaire issued by the Comptroller and Auditor General of India under section 619 will continue to be furnished as hitherto. The Order is not intended to limit the duties and responsibilities of auditors but only requires a statement to be included in the audit report in respect of the matters specified therein. For example, examination of the system of internal control is one of the basic audit procedures employed by the auditor. The fact that the Order requires a statement regarding the internal control applicable to purchases of inventories, fixed assets and sale of goods only is no justification for the auditor to conclude that an examination of internal control regarding the other areas of a company’s business is not important or not required.

The Central Government, in exercise of the powers conferred, under sub-section (4A) of section 227 of the Companies Act, 1956 (hereinafter referred to as “the Act”), issued the Companies (Auditor’s Report) Order, 2003, (CARO, 2003) vide Notification No. G.S.R. 480(E) dated June 12, 2003. CARO, 2003 contained certain matters on which the auditors of companies (except of those categories of companies which are specifically exempted under CARO, 2003) have to make a statement in their audit report. The Central Government vide Notification No.GSR.766(E) dated November 25, 2004 amended the said Order and issued the Companies (Auditor’s Report) (Amendment) Order, 2004. The term, “Order”, as used in the following text refers to the CARO, 2003 issued originally in June 2003 as amended by the Amendment Order issued in November 2004. The Order supersedes the earlier Order issued in 1988, viz., the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 (MAOCARO, 1988).

The following is an illustration of a complete auditor’s report incorporating the basic elements set forth and illustrated above. This report illustrates the expression of an unqualified opinion. “AUDITOR’S REPORT (Appropriate Addressee) We have audited the attached Balance Sheet of ..…… (Name of the entity) as at 31st March 2XXX and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion and to the best of our information and according to the explanations given to us, the financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: 1. in the case of the Balance Sheet, of the state of affairs of ……….. (Name of the entity) as at 31st March 2XXX; and 2. in the case of the Profit and Loss Account, of the profit/loss for the year ended on that date. For ABC and Co., Chartered Accountants Auditor’s Signature (Name of Member signing the Audit Report) (Designation) (Membership Number) Place of Signature: Date:

The auditor’s report includes the following basic elements, ordinarily, in the following layout: 1.Title;                                                                                                                                                                                                                                                  2.Addressee;                                                                                                                                                                                                                                         3.Opening or introductory paragraph  identification of the financial statements audited;  a statement of the responsibility of the entity’s management and the responsibility of the auditor; 4. Scope paragraph (describing the nature of an audit)  a reference to the auditing standards generally accepted in India;  a description of the work performed by the auditor; 5. Opinion paragraph containing a reference to the financial reporting framework used to prepare the financial statements; and  an expression of opinion on the financial statements; 6. Date of the report; 7. Place of signature; and 8. Auditor’s signature. A measure of uniformity in the form and content of the auditor’s report is desirable because it helps to promote the reader’s understanding of the auditor’s report and to identify unusual circumstances when they occur. A statute governing the entity or a regulator may require the auditor to include certain matters in the audit report or prescribe the form in which the auditor should issue his report. In such a case, the auditor should incorporate in his audit report, the matters specified by the statute or regulator and/or report in the form prescribed by them. 1.Title: The auditor’s report should have an appropriate title. It may be appropriate to use the term “Auditor’s Report” in the title to distinguish the auditor’s report from reports that might be issued by others, such as by the officers of the entity, the board of directors, or from the reports of others. 2. Addressee: The auditor’s report should be appropriately addressed as required by the circumstances of the engagement and applicable laws and regulations. Ordinarily, the auditor’s report is addressed to the authority appointing the auditor. 3. Opening or Introductory Paragraph: The auditor’s report should identify the financial statements of the entity that have been audited, including the date of and period covered by the financial statements. The report should include a statement that the financial statements are the responsibility of the entity’s management and a statement that the responsibility of the auditor is to express an opinion on the financial statements based on the audit. An illustration of these matters in an opening (introductory) paragraph is: “We have audited the attached Balance Sheet of ………. (Name of the entity) as at 31st March 2XXX and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audit.” 4. Scope Paragraph: The auditor’s report should describe the scope of the audit by stating that the audit was conducted in accordance with auditing standards generally accepted in India. The reader needs this as an assurance that the audit has been carried out in accordance with established standards. The Auditing and Assurance Standards issued by the Institute of Chartered Accountants of India establish the auditing standards generally accepted in India. The report should include a statement that the audit was planned and performed to obtain reasonable assurance whether the financial statements are free of material misstatement. The auditor’s report should describe the audit as including:  examining, on a test basis, evidence to support the amounts and disclosures in financial statements;  assessing the accounting principles used in the preparation of the financial statements;  assessing the significant estimates made by management in the preparation of the financial statements; and  evaluating the overall financial statement presentation. The report should include a statement by the auditor that the audit provides a reasonable basis for his opinion. An illustration of these matters in a scope paragraph is: “We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.” 5.Opinion Paragraph: The opinion paragraph of the auditor’s report should clearly indicate the financial reporting framework used to prepare the financial statements and state the auditor’s opinion as to whether the financial statements give a true and fair view in accordance with that financial reporting framework and, where appropriate, whether the financial statements comply with the statutory requirements. The term used to

The auditor should review and assess the conclusions drawn from the audit evidence obtained as the basis for the expression of an opinion on the financial statements. This review and assessment involves considering whether the financial statements have been prepared in accordance with an acceptable financial reporting framework applicable to the entity under audit. It is also necessary to consider whether the financial statements comply with the relevant statutory requirements. The auditor’s report should contain a clear written expression of opinion on the financial statements taken as a whole.

