CA Final Audit November 2026: Important Topics to Revise for the Exam

tWith the CA Final November 2026 examinations underway, revising important Audit concepts and recalling key provisions can make a difference while attempting exam questions. Areas such as Professional Ethics, CARO 2020, Group Audit, Bank Audit, NBFC Audit and Digital Auditing cover key provisions, procedures and practical applications that you need to recall accurately while attempting exam questions. Leaving these topics until the last few days can make revision more difficult.

To help you revise these areas in one sitting, PW brings you the CA Final Audit Marathon. The session covers important concepts and exam-relevant questions across major Audit topics, helping you revisit key points and identify areas that need more practice before November. You can also strengthen your CA Final November preparation with PW’s dedicated CA batches, live and recorded lectures, revision resources, PDF notes, DPPs and regular practice exams. 

CARO 2020: Applicability And Key Clauses

CARO 2020 is issued under Section 143(11) of the Companies Act. Its matters form part of the auditor’s Other Reporting Responsibilities, not the principal audit opinion sections.

It generally applies to companies, including foreign, government, electricity-sector companies, and branches. It does not apply to insurance companies, banking companies, Section 8 companies, OPCs, small companies, specified private companies, and consolidated financial statements, except Clause 21.

Memory Tip: Remember the main exclusions as IB COPS—Insurance, Banking, Section 8, OPC, Private companies, Small companies.

A small company must generally be a non-public company with paid-up capital up to Rs. 10 crore and turnover up to Rs. 100 crore, using immediately preceding-year data. A private-company exemption follows TOP:

• T — Turnover: Up to Rs. 10 crore

• O — Outstanding borrowings: Up to Rs. 1 crore

• P — Paid-up capital plus reserves: Up to Rs. 1 crore

Borrowings are tested at any point during the year.

Important CARO reporting areas include:

• PPE and intangible-asset records and physical verification.

• Title deeds and revaluation by a registered valuer.

• Inventory verification and discrepancies of 10% or more.

• Working-capital limits exceeding Rs. 5 crore, based on sanctioned limits.

• Loans, guarantees, investments, repayment schedules, overdue amounts, and loans used to repay old loans.

• Statutory dues unpaid for more than six months.

• Borrowing defaults, wilful defaulter status, diversion of funds, and short-term funds used for long-term purposes.

• Fraud, related-party transactions, internal audit, non-cash transactions, RBI registration, cash losses, going concern, CSR, and Clause 21 disclosures in CFS.

Group Audit And Consolidated Financial Statements

Consolidated financial statements are prepared when an entity has subsidiaries, joint ventures, or associates. The parent is responsible for identifying all components, obtaining financial information, harmonising accounting policies, making consolidation adjustments, and performing gap conversion where foreign frameworks are used.

Under AS 21, temporary control may permit an exemption. Under Ind AS 110, temporary control generally does not exempt consolidation. An investment entity measuring investments at FVTPL may receive specific relief.

 The group auditor should evaluate component auditors under SA 600, including their competence, independence, work performed, and reporting modifications. Materiality must be determined both for the group and individual components.

Key consolidation adjustments include:

• Elimination of intra-group balances, income, expenses, and unrealised profits.

• Related deferred-tax adjustments.

• Goodwill and capital-reserve calculations.

• Allocation of pre-acquisition reserves entirely to NCI.

• Allocation of post-acquisition reserves between the parent and NCI.

Memory Tip: Remember the parent’s additional tasks as Adjust – Convert – Harmonise.

Subsidiaries are consolidated line by line, while associates and joint ventures generally use the equity method. Unaudited components require quantitative and qualitative materiality assessment. A material unaudited component may result in a modified opinion.

PSU Audit And CAG Responsibilities

A government company generally has at least 51% government-held paid-up share capital. The CAG may appoint or reappoint auditors, issue audit directions, conduct supplementary audits, and conduct test audits.

A supplementary audit may be conducted within 60 days of receiving the audit report. A test audit may be conducted at any time.

CAG reports are examined by:

• Public Accounts Committee.

• Estimates Committee.

• Committee on Public Undertakings.

Memory Tip: Remember these committees as PEC—Public Accounts, Estimates, and Committee on Public Undertakings.

PSU audits may include financial, compliance, propriety, comprehensive, and performance audits. A performance audit examines economy, efficiency, and effectiveness. Propriety audit examines whether expenditure is financially prudent, lawful, in the public interest, and free from personal benefit.

