Top 200+ Question – Nov 2020 (OLD & NEW Course)

 200+ Scientifically Selected SUPERMOST IMPORTANT QUESTIONS from data base of 3650+ Questions.

 Why so important?
 These questions are very important as these have been selected scientifically and not on the
basis of mere judgement. Following process formed the basis of selection: -
o 1st Step –
We selected those question which have been repeated for more than 7 times in our
database of 3650+ questions.

o 2nd Step -
Then we made a list of all question that were from
- MTP & RTP – 2018 & 2019 & 2020 (Except Nov 20 RTP & MTP)

o 3rd Step –
Questions identified in Step 1 + Step 2 were merged together, questions which were
asked in 2018 & 2019 Exams were deleted

This gave us 200+ questions which as per us are very important from viewpoint of MAY-2020 exams.
These questions are relevant for both old & new, but it doesn’t cover questions from Vouching,
Verification & EDP please cover pm questions for these chapters.

 Note
 SA wise approach to teach Inter / IPCC audit
There are 2 ways of teaching CA Inter Audit and both approaches are famous and followed by
many professors.
8 out of 13 chapters (new course) are based on standards on auditing same is case with old
course.
o 1st Approach is to teach SA wise and cover chapters along with it
o 2nd Approach is to teach chapters as framed by ICAI.
We follow 1st approach as it is more logical and concepts become easy to understand and apply,
we have used it for past 12 years and it has been giving rich dividends. Following SA chapter
mapping will make things easy for you and to correlate with ICAI module chapters

SA
Chapter Number & Name (New Course) Which SAs & Chapters as per Our Notes ?
Based ?
Chapter 1: SA 200 / SA 210 / SA 220 & SQC 1 / SA Intro
Yes / Concepts on Auditing
Nature, Objective and Scope of Audit
Chapter 2: Yes SA 220 & SQC 1 / SA 300 / SA 315 / SA 320
Audit Strategy, Audit Planning and Audit / ASPP
Programme
Chapter 3: SA 230 / SA 330 / SA 500 / SA 501 /SA
Audit Documentation and Audit Evidence Yes 505/SA 510/SA 550 / SA 560/ SA 570 / SA
580/ Concepts on Auditing
Chapter 4: SA 315 / SA 320 / SA 330 / SA 610 / Internal
Risk Assessment and Internal Control Control System /Co Audit / Concepts on
Yes
Auditing
Chapter 5:
Yes SA 240 / Co Audit
Fraud and Responsibilities of the Auditor
in this Regard
Chapter 6:
No AAE
Audit in an Automated Environment
Chapter 7: Yes SA 530
Audit Sampling
Chapter 8: Yes SA 520
Analytical Procedures
Chapter 9:
No AIFS
Audit of Items of Financial Statements
Chapter 10: No Co Audit I / SA 299 / SA 705
The Company Audit
Chapter 11: Yes SA 700/ SA 701/ SA 705/ SA 706
Audit Report
Chapter 12: No AUDIT OF BANK
Audit of Banks
Chapter 13: Audit of Different Entities / Govt Audit/ Co-
Audit of Different Types of Entities No
Operative Society Audit

 Students who have PARAM Question Bank

o With the ULTIMATE -ALL IN ONE “PARAM QUESTION BANK” students already will get a edge as
these questions are already covered in PARAM , student just have to go through the CNO’s
given in the attached file .
o Students can just mark the CNO’s while studying from PARAM and use these top 150 question
for last minute revision.
o We believe that the Appropriate Headings, Breakup of Answer, Rearranging the flow of answers
, Shortcuts , Examples and Author’s note for contradictory and tricky answers given in PARAM
would make your reading easy and fast.
 Students who do not have ULTIMATE -ALL IN ONE “PARAM Question Bank”
o Don’t worry you can get soft copy from our telegram channel “Auditguru” see pinned message.

