Pt'E GQOUPI -PAPFR 2 AUDITING AND ASSURANCIr Roll No... visit: www.fb.com/camaterials MAY 2010 IPce GROUP.IIPAPER.S AUDITINGAND ASSURANCE Total No. of Questions-] [Total No. of Printed Pages-7 Time Allowed-3 Hours Maximum Marks~lOO KVS 4 '. Answers to questions are to be given only in English except in the case of candidates who have opted for Hindi medium. If a candidate who has not opted for Hindi medium, answers in Hindi, his answers in Hindi will not be valued. Answer all questions. Marks 1. State with reasons (in short) whether the following statements are True or False: 10x2 =20 (i) While conducting audit of Government Companies, the auditors are paid their Professional Fees as prescribed by the Government. (ii) The auditor compares entries in the books of accounts with vouchers and if two agrees, his work is done. (iii) Confirmations received by the auditor directly from third parties are conclusive evidence in support of a transaction. (iv) Audit Committee is to be formed by each and every company and the auditor has no compulsion to attend the meeting of the..audit Committee. (v) A company can not declare dividends without providing for depreciation. (vi) When an auditor identifies a Misstatement resulting from fraud, it is his responsibility to communicate it to the regulatory and enforcement authorities apart frpm those charged with governance. (vii) The auditor should study the Memorandum and Articles of Association to see the validity of his appointment. (viii) A special resolution is required by company to authorise issue of shares at discount. (E&H) KVS P.T.D.
t visit: www.fb.com/camaterials ~' ( 2 ) KVS,.'/J...:. IV.....,.t;?t... L cr,.~ '. Marks.... (if) The Investments made by the 'company in Government Securities like NSC, Government Bonds, etc. should be kept in'personal custody of Financial Controller of the Company.. (x) The company in which 15% of subscribed capital is held by State Financial Corporation and 10% of Subscribed capital is held by General Insurance Co., the appointment of auditor can be done by passing a general resolution at annual general meeting... 2. Comment on the following situations: MT. Y was appointed as an auditor of PQR Ltd. for the year ended 31.3.2009 at Annual General Meeting held on 16.0.200. Mr. Y has been indebted to the company for sum of Rs. 10,000 as on 1.4.200, the opening date of accounting year which has been subject to his audit. However, Mr. Y having come to know that he might be appointed as auditor, he repaid the amount on 10..200. One of the shareholders, complains that the appointment of Mr. Y as an auditor was invalid because he incurred disqualification U/S 226 of the Companies Act, 1956. XYZ (Pvt.) Ltd. has paid up Capital and Reserves of Rs. 60 lacs and secured Loans of N ationalised Banks having sanctioned limit of Rs. 2 lacs and outstanding balance of Rs. 23 lacs. The turnover of the company is 5.10 crores for the year ended 31.3.2009. A customer returns goods worth 40 lacs on 2.4.2009, out of sales made during the year ended 31.3.2009. The management of CO. is of the opinion that CARO, 2003 is not applicable to the company. (c) C Ltd. declared dividend amounting to Rs. 5 lacs out of~rofits for the year ended 31.3.2009. 6 6 Subsequently, it was noticed that company had failed to make provisions for Outstanding expanses ofrs. 7.0 lacs and Closing stockwas also over v.alued, which was not reported by auditors of the company. Management of C Ltd. helds auditors responsible for this situation. 3. A trader is worried that inspite of substantial increase in sales compared to earlier year, there is considerable fall in Gross Profit after satisfying himself that sales and expenses are correctly recorded and that the valuation of inventories is on consistent basis, he wants to ensure that purchases have been'truthfully recorded. How will you proceed with this assignment? (E&H) KVS 10 \,
. ~ I ~ visit: www.fb.com/camaterials ( 3 ) KVS Marks 4. Discuss Internal Controls in a CIE;;Environment. Differentiate between 'Qualified report' and 'Adverse report'. 5. Draft an audit programme for conducting audit of accounts Body. 5 5 of a Local.. 5! 'The extent of audit procedure performed on corresponding figure is less compared to audit of current period figures', reporting. Justify the statement with regard to auditor's duties for reporting of comparatives under AAS 25. 6. 'Doing the audit in EDP environment is simpler since Trial Balance always tallies.' 5 5 Analyse the statement critically. 'A Joint Auditor is not bound by the views of the majority of the joint auditors regarding matters to be covered in the report.' 5 Justify this statement in the light of responsibilities of Joint Audit9rs under AAS 12. 7. How would you vouch/verify the following? 5x2=10 Reduction in Share Capital Receipt of Capital subsidy.. Write short notes on the following: 5x2=10 Substantive Procedures Audit Working Papers. '0 (E&H) KVS P.T.O.