The statutory duties of the auditor cannot be limited in any way either by the Articles or by the directors or members but a company may extend them by passing a resolution at the general meeting or making a provision in the articles. [Newton v. Birmingham Small Arms Co. Ltd. [1875]. An auditor is expected to determine the scope of his duties on a consideration of the nature of business carried on by the concern, provisions of the law that govern the organisation and the system of internal control in operation. Under the Companies Act, sub-sections (1A), (2), (3) (4) and (4A) lay down scope of auditor’s duties. However, on taking into account the legal decisions in the cases which so far have been taken to courts, his duties and responsibilities can be summarised as follows :  To verify that the statements of account are drawn up on the basis of the books of the business : The auditor is not responsible for failure to disclose the affairs of the company kept out of the books and concealed from him which could not be known in the ordinary course of exercise of reasonable care and diligence. However, it is his duty to check the books for finding out that the position, as shown by the books of account, is true and substantially correct.  To verify that the statements of account drawn up on the basis of the books exhibit a true and fair state of affairs of the business : The duty of the auditor is not limited to mere verification of the arithmetical accuracy of the statements of account. He must find out that these are substantially correct, having regard to provisions in the Articles and the statute governing the business of the organisation under which it is being carried on.  To confirm that the management has not exceeded the financial administrative powers vested in it by the Articles or by any specific resolution of the shareholders recorded at a general meeting  To investigate matters in regard to which his suspicion is aroused as to the result of a certain action on the part of the servants of the company – He is, however, not required to start an audit with a suspicion or to prove in the manner of trying to detect a fraud or an irregularity unless some information has reached him which excites his suspicion or should arouse suspicion in a professional man of reasonable competence. This is because his duty is verification and not primarily detection of fraud. To perform his duties by exercising reasonable skill and care – For the verification of matters which are not capable of direct verification, he can rely on what he believes to be honest statements of the management. He must, however, review the verification of assets by the company and not rely merely on the statement made by the persons appointed by the company. Reporting on matters contained in the Directors’ Report – The duty of any auditor for making a report on the statement of account also extends to matters reported upon by the directors to the shareholders in so far as information which is required to be given by the Act in the statements of account or can be given in a statement annexed to the accounts, are contained in the report of directors (Provisio to Section 222). For instance, the opinion of the Board of Directors as regards current assets, loans and advances, when contained in the directors report, must be considered by the auditor.