 Visit our telegram channel “Auditguru” for further updates, amendments or doubts solving.
 You can also download the “auditguru” app from playstore.

WISH YOU ALL THE BEST FOR YOUR NOV 2020 EXAMS.
 Old / Repetat
CNO Topics Concept Headings Questions
New ions
“The purpose of an audit is to enhance the degree of confidence of intended users in the financial statements.
Overall Objective & Purpose- This is achieved by the expression of an opinion by the auditor on whether the financial statements are prepared,
200.01 SA 200 Both 7
Auditor doing audit of FST in all material respects, in accordance with an applicable financial reporting framework.”. Explain stating the
objectives of audit as per SA 200.
Absolute VS Reasonable Distinguish between absolute and reasonable assurance. Identify the type of assurance that is expected in an
200.03 SA 200 Both 2
Assurance audit of the financial statements, clearly outlining the reasons to justify your point of view.
Inherent limitations of Audit-
200.09 SA 200 Both 7 The process of auditing is such that it suffers from certain limitations Discuss.
Master Answer
Timeliness of Financial The matter of difficulty, time, or cost involved is not in itself a valid basis for the auditor to omit an audit
200.15 SA 200 Both 1 Reporting and the Balance procedure for which there is no alternative or to be satisfied with audit evidence that is less than persuasive.
between Benefit and Cost Explain.
Inherent Limitations of an
In case of certain subject matters, limitations on the auditor’s ability to detect material misstatements are
200.18 SA 200 Both 1 auditor’s ability to detect MMST
particularly significant. Explain such assertions or subject matters.
in certain areas
Relevant ethical requirements ordinarily comprise the Code of Ethics for Professional Accountants (IESBA Code)
Ethical Requirements-
200.19 SA 200 Both 3 related to an audit of financial statements. Discuss with reference to those fundamental principles of professional
Fundamental Principles
ethics.
Prerequisites or fundamental In order to achieve the objectives of the accountancy profession, professional accountants have to observe a
200.21 SA 200 Both 2
principles number of prerequisites or fundamental principles Explain
Engagement Letter - Master
210.03 SA 210 Both 3 State the purpose of a ‘Letter of Engagement’.
Answer-Purpose & Contents
“It is not mandatory to send a new engagement letter in recurring audit, but sometimes it becomes mandatory to
210.05 SA 210 Both 4 Revision of Engagement Letter
send new letter”. Explain those situations where new engagement letter is to be sent.
Quality Control element (In The firm’s system of quality control should include policies and procedures addressing each and
220.01 SA 220 Both 1
short) every element of system of quality control. State those elements.
Acceptance & Continuance-
“The auditor should obtain information considered necessary in the circumstances before accepting an
Information assists the auditor-
220.06 SA 220 Both 7 engagement with a new client.” Explain. Also mention any four information which assists the auditor in accepting
accepting and continuing
and continuing of relationship with the client as per SA 220.
relationship with the client
The firm should establish policies and procedures designed to provide it with reasonable assurance that the
monitoring compliance with policies and procedures relating to the system of quality control are relevant, adequate, operating effectively and
220.08 SA 220 Both 1 quality control policiesand complied with in practice. Such policies and procedures should include an ongoing consideration and evaluation
procedures - Purpose of the firm’s system of quality control, including a periodic inspection of a selection of completed engagements.
Explain in the above context the purpose of monitoring compliance with quality control policies and procedures.
Audit Documentation- Master Audit documentation provides evidence of the auditor’s basis for a conclusion about the achievement of the
230.01 SA 230 Both 8 Answer-Meaning, Nature and overall objectives of the auditor and evidence that the audit was planned and performed in accordance with SAs
Purpose and applicable legal and regulatory requirements. Explain stating clearly purpose of audit documentation.
Working Papers (Master
Audit Working Papers are the record of audit procedures performed, relevant audit evidence obtained, and
230.03 SA 230 Both 7 Answer) -Importance/Purpose/
conclusions the auditