Q1Audit terminology - Misstatements
2 marks easy
Persuasive is a term used, in the context of misstatements, to describe the effects on the financial statements of misstatements or the possible effects on the financial statement of misstatements, if any, that are detected by obtaining sufficient appropriate audit evidence.
Q1Audit findings and control deficiencies
2 marks easy
Audit findings and control deficiencies can be evaluated or assessed arbitrarily.
Q1Internal controls
2 marks easy
Inappropriate management can override internal controls of any organization.
Q1Audit planning
2 marks easy
Once the audit plan has been drafted and communicated, it is obligatory on the auditor to follow the same.
Q1CARO 2020 requirements
2 marks easy
According to CARO 2020, the company auditor is required to state that whether the title deeds of all immovable properties held in the name of the company are disclosed in its financial statements.
Q1SA 520 - Analytical procedures
2 marks easy
SA 520 deals with the auditor's use of analytical procedures as 'substantive procedures' ('substantive analytical procedures'), and as procedures near the end of the audit, that assist the auditor in preparation of the financial statements.
Q1Asset misappropriation
2 marks easy
Misappropriation of assets is often accompanied by false or misleading records or documents in order to conceal the fact that the assets are missing or have been pledged with proper authorization.
Q1Materiality in audit
2 marks easy
Materiality is not a matter of size.
Q2CARO 2020 applicability
4 marks medium
G Pvt Ltd. had fully paid up Capital and Reserves of ₹ 1,20 crore as at the end of F.Y 2020-2021. During the F.Y 2021-2022, business was interrupted due to Covid restrictions and due to the company recording losses to the tune of ₹ 25 lacs. During the year, the company also borrowed ₹ 55 lakh each from a bank and a financial institution independently. It had a turnover of ₹ 850 lakh with after-tax turnover of ₹ 250 lakh from discontinuing operations). Ascertain whether CARO, 2020 is applicable to the company.
Q2Analytical procedures - comparative analysis
4 marks medium
Tree Limited presented its financial statements for the F.Y. 2021-2022 to its auditor for expressing an opinion thereon. The auditor while carrying out the audit started comparing various items of profit and loss account of the year under audit with previous financial years. What is auditor trying to achieve by carrying out these comparisons?
Q2Audit objectives and SA compliance
3 marks medium
CA N is the auditor of SR Ltd. The auditor expressed his opinion on the financial statements without ascertaining as to whether the financial statements as a whole were free from misstatements or not. In your opinion, whether CA N has complied with objectives of audit considering the applicability of relevant SA?
Q2Drawing Power calculation - Cash Credit
3 marks medium
Compute the Drawing Power for Cash Credit A/c of S Limited for the month of March 2022 with following information: Stock ₹ 50,000; Debtors ₹ 45,000 (Including Debtor of ₹ 5,000 for an invoiced dated 17.11.2021); Sundry creditors ₹ 15,000; Sanctioned Limit ₹ 45,000; Margin on stock is 20% and on debtors is 50%. Note: Debtors older than 3 months are ineligible for calculation of DP
Q3Auditing - Inter-company transactions, CSR disclosure, Openi
0 marks hard
Case: P Ltd is a company from a business group 'ABCD' engaged in trading of garments with promoters and directors of other group companies. P Ltd entered into various inter-company transactions outside normal business during the year.
P Ltd is a company from a business group 'ABCD' and is engaged in trading of garments. The promoters of the company are promoters and directors of some other group companies also. You have been appointed as an auditor of P Ltd. P Ltd has entered into various inter-company transactions (within group companies) during the year which are outside its normal course of business.
Q4Auditing - Auditor responsibilities, Fraud detection, Legal
0 marks hard
Various scenarios related to auditor responsibilities and audit procedures
Q8(d)Accounting errors, error detection, trial balance
0 marks easy
The accountant of CHB Limited observed that amount received from Mr. A has been recorded in the account of Mr. B and this mistake was found at the time of tallying account statement provided by Mr. A. What type of error is this? Can you give two more examples of such error and how the same will be detected?