Q1Banking and finance terminology
1 marks easy
The term 'Drawing Power' is associated with which of the following facilities as sanctioned by any Bank:
(a) Letter of Credit
(b) Overdraft
(c) Cash Advances
(d) Cash Credit Limit
Q1Auditor's Responsibilities - SA 315
10 marks hard
Read the facts with reason (in short) whether the following statements are true or false
Q2Types of audit
1 marks easy
...aims at ascertaining that the expenditure incurred has been on the purpose for which the grant and appropriation has been provided and that the amount of such expenditure is properly authenticated and vouched.
(a) Audit against provision of funds
(b) Propriety audit
Q2Professional Integrity and Independence
4 marks medium
Professional integrity and independence are considered essential characteristics of an auditor. There are two interrelated aspects of independence and objectivity that auditors must consider.
Q3Auditing Standards
2 marks easy
Which of the following is not correct-
(a) AS 13 - Related Party Disclosures
(b) AS 12 - Property, Plant & Equipment
(c) AS 5 - Tangible Assets
(d) AS 16 - Intangible Assets
Q3Audit Nature and Scope
5 marks medium
Professional engagement responsibilities
Q4Data Analytics in Audit
2 marks easy
Code and techniques that auditors use in applying the principles of data analytics are known as-
(a) Computer Aided Audit Technique
(b) Computer Aided Audit Tools
(c) Computer Accounting and Auditing Technique
(d) Computerized Auditing Process
Q4Audit Planning - SA 300
6 marks medium
SA 300 states that auditor should plan his work to enable him to conduct an effective audit.
Q5Fraud Detection
2 marks easy
______ refers to events or conditions that indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud-
(a) Fraud Risk Factors
(b) Misappropriation of assets
(c) Incentives/Pressures
(d) Fraud
Q5Audit Strategy
4 marks medium
In establishing the overall audit strategy, the auditor shall identify the characteristics of the engagement that define its scope.
Q6Audit Strategy and Documentation
5 marks hard
Case: M/s Simzer Amir & Associates statutory audit of Ganga Ltd. FY 2022-23
M/s Simzer Amir & Associates are the statutory auditors of Ganga Ltd. for FY 2022-23. M/s Simzer & Associates are the engagement partner for such assignment. While discussing with the engagement partner, Ms. GA Simzer tells that the auditor shall understand the entity and its environment and apply procedures and conduct the audit on a timely basis after the date of auditor's report. ISO 1 requires time to establish policies and procedures for the retention of engagement documentation. Explain.
Q6Audit Documentation
0 marks easy
As audit Documentation deals with the author's responsibility to prepare audit documentation for an audit of financial statements. Such audit documentation serves various purposes. Explain.
Q7Written Representations
0 marks easy
During the course of audit, CA Suri, the engagement partner requested the component auditor to provide written representation with respect to his audit. Why should CA Suri below such a situation?
Q8Audit Evidence - Sufficiency
0 marks easy
What are the various factors affecting the auditor's judgment as to the sufficiency of the audit evidence.
Q9Internal Control Procedures
0 marks easy
Explain with help of examples in respect of the procedures for sales.
Q10Internal Control Components
0 marks easy
The division of internal control into components provides a useful framework for auditors to consider how different aspects of an entity's internal control could may affect the audit. Mention those components of internal control.
Q1.1Audit Planning and Engagement Activities
1 marks easy
Case: Simran Kaur is offered appointment as auditor of a company engaged in manufacturing of automobile components. She faces issues relating to ensuring quality of work for promoters and ensuring engagement team competence.
Auditor is concerned about promoters and key managerial persons. She is also considering competence of staff to perform engagement. What is she trying to do?
(A) She is establishing audit strategy.
(B) She is conducting preliminary engagement activities.
(C) She is designing audit plan.
(D) She is checking her compliance of ethical requirements.
Q11Audit Procedures - Cash Receipts
0 marks hard
An audit of Financial statements of PQR Ltd. requires the Auditor that the Cash receipts are properly supervised. Give examples of such techniques which may have led...
Q11Fraud / Manipulation of Accounts
0 marks easy
Manipulation of Accounts: Detection of manipulation of accounts with a view to present a higher state of affairs in the financial statements generally constitutes fraudulent activity and is initiated in higher management level and associated with the fraud of the type
(A) Directors override controls
(B) To avoid incidence of income-tax or other basis
(C) Is without declaration of dividend when there is adequate profit (this is, if there is adequate profit, the directors will be forced to declare dividend, the company cannot retain earnings)
(D) For receiving higher remuneration where managerial remuneration is payable by
Q1.2Audit Planning - Strategy vs Plan vs Programme
1 marks easy
Case: Simran Kaur is offered appointment as auditor of a company engaged in manufacturing of automobile components.
