This Paper has 26 answerable questions with 0 answered.
| Roll No…………………… | |
| Total No. of Questions— 8] | [Total No. of Printed Pages—2 |
| Time Allowed : 3 Hours | Maximum Marks : 100 |
Answers to questions are to be given only in English except in the cases 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 Questions 1 and 2 and any four from the rest. |
| Marks |
| 1. | As an auditor comment on the following situations/statements: | | |
| | (a) | The sale and purchases of investments of A Ltd., was controlled through a committee. Shri B sold some of the investments without discussing the same with the other members of the committee as they were out of station and Shri B believed that its price would fall and the company would suffer a loss if it is not sold. A Ltd. earned a profit of Rs. 1 lakh from such sale. | 6 | (0) |
| | (b) | The company due to liquidity crises sold leased back the same vehicles from leasing companies. In the notes to accounts, the company stated ‘Vehicles taken on lease repayable in 46 installments of Rs. 26,650 each’. | 6 | (0) |
| | (c) | No depreciation provided on a machinery costing Rs.50 lakhs imported three years back, since it is yet to be put into use. | 3 | (0) |
| | (d) | A portion of Share Premium utilised to declare 40% dividend | 3 | (0) |
| 2. | Give your comments on the following: | | |
| | (a) | M/s Verma and Sharma, Chartered Accountants were appointed as the first auditors of Good Luck Ltd. by virtue of their name being included as auditors in the Articles of Association | 3 | (0) |
| | (b) | The auditors were requested by the management to accept the draft minutes of Board, since the minutes book has been misplaced. | 3 | (0) |
| | (c) | The Board of Directors removed to first auditors before the expiry of the term and appointed another auditor in his place. | 3 | (0) |
| | (d) | The auditors are being insisted by the management to hand over the letters of confirmation of balances received by the auditor from debtors and creditors. | 3 | (0) |
| | (e) | No cast accounting records are maintained though the company is required to maintain the same. | 3 | (0) |
| | (f) | A Government company appointed the auditors and fixed the remuneration in its general meeting. | 3 | (0) |
| 3. | (a) | "The auditors should consider he effect of subsequent events on the financial statement and on auditors report" according to SAP 19 — Comment. | 12 | (0) |
| | (b) | Briefly explain the inherent limitations of audit. | 4 | (0) |
| 4. | List the aspects to be considered in vouching/verification of the following | | |
| | (a) | Research and Development expenditure | 4 | (0) |
| | (b) | Discounted bills received dishonored. | 4 | (0) |
| | (c) | Borrowings from banks. | 4 | (0) |
| | (d) | Plant and Machinery | 4 | (0) |
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| 5. | (a) | What are the methods of obtaining audit evidence? | 8 | (0) |
| | (b) | How would you proceed to check the misappropriation of cash in a trading concern? | 8 | (0) |
| 6. | (a) | Explain in detail the duties of Comptroller and Auditor General of India | 8 | (0) |
| | (b) | Define the purpose of a ‘Letter of Engagement’. | 8 | (0) |
| 7. | (a) | Mention any eight special points which you as an auditor would look into while auditing the books of a partnership firm. | 8 | (0) |
| | (b) | What are the types of internal control in a computer–based system? | 8 | (0) |
| 8. | Write short notes on the following: | | |
| | (a) | Disclaimer of Opinion. | 4 | (0) |
| | (b) | Cut–off arrangement. | 4 | (0) |
| | (c) | Sweat Equity Shares. | 4 | (0) |
| | (d) | Disclosure of Accounting Policies. | 4 | (0) |
