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 |
| Answer all the questions |
| Answer Question Nos.1 and 2 and any four from the rest. |
| Marks |
| 1. | As an auditor, comment on the following: | | |
| | (a) | Management of Invest Ltd. informed the auditor M/s AZ & Co. that Rs.40 Crores. is lying in Bank Fixed Deposits. M/s AZ & Co. relied upon management representation that Fixed Deposits Receipts worth Rs.24 Crores. are not available with the company since the same are pledged with the bank against borrowings. | 5 | (0) |
| | (b) | Sudarshan Ltd. sold investments costing Rs.12 lacs for Rs.15 lacs and paid commission to the broker @ 2%. Now they intend to adjust the profit of Rs.3,00,000 to capital reserves and commission of Rs.30,000 to the debit side of Profit and Loss account. | 5 | (0) |
| | (c) | At the beginning of the year, the company has a capital of Rs.15 crores, General Reserve of Rs.1 crore and Revaluation Reserve of Rs.6 crores. In the year 2007-08 under audit the company has incurred a loss of Rs.5.5 crores. The company proposes to adjust the loss against the Revaluation Reserves. | 4 | (0) |
| | (d) | Super Ltd. acquired a Truck valued at Rs.25.50 lacs on installment basis on 20th September, 2008. During the year, the company paid Rs.5 lacs as installments and provided depreciation on the same. | 4 | (0) |
| 2. | (a) | S & Co. Chartered Accountants have been appointed statutory auditors of XYZ Ltd. in place of M & Co. in the AGM. What steps and precautions S & Co. would take before commencement of the audit? | 5 | (0) |
| | (b) | A & Co. Chartered Accountants while auditing ABC Ltd. observe that huge purchases have been made from other entities under the same management. What are the responsibilities of A & Co.? | 5 | (0) |
| | (c) | ABC Ltd. has defaulted on term loan repayments to various Banks and Financial Institutions. What are the responsibilities of the auditors? | 4 | (0) |
| | (d) | ABC Ltd. has eroded its paid-up capital and reserves by more than 50%, but has made cash profit during the year under audit. What are the obligations of the auditors? | 4 | (0) |
| 3. | (a) | Examine the significance of Partnership Deed for the purposes of audit of a partnership firm. | 8 | (0) |
| | (b) | "Delegation of Financial Powers" needs to be gone through and understood before commencement of an audit of any entity. Explain. | 8 | (0) |
| 4. | How will you vouch/verify the following? | 4x4=16 | |
| | (a) | Bank Borrowings. | | (0) |
| | (b) | Advertisement Expenditure. | | (0) |
| | (c) | Remuneration paid to Directors. | | (0) |
| | (d) | Investment in the capital of a partnership firm. | | (0) |
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| 5. | (a) | As an internal auditor of Coal India Ltd., draft an audit programme for vouching/verification of transportation charges for despatches of coal from the mines. | 8 | (0) |
| | (b) | "Audit opinion is not an assurance as to the future viability of the enterprise or the efficiency or effectiveness with which management has conducted the affairs of the enterprise." Comment. | 8 | (0) |
| 6. | (a) | "The duties of auditors are limited to the verification of the arithmetical accuracy of the books of Accounts". Comment. | 8 | (0) |
| | (b) | An NGO is engaged in providing relief to flood victims in different parts of the country. It is making collection in cash (including cheques) and in kind. List out the steps for effective audit of the NGO. | 8 | (0) |
| 7. | (a) | "Planning and Quality control are key to effective and efficient audit." Examine the statement. | 8 | (0) |
| | (b) | A & Co. Chartered Accountants are the auditors of XYZ Ltd. The State Government has announced the state policy for banning the products being manufactured by XYZ Ltd. State the role of the Auditors. | 8 | (0) |
| 8. | Write short notes on any four of the following: | 4x4=16 | |
| | (a) | Documentation | | (0) |
| | (b) | Relying upon the work of Internal Auditor | | (0) |
| | (c) | Agreed upon procedures | | (0) |
| | (d) | Role of Accountant in compilation of financial statements | | (0) |
| | (e) | Materiality | | (0) |
| | (f) | Independence of the Auditor. | | (0) |
