This Paper has 24 answerable questions with 1 answered.
| Time Allowed : 3 Hours | Full Marks : 100 |
| Answer Question No. 1 which is compulsory and any five from the rest. |
| Marks |
| 1. | (a) | Briefly comment on the following appointments. | | |
| | | (i) | Mr. Dasgupta, Chartered Accountant, is appointed as statutory auditor of X Ltd., in which two Government companies jointly hold 30% of the subscribed share capital. The appointment is through an ordinary resolution passed in the annual general meeting. | 3 | (0) |
| | | (ii) | Since the appointment of Mr. Narang as statutory auditor in an annual general meeting is hold to be void ab initio, the company holds another general meeting and appoints Mr. Bhar, through a special resolution. | 3 | (0) |
| | (b) | Briefly furnish your views in connection with the following: | | |
| | | (i) | Y Ltd has a branch office in a rural village, whose turnover for the year of audit is Rs. 3 lacs. The branch office was not audited. The company wants the statutory auditor not to refer to the branch, pointing out that in the earlier year’s report, there was no reference to the branch. | 3 | (0) |
| | | (ii) | Novel Smelters Ltd has entered into a contract with Bharat Towers Ltd for supply in December, 2003 of a cooking tower priced at Rs. 80 lacs against cash payment. The company has not provided for the same but has merely shown it in Notes to the Balance Sheet as on 31.3.2003. | 3 | (0) |
| | | (iii) | Board of Directors refuse to allow access to the Minute Books to the statutory auditor when he wants to refer them. | 3 | (0) |
| | (c) | Match each of the item in Column A with the appropriate item in Column B :– | Column I | | Column II | | (i) | Judgement formation in auditing | (i) | Section 228 of the Companies Act covers this area. | | (ii) | Right of auditor to attend general meeting | (ii) | Each joint auditor is responsible for the whole of audit. | | (iii) | Powers of the auditor when branch is audited by another | (iii) | Evaluation of the propositions of terms of materiality of significance. | | (iv) | In case of joint audit | (iv) | Rs. 5 lacs. | | (v) | Minimum paid-up capital for private companies. | (v) | Section 231 of the Companies Act controls the same. | | (vi) | Each joint auditor is responsible only for the work allowed to him. | | (vii) | Judging the audit risks. | | (viii) | Rs. 1 lac. | | (ix) | Right is conferred by S. 227 of the Companies Act. |
| 1x5=5 | (1) |
| 2. | (a) | When can special audit of a company be ordered by the Central Government? Discuss briefly the provisions governing special audit report. | 8 | (0) |
| | (b) | Distinguish between : | | |
| | | (i) | Qualified opinion and Disclaimer of opinion. | 4 | (0) |
| | | (ii) | Financial audit and Operational audit (any four areas). | 4 | (0) |
| 3. | (a) | How will you vouch/verify the following and what are the allied aspects to be considered? | 4x4=16 | |
| | | (i) | Royalty payments to a foreign collaborator, to whom royalty is payable as a percentage of sales : | | (0) |
| | | (ii) | Goodwill; | | (0) |
| | | (iii) | Contingent Liabilities; | | (0) |
| | | (iv) | Trade Creditors. | | (0) |
| 4. | (a) | When are summary reports of internal audit report submitted to top management? How should they be drafted? | 9 | (0) |
| | (b) | “The Import of hardware and software has brought forth changes in the conceptual approach to auditing”. Do you agree? What are the major phases in the audit of computerised accounts? | 7 | (0) |
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| 5. | (a) | What do you mean by Joint Audit? | 4 | (0) |
| | (b) | Discuss whether the liability of Joint Auditor is joint or several. | 12 | (0) |
| 6. | What are the special points that you would usually take into consideration in the audit of accounts of | 8+8 | |
| | (a) | Educational institution; | | (0) |
| | (b) | Public library. | | (0) |
| 7. | Discuss the purposes and potentialities of Cost Audit. | 16 | (0) |
| 8. | Write short notes on— | 4x4=16 | |
| | (a) | Disclosure of accounting policies; | | (0) |
| | (b) | Extraordinary items; | | (0) |
| | (c) | Impact of events occurring after Balance Sheet; | | (0) |
| | (d) | Restriction of the rights of statutory audit. | | (0) |
