| Roll No………………… | |
| Total No. of Questions— 8] | [Total No. of Printed Pages—3 |
| Time Allowed : 3 Hours | Maximum Marks : 100 |
| AS | |
| 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) | You are the Auditor of a Manufacturing Company, whose year ends on 31st March. An event occurred after the year ended, but before you complete the audit. The audit report issued by you is dated 20th July. The Sales Ledger balance at 31st March was Rs. 95,000. By 20th July Rs. 65,000 only had been received against this amount as full and final payment. | 4 | |
| (b) | AAS Ltd. is procuring the packing materials from M/s XY and Co., a partnership firm consisting of Mr. X and Mr. Y. Mr. Y is the Managing Director of AAS Ltd. The total value of purchases made from XY and Co. by AAS Ltd. during the year 2003-04 had been Rs. 38 lakhs. | 4 | |
| (c) | X Ltd. is good in profits, but suffers temporarily in liquidity. It proposes to declare dividend of 10% in annual general meeting, but the Board proposes to defer payment of dividend by two months from the date of annual general meeting by getting a resolution passed in AGM. | 4 | |
| (d) | A Computerised Machinery was purchased by two companies jointly. The price was shared equally. It was also agreed that they would use the machinery equally and show in their Balance Sheets, 50% of the value of the machinery and charge 50% of the depreciation in their respective books of accounts. | 4 | |
| AS | P.T.O. |
( 2 )
| AS | Marks |
| 2. | Give your comments on the following: | ||
| (a) | The auditor of a limited company has given a clean report on the financial statement on the basis of Xerox copies of the books of accounts, Vouchers and other records which were taken away by the Income-tax Department in search under section 132 of the I.T. Act, 1961. | 5 | |
| (b) | E and S were appointed as Joint Auditors of X and Y Ltd. What will be their professional responsibility in a case where the company has cleverly concealed certain transactions that escaped the notice of both the Auditors. | 5 | |
| (c) | Aakansha is a member of the Institute of Chartered Accountants of England and Wales. Is she qualified to be appointed as auditor of Indian companies? | 2 | |
| (d) | Preksha, a member of the ICAI, does not hold a Certificate of practice. Is her appointment as an auditor valid? | 4 | |
| (e) | 'B' owes Rs. 1001 to 'C' Ltd., of which he is an auditor. Is his appointment valid? Will it make any difference, if the advance is taken for meeting-out travelling expenses? | 4 | |
| 3. | (a) | What are the auditors' responsibilities for detection of frauds and Errors? | 8 |
| (b) | Explain the various types of companies under the Companies (Auditor's Report) Order, 2003. (CARO). | 8 | |
| 4. | How will you vouch/verify the following | ||
| (a) | Describe the salient features of Financial Administration of Local Bodies. | 8 | |
| (b) | What are accounting estimates according to Auditing and Assurance Standards —18 (AAS-18)? Give examples. | 8 | |
| 5. | How Will you vouch and /or verify the following? | ||
| (a) | Personal expenses of directors met by the company. | 4 | |
| (b) | Preliminary expenses | 4 | |
| (c) | Patents. | 4 | |
| (b) | Advances given to suppliers. | 4 | |
| 6. | What are the special steps involved in conducting the audit of an Educational Institution? | 16 | |
| AS | P.T.O. |
( 3 )
| AS | Marks |
| 7. | (a) | While conducting the audit of the accounts of manufacturing company, you discover that the rate of Gorss profit on Sales has sharply risen in comparison to the previous year. | 12 |
State the steps you would take to satisfy yourself. | |||
| (b) | State briefly the qualities of Auditors. | 4 | 8. | Write short notes on the following: |
| (a) | Analytical review | 4 | |
| (b) | Audit enquiry under Section 227(1A) | 4 | |
| (c) | Disclosure requirements of bank balances of a limited company. | 4 | |
| (d) | Audit trail in a computerised accounting environment. | 4 |
| AS |