Sub-sections (2) and (3) of section 227 provide that it is the duty of the auditor to report to the members of the company on the accounts examined by him and on every balance sheet and profit and loss account and every other document declared by the Act to be part of, or annexed to, the balance sheet and the profit and loss account, laid before the company in general meeting during the tenure of his office; also that the report shall confirm the position, envisaged in the undermentioned manner in which the requirements are to be met. Sub-section (2) specifically requires that the auditor should report whether in his opinion and to the best of his information and according to the explanations given to him, the said accounts give the information required by the Companies Act, 1956, in the manner so required and that the balance sheet gives a true and fair view of the company’s affairs at the end of financial year and the profit and loss account gives a true and fair view of the profit or loss for the financial year. Sub-section (3) requires that the auditor shall report on the following matters : 1.Whether he has obtained all the information and explanations which to the best of his knowledge and belief were necessary for his audit. The significance of such a requirement is that the auditor must obtain due satisfaction about the scope of work carried out by him and affirm that in the discharge of his duties he has maintained professional standards of diligence and care. It should, however, be noted that in the matter of examination of evidence as regards the state of affairs of the company, his duty is limited only to the verification of the evidence that is made available to him in the ordinary course of audit or that which he would call upon to examine on a doubt having arisen that there is something amiss. Suppose, the interest of a director in a transaction, entered into by the company has not been disclosed in the record maintained by the company, as required by section 301 of the Act or the Property Register has not been intentionally produced to prevent detection of the items of plant and machinery that have been given away on loan to a director. In either case, the auditor would not be responsible for failure to track down the frauds, provided during the course of his examination he had asked for the Contract and Property Registers, but the first was incomplete and the existence of the second was denied : provided also that there did not exist any circumstances to arouse his suspicion that some information had been held back deliberately and he had duly reported the violation of the legal requirements. Justice Lindley in his famous judgment, in the London and General Bank case, propounded this view. The relevant passage from the judgment is quoted below : “An auditor, however, is not bound to do more than exercise reasonable care and skill in making enquiries and investigations. He is not an insurer: he does not guarantee that the books do correctly show the true position of the company’s affairs; he does not guarantee that his balance sheet is accurate according to the books of the company, if he did, he would be responsible for an error on his part, even if he were himself deceived without any want of reasonable care on his part say, by the fraudulent concealment of a book from him.” Lopes L. J., held in his judgment in the case of Kingston Cotton Mills that auditors must not be made liable for not tracking out ingeniously and carefully laid scheme of fraud when there is nothing to arouse their suspicion and when those frauds have been perpetrated by the tried servants of the company and have been undetected for years by the directors. Thus, for the collection of information, the auditor is entitled to rely upon trusted servants of the company; he can accept representations made by them either orally or in writing, provided reasonable care is taken to ensure that the data or information furnished are true and could be trusted to have been prepared in the course of the working of the company. If, however, there is any circumstances that should arouse suspicion, it would be the auditor’s duty to probe it to the bottom. So long as there is no such suspicion, he is only expected to exercise normal caution and care. 2.Whether in his opinion, proper books of account as required by law have been kept by the company, so far as appears from his examination of those books and proper returns adequate for the purpose of his audit have been received from branches not visited by him. The proper term ‘books of account’ is defined indirectly under sub-section (1) of section 209 wherein it is stated that a company shall not be deemed to have kept proper books of account in respect of matters specified in sub-sections (1) and (2) of section 209, if there are not kept such books as are necessary to give a true and fair view of the state of affairs of the company or branch office, as the case may be, and to explain its transactions. The Companies (Amendment) Act, 1988 further requires that the proper books of account shall not be deemed to be kept if such books are not kept on accrual basis and according to the double entry system of accounting. Further, in section 541(2), it is provided that a company that is being wound up shall be deemed not to have maintained proper books of account if it had not kept: such books of account as are necessary to exhibit and explain the transactions and financial position of the business of the company including books containing entries made from day to day in sufficient detail of all cash received and all cash paid; and  where the

Sub-sections (1A), (2), (3), (4) and (4A) of the Companies Act, 1956 specifies the duties of an auditor of a company in a quite comprehensive manner. It is noteworthy that scope of duties of an auditor has generally been extending over all these years. The Companies (Amendment) Act of 1965 introduced two sub-sections (1A) and (4A) in section 227 of the Act; the sub-sections are reproduced below : “(1A) Without prejudice to the provisions of sub-section (1), the auditor shall enquire: whether loans and advances made by the company on the basis of security have been properly secured and whether the terms on which they have been made are not prejudicial to the interests of the company or its members;  whether transactions of the company which are represented merely by book entries are not prejudicial to the interests of the company;  where the company is not an investment company within the meaning of section 372 or a banking company, whether, so much of the assets of the company, as consist of shares, debentures and other securities have been sold at a price less than that at which they were purchased by the company;  whether loans and advances made by the company have been shown as deposits;  whether personal expenses have been charged to revenue account;  where it is stated in the books and papers of the company that any shares have been allotted for cash, whether cash has actually been received in respect of such allotment, and if no cash has actually been so received, whether the position as stated in the account books and the balance sheet is correct, regular and not misleading.” (4A) “The Central Government may, by general or special order, direct that, in the case of such class or description of companies as may be specified in the order, that auditor’s report shall also include a statement on such matters as may be specified therein : Provided that before making any such order, the Central Government may consult the Institute of Chartered Accountants of India constituted under the Chartered Accountants Act, 1949 in regard to the class or description of companies and other ancillary matters proposed to be specified therein unless the Government decides that consultation is not necessary or expedient in the circumstances of the case.” It may be noted that sub-section (1A) is independent both of sub-section (1) which narrates the powers of auditors, and of sub-sections (2) and (3) which states the function and duties of the auditors. It is merely a directive to the auditor to make certain specific enquiries. In the circumstances, it would be presumed that the legislature by its introduction did not intend to extend the scope of audit report or its form generally. This view is strengthened by the introduction of sub-section (4A). It empowers the Central Government to extend the scope of the audit report in respect of a particular class or description of companies by requiring a statement on such matters as may be specified by the Central Government by a general or special order to be included there. The opinion of the Research Committee of the Institute of Chartered Accountants of India on section 227(1A) is reproduced below : “The auditor is not required to report on the matters specified in sub-section (1A) unless he has any special comments to make on any of the items referred to therein. If he is satisfied as a result of the inquiries, he has no further duty to report that he is so satisfied. In such a case, the content of the Auditor’s Report will remain exactly the same as the auditor has to inquire and apply his mind to the information elicited by the enquiry, in deciding whether or not any reference needs to be made in his report. In our opinion, it is in this light that the auditor has to consider his duties under section 227(1A).” Therefore, it could be said that the effect of the introduction of sub-section (1A) is that the auditor should make a report to the members in case he finds answer to any of these matters in adverse. But he has to enquire into all the matters specified in the Order and report thereon.