Consideration of number and location of branches, requirements of financial reporting framework and expected time of completion are relevant factors primarily for which of the following?
(A) Developing audit plan
(B) Determining overall audit strategy
(C) Designing audit programme
(D) Designing audit procedures
Q12Audit Procedures - Cash Receipts
0 marks hard
Is an audit of Financial statements of PQR Ltd., CA Visai Morbaa finds that the Cash receipts are properly supervised. Give examples of such techniques which may have led
Q12Fraud / Teeming and Lading
0 marks hard
Case: Ramesh engaged in teeming and lading - misappropriating customer receipts and using subsequent customer payments to conceal the fraud
Teeming and Lading: Ramesh received from a customer being misappropriated, also to prevent the money received from another customer subsequently involved from being discovered.
Q12Accounting treatment of miscellaneous receipts and capital/r
0 marks easy
Net accounting for miscellaneous receipts, e.g., sale of scrap to employees, etc.
Q1.3Risk Assessment Procedures
1 marks easy
Case: Simran Kaur is preparing detailed set of instructions for engagement team including checking of documents and standards to be observed.
Taking into account description of planned inquiry and visit, which of the following appears to be true?
(A) Planned inquiry and visit will fall in field of engagement assessment procedures
(B) Planned inquiry and visit are planned risk assessment procedures and fall in field of
(C) The said description is not related to audit planning.
(D) Planned inquiry and visit fall in scope of audit programme.
Q13Audit in Automated Environment
0 marks easy
With respect to audit in an automated environment, explain the following:
Q13Computer-Assisted Audit Techniques and Information Systems c
0 marks easy
Define and explain the following terms related to Computer-Assisted Audit Techniques and IT Systems:
Q1.4Audit Documentation
1 marks easy
Case: Simran Kaur has prepared detailed set of instructions for engagement team covering details of checking, standards, and services.
Instructions given by an audit firm to assistants or engagement team are known as?
(A) Audit guidelines
(B) Audit plan
(C) Audit Programme
(D) Audit Procedures
Q14Auditor's Responsibilities
0 marks easy
The auditor's responsibility includes reporting on Internal Financial Reporting which includes an understanding ('I' environment) of the company and relevant personnel. Mention the situations where if an 'I' event on an aud...
Q14Internal Financial Controls in IT environments (SA 315, SA 3
0 marks easy
With the implementation of Management Information Systems (MIS), an organization must implement Internal Financial Controls (IFCs). Identify and explain situations in which IFCs will not be relevant to an audit.
Q1.5Audit Team Management
1 marks easy
Case: Simran Kaur has prepared detailed instructions for engagement team, but scope has been overvalued in the instructions.
The issue of scope has been overvalued in detailed set of instructions given to engagement team. What should be the proper course of action by CA Simran Kaur?
(A) She should discuss the same with the engagement team
(B) She should modify earlier set of instructions.
(C) She should leave the matter to wisdom of engagement team
(D) She should put the task in court of management as she was not provided with complete information earlier.
Q15Sampling Methods
0 marks easy
The Selection selection ensures that all items in the population or other each stratum have a known probability of selection. Random sampling includes how many sample methods. Explain.
Q15Random Sampling, Sample Selection Methods, and Stratificatio
0 marks easy
Explain random selection and stratified sampling techniques. Discuss the role of random number tables and the circumstances where stratified sampling is appropriate.
Q16Audit Sampling
0 marks hard
While planning the audit of S Ltd, you want to apply sampling techniques. What are the factors which you should keep in mind?
Q16Audit Sampling techniques and sampling risk (SA 530)
0 marks easy
Discuss the basis for the auditor's selection of sampling techniques and sampling risk.
Q17Analytical Procedures
0 marks easy
A planned procedure, performed in accordance with SA 530 identify fluctuations or inconsistencies which are unusual or do not agree with other relevant information. However, when expected values by a significant amount, the auditor shall investigate such differences.
Q17Analytical Procedures and Management Inquiry (SA 520)
0 marks easy
Explain the role of analytical procedures and management inquiry in audit procedures.