,pee 'PeE Gar!'!" T- P" pv1t 2 GROUp" PAPER.S Ro~~&.I}: ~.:::.G'..~.~. P...;~.~~.CJ.R~NCK AUDiJiNG AlVDASSURANCE Total No. of Questions - 7 NCV 2010 Total No. of Printed Pages - Time Allowed: 3 Hours Maximum Marks: 100 BDL-H Answers to questions are to be given only in English except in the case of candidates who'have. \. opted for Hindi Medium. If a candiqate has qot optyd for ijindi medium, his answers in Hindi will not be valued. Question No.1 is compulsory. Attympt any five questions frpm thy remaining s.~ questions. 1. Comment as a auditor on the following situations: - Marks (c) Mr. X, a partn~r in X & Co., a fjrm of, a Ch';lrter~dAccountants, died on 31-3-2010 after completing routine au<utwor:kof XYZ Compan.y'Ltd.. Mr. Y another partner of the, firm of Chartereq' AccQuntaPt~ signyd thy financial statements of XYZ Company Ltd., without reviy,wing tbe finali.zatiqnwork done by thy assistants. Government of India has appointed ~I:. M, a, retir~;dfir;mqcedirector and a,,. non-practising memberof the Institute of Ch;arteredAccountaQ~sof,India, as an auditor to conduct special audit of ABC Ltd. on tit}(grou,nd that the co.t;ilpany. was not being managed on sound business principles. The Managing Director, of the company contends that the appointment., oj Mr. M,isnot valid'because he does not hold a certificate of practice. M.N.P. Company Ltd. purchased a machinery for ~ 1.00 crore. The State Government granted the company a subsidy of ~ 40 lakhs to meet partial cost of machinery. The company credited the subsidy received from the State Government to its Profit and Loss Account for the year ended March 31,2010. 5 5 5 BDL-H P.T.O.
(2) BDL-H Marks (d) Sri & Company, a firm of Chartered Accountants was appointed as statutory 5 auditors of Aaradhana Company Ltd.. Aaradhana Company Ltd. holds 51% shares in Sarang Company Ltd.. Mr. Sri, one of the partners of Sri & Company, owed ~ 1,500 as on the date of appointment to Sarang Company Ltd. fot;.goods. purchased in normal course of business. 2. Explain briefly the technique of "Internal Control Questionnaire" to facilitate 4 the ac,cumulation of information necessary for proper evaluation of internal control. State clearly the circumstances where "Auditing through the computer" approach must be used. 6 (c) What do you mean by the term 'Sufficient Appropriate Audit Evidence'? State 6 various factors that help the auditor to ascertain as to what is sufficient appropriate audit evidence. 3. "The auditor is faced with sampling risk in both tests of control and substantive, procedures." Comment on this statement with reference to SA 530 on,"audit Sampling". ". What are the factors that determine the extent of reliance that the auditor places on results of analytical procedures? Explain ~ithreference to SA-520 on "Analytical procedures". 4. Write short notes on any four of the following: Reliability of external confirmations. 4x4 =16 Physical verification of fixed assets "at reasonable intervals". BDL-H
(3) BDL-H Marks (c) Verification of credit sales. (d) Factors governing modes of communication of auditor with those charged with. governance. (e) Procedures to be performed by the auditor in expressing opinion on 'going concern' assumption. 5..Mention bri~fly important points which an auditor will consider while conducting the audit of a club. What important points should an auditor keep in mind while checking receipt of income of a Non-Governmental Organization (N.G.O.)? 4 (c) State briefly the circumstances when an auditor issues a disclaimer of opinion. 4 6. Comment on the following: X Ltd. has its Registered Office at Mumbai. During the current accounting year 4 it shifted its Corporate Office to Delhi. The Managing Director of th Company wants to shift company's books of account to Delhi because he holds the view that there is no legal bar IIIdoing so., A partnership firm revalued its fixed assets like land and building. The firm 4 adequately disclosed the revalued amounts in the Balance Sheet. Do you, as an auditor, approve the disclosure given by the partnership firm? (c) RK. & Company are the auditors of PQR Company Ltd. The Managing 4 Director of the Company demands copies of the working papers from the auditors. Are the auditors bound to'oblige the Managing Director? BDL-H P.T.O.
(4) BDL-H (d) "Responsibility for properly determining the quantity and value of inventory Marks 4 rests with the management." Comment on this statement... ṙ 7. What points shall an auditor keep in mind while auditing an account of Bought 4 Ledger having a debit balance? PQR Company Ltd. removed their first auditor by passing a resolution in the 4 meeting of the Board of Directors for his removal without obtaining prior approval from the Central Government. Offer your comments in this regard. (c) R & M Company, a firm of Chartered Accountants, was appointed as statutory auditors of XYZ Company Ltd. Draft an engagement letter accepting the appointment as auditors. BDL-H \.
\,' jio ".. -~- t.o visit: www.fb.com/camaterials PCE GQOUPI. PAPFR 2 AUDITING AND ASSURANCI' MAY 2011,pee GROUP." p,,"er.s Roll No. "...,... AUQ\1\NGAND ASSURANCE Total No. of Questions - 7 Total No. of Printed Pages - 4 Time Allowed - 3 Hours Maximum Marks - 100 ERL-H Answers to questions are to be given only in English except in the case of candidates who have opted for Hindi Medium. If a candidate has not opted for Hindi medium, his answers in Hindi will not be valued. Question No.1 is compulsory. Attempt any five questions from the remaining six questions. Marks 1. Comment on the following in relation to SAs : "The work performed by each assistant needs to be reviewed by personnel of at ' least equal competence." 5 "Audit documentation serves a number of additional purposes." 5 (c) "Management is responsible for compliance with laws and regulations." 5 (d) "Auditor shall establish an overall strategy that sets the scope, timing and 5 directions of the audit, and that guides the developmeilt.ofthe audit plan." 2. Explain various methods to obtain audit evidence. List out some examples of fraud that can be done by ledger keeper in Bought ledger and Sales ledger. 'ERL...;H P.T.O.