Bank And NBFC Audit Essentials

Bank audits require special attention because of high transaction volumes, complex IT systems, extensive regulation, off-balance-sheet items, and customer-initiated transactions.

The auditor should examine:

• CRR and SLR compliance.

• IT general controls, access controls, segregation of duties, and exception reports.

• Loan sanction, security, margin, drawing power, and annual review.

• NPA classification, provisioning, restructuring, and recovery.

• Investments, deposits, contingent liabilities, guarantees, and revenue leakage.

NPA classification generally follows the borrower, not an individual facility. An account may become an NPA when principal or interest remains overdue for more than 90 days, or when a cash-credit account becomes out of order.

 For agricultural advances, Priority Sector crops become NPAs after more than one crop season for long-duration crops or two crop seasons for short-duration crops.

For NBFCs, the 50–50 test examines whether financial assets exceed 50% of adjusted total assets and financial income exceeds 50% of gross income. NBFCs require RBI registration under Section 45-IA, unless an exemption applies.

Important NBFC areas include:

• CRAR and risk-weighted assets.

• Tier 1, Tier 2, and CET1 capital.

• NPA classification and provisioning.

• Deposit-taking capacity and credit rating.

• RBI exception reporting.

• Division III of Schedule III.

 Also Read: Complete Guide on CA Exam Preparation

ESG, BRSR, and Sustainability Audit

ESG means Environmental, Social, and Governance. ESG reporting covers pollution, climate risk, resource use, employee welfare, human rights, consumer safety, ethics, bribery, board structure, and tax transparency.

India uses the Business Responsibility and Sustainability Report (BRSR):

• Section A: General disclosures.

• Section B: Management policies and processes.

• Section C: Principle-wise performance disclosures.

The nine BRSR principles address ethics, sustainable products, employee well-being, stakeholder interests, human rights, environmental protection, policy advocacy, equitable development, and consumer welfare.

Assurance engagements may involve reasonable or limited assurance. The auditor should consider climate-related risks under standards such as SA 200, SA 315, SA 250, SA 570, SA 706, and SA 720.

Memory Tip: BRSR assurance follows POI–RSP—Preliminary review, On-site assessment, Issue report, Review responses, Submit findings, Prepare final report.

Internal Audit, Investigation And Forensic Accounting

Internal audit reviews governance, controls, risk management, operations, laws, policies, and resource utilisation. Under Section 138, it is mandatory for listed companies and specified public and private companies meeting prescribed thresholds.

The auditor should maintain independence and should not perform management’s accounting or compliance duties. The internal audit report should generally include a draft report, recommendations, management action plan, follow-up, and final reporting.

Investigation establishes facts, while due diligence confirms material information. Forensic accounting combines accounting, auditing, investigation, law, and evidence analysis for matters that may reach court.

A forensic investigation must establish:

• What fraud occurred.

• Who committed it.

• How it was committed.

• The amount involved.

Evidence requires a complete chain of custody. A break may affect admissibility. The forensic accountant should report factual findings and should not declare a person legally guilty or innocent.

Digital Auditing And Cybersecurity

Digital auditing examines IT systems, software, digital assets, automated controls, and financial-reporting reliability. Auditing digitally means using tools such as Excel, Power BI, ACL, Alteryx, and CaseWare.

 Under SA 315, the auditor should understand the automated environment, including hardware, software, systems, transaction flow, technology, controls, and complexity.

Cybersecurity risks include malware, ransomware, phishing, spoofing, insider threats, DNS tunnelling, and denial-of-service attacks. Cyber incidents may cause privacy breaches, business interruption, regulatory costs, intellectual-property loss, and fines.

The cybersecurity framework follows:

1. Identify.

2. Protect.

3. Detect.

4. Respond.

5. Recover.

Emerging technologies such as AI, IoT, blockchain, NFTs, RPA, AR, VR, and the metaverse create new risks relating to bias, privacy, security, governance, regulation, and data accuracy.

Get ready for an extensive revision of CA Final Audit in this marathon session by PW. The video revisits important concepts and exam-relevant areas, including Professional Ethics, CARO 2020, Group Audit, PSU Audit, Bank Audit, NBFC Audit, SDG and ESG Audit, Internal Audit, Due Diligence, Investigation, Forensic Accounting and Digital Auditing.

Strengthen your CA Final Audit preparation for November 2026 by revising important concepts, revisiting key provisions and practising exam-oriented questions. With PW's CA batches, live and recorded lectures, DPPs, weekly practice exams and doubt support, you can keep your revision and question practice on track.