Q18Fraud - Auditor's Responsibilities
0 marks easy
Explain the provisions of 'Fraud and Related Wrongful Acts' that must be read by the statutory auditor of a company to obtain sufficient and appropriate audit evidence
Q19Financial Statement Audit
0 marks hard
While verifying the PFS of the client entity, the auditor also needs to consider whether the PFS has been valued appropriately and as per the applicable accepted accounting
Q20Analytical Procedures and Disclosures
0 marks hard
CA Saurabh is the statutory auditor of XYZ Ltd. for the FY 20-21. While verifying the portages made by XYZ Ltd., CA Saurabh decided to perform analytical procedures.
Q2.1Audit documentation and delegation of audit work
1 marks easy
Work relating to verification of revenue was assigned to Mohit in audit programme. However, it is being performed by Rohit actually. Verification of this transaction was Rishi due to last minute pressure issue. Which of the following statements is most appropriate in the regard relating to audit documentation?
(a) Audit programme and audit plan should be updated
(b) The partner while work assigned to one person is performed by another person
(c) Audit work was already prepared
(d) Changes in audit programme and notes clarifying the reason for assigned duty when a person not having part of engagement team is deputed to perform a duty. Otherwise, the issue of code drafting of team members is inevitable.
Q21Removal of Auditors
0 marks hard
XYZ Ltd. removed its statutory auditor by passing a resolution in the meeting of Board of Directors for its removal without obtaining prior approval of the Central Government. Such removal of auditor has resulted...
Q21Auditor Removal and Appointment under Section 140 and 139
4 marks easy
According to Section 140(1), the auditor appointed under section 139 may be removed from his office before the expiry of his term only by a special resolution of the company. State whether the following are special resolutions or not:
Q22Rotation of Auditors
0 marks hard
S People Limited has a paid-up share capital of ₹ 40 Crores and borrowings from bank of ₹ 60 Crores. As per P.A. Company was appointed as statutory auditors of the Company for one term of six consecutive years. Is the provision of rotation of auditors applicable to the company? Comment.
Q22Companies (Audit and Auditors) Rules, 2014
5 marks medium
As per rules prescribed in Companies (Audit and Auditors) Rules, 2014 for applicability of section 138, the classes of companies that mean the following auditor qualifications criteria exists one or more. State the classes of companies applicable for:
Q2.3Audit documentation for related party transactions
1 marks easy
Assets sold and party transactions, which of the following should not be part of audit documentation?
(a) Correspondence/representation letter in this regard
(b) Detail transaction list with asset wise segregation
(c) Documentation to show that such transactions are at arm's length basis
(d) Documentation to show that such transactions are at close length basis
Q23Audit Committee responsibilities
0 marks easy
The recommendation for appointment of auditors is one of the several functions performed by the Audit Committee. Discuss other key responsibilities of the Audit Committee in accordance with section 177 of the Companies Act, 2013.
Q23Audit Committee Responsibilities under Section 177
5 marks medium
Audit committee performs audit function. The recommendation for appointment of auditors is only one of the several functions performed by audit committee. Under section 177 of Companies Act, 2013, audit committee is responsible for following clauses. State all the responsibilities of audit committee:
Q24Auditor's report and management responsibilities
0 marks easy
The auditor's audit of management's responsibilities in the auditor's report includes reference to management's responsibilities as it helps to explain to users the purpose on which an audit is conducted. Explain.
Q24Management Responsibilities for Financial Statements
5 marks medium
Responsibilities of Management for the Financial Statements. The auditor's report shall contain a section with a heading 'Responsibilities of Management for the Financial Statements.' State the responsibilities of management as per the applicable standards:
Q25Qualitative aspects of misstatements and neutrality
0 marks easy
Considering the qualitative aspects of the entity's accounting practice, the auditor may conclude that there is an issue in management's judgments. The auditor may conclude that lack of neutrality together with uncorrected misstatements causes the financial statements to be materially misstated. Explain and analyze the implications of lack of neutrality.
Q26Bank audit - operating expenses
0 marks easy
Explain the audit approach you would follow to check the Operating Expenses of a Bank.
Q27Bank audit - internal controls
0 marks easy
Mr Rishabh, the Bank Manager develops controls to assist in managing key business and financial data. Discuss the various requirements for an effective and dynamic system.
Q28Government and local bodies audit
0 marks easy
(a) The audit of Government expenditure is one of the major components of Government audit. Briefly explain the basic standards set in relation to audit of Government expenditure. (b) State the important objectives of Local bodies Audit.