3. visit: www.fb.com/camaterials (2) ERL-H Discuss limitations of audit. Marks Discuss prerequisites and fundamental principles to be possessed by an auditor. 4. Give various factors which result in increase in gross profit. Define depreciation and discuss various purposes of providing depreciation. 5. Mention any special points which you as an auditor would look into while auditing x2 the books of accounts of: = 16 Hospital Cinema 6. Explain the concept of Joint Audit. Discuss its advantages and disadvantages. Explain the powers of company to purchase its own securities. 7. Write short notes on any four of the following: Reissue of redeemed debentures. 4x4 = 16 (c) (d) (e) Internal control in Small Business Stratified Sampling Audit of expenditure in Government audit. Cut-off procedure. \.. ERL-H. ~
..-...... PeE It:;. visit: www.fb.com/camaterials GQOUP r - PAWl.2 AUDITINGAND~ANa RollNo.... IPce GROUP.IIPAPEII- AUDITINGAID AlSU"'" Total No. of Questions - 7 Total No. of Printed Pages - 4 NOV 2011 Time Allowed - 3 Hours Maximum Marks - 100 OPD-H " Answers to questions are to be given only in English except in the case of candidates wlio have opted for Hindi Medium. If a candidate has not opted for Hindi medium, his answers in Hindi will not be valued. Question No.1 is compulsory. Attempt any five questions from the remaining six questions. 1. Comment on the following: Marks "It is not mandatory to send a new engagement letter in recurring audit, but 5 sometimes it becomes mandatory to send new letter." Explain those situations where new engagement letter is to be sent. Vouching of payment of taxes. 5 (c) Removal of auditor before expiry of term. 5 (d) What procedure an auditor should adopt, to test the authenticity of 5 cash at bank. 2. Explain the objectives of internal audit. How an auditor can audit allotment of debentures? 3. Explain the process of external confirmation. Give some examples where external confirmation can be used as audit evidence. What are the duties of an auditor in case of reduction of capital? ' \. OPD-H P.T.O.
~ visit: www.fb.com/camaterials " " 4. (2) OPD-H Marks What is CAATS? Why are CAAT required in Computerised information system (CIS) environment? What is Companies (Auditor's Report) Order. 2003? Explain the companies which are not covered by the CARO order. 5. Mention special points which you as an auditor would look into while auditing the accounts of a Recreation Club with facilities for indoor games and in house eatery. What are the focus points in doing propriety audits by C & AG as regards government expenditure? 6. Discuss the areas in which different accounting policies may be adopted. 6 Discuss the types of audits required under law. 5 (c) Disclosure requirements of debtors in the financial statements. 5 7. Write short notes on any four of the following: Importance of working papers. Reliability of Audit Evidence. (c) Audit of sale of Investments. (d) Verification of assets acquired on lease. (e) Advantages of statistical sampling in Auditing. 4x4 =16 \. OPD-H.,
IICX G.OUP I - PAl'll. 2 AUDITINGAND ASSURANC!' RollNo.... IP.CC. GRItJP.nPAPER" AUDtTINGANDASSURANCE Total No. of Questions ~ 7 Total No. of Printed Pages - 4 Time Allowed - 3 Hours Maximum Marks - 100 SME-H Answers to questions are to be given only in English except in the case of candidates who have opted for Hindi Medium. If a candidate has not opted for Hindi medium, his answers in Hindi will not be valued. Question No.1 is compulsory. Attempt any five questions from the remaining six questions. 1. Marks Discuss on the following: Shares issued at a discount. 5 Ceiling on number of audits in a company to be accepted by an auditor. 5 (c) Purposes of providing depreciation..5 (d) Filling of a casual vacancy of auditor in respect of a company audit. 5 2. Explain the concept of "True and Fair" view. 6 Mention the areas in which differing accounting policies are encountered and 10 how that would be disclosed? 3. What are the duties of Comptroller and Auditor General? 10 State any six basic elements of the Auditor's Report. 6 4. What are the factors that are to be considered while designing a confirmation ' request? Distinguish between Auditing and Investigation. SME-H P.T.O. \.
5. visit: www.fb.com/camaterials (2) SME-H Marks What are the eight audit points to be considered by the auditor during the audit of a Hospital? As an auditor, how will you verify application and allotment money received on shares issued for cash? 6. What are the audit working papers? Discuss various contents of current file. Explain, what are the factors to be considered while "Vouching of travelling expenses"? 7. Write short notes on any four ofthe following: Audit of discounted bills receivable dishonoured. Auditor's lien.. (c).inherent risk. 4x4 =16 (d) (e) Cut-off arrangements. Examination in depth. I SME-H \..