| Roll No………………… | |
| Total No. of Questions— 8] | [Total No. of Printed Pages—2 |
| Time Allowed : 3 Hours | Maximum Marks : 100 |
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| 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 | |
| (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 instalments of Rs. 26,650 each'. | 6 | |
| (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 | |
| (d) | A portion of Share Premium utilised to declare 40% dividend | 3 | |
| 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 | |
| (b) | The auditors were requested by the management to accept the draft minutes of Board, since the minutes book has been misplaced. | 3 | |
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| (c) | The Board of Directors removed to first auditors before the expiry of the term and appointed another auditor in his place. | 3 | |
| (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 | |
| (e) | No cast accounting records are maintained though the company is required to maintain the same. | 3 | |
| (f) | A Government company appointed the auditors and fixed the remuneration in its general meeting. | 3 | |
| 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 |
| (b) | Briefly explain the inherent limitations of audit. | 4 | |
| 4. | List the aspects to be considered in vouching/verification of the following | ||
| (a) | Research and Development expenditure | 4 | |
| (b) | Discounted bills received dishonoured. | 4 | |
| (c) | Borrowings from banks. | 4 | |
| (d) | Plant and Machinery | 4 | |
| 5. | (a) | What are the methods of obtaining audit evidence? | 8 |
| (b) | How would you proceed to check the misappropriation of cash in a trading concern? | 8 | |
| 6. | (a) | Explain in detail the duties of Comptroler and Auditor General of India. | 8 |
| (b) | Define the purpose of a `Letter of Engagement'. | 8 | |
| 7. | (a) | Mention any eight special points which you as an auditor would look into while auditing the books of a partnership firm. | 8 |
| (b) | What are the types of internal control in a computer-based system? | 8 | |
| 8. | Write short notes on the following: | ||
| (a) | Disclaimer of Opinion. | 4 | |
| (b) | Cut-off arrangement. | 4 | |
| (c) | Sweat Equity Shares. | 4 | |
| (d) | Disclosure of Accounting Policies. | 4 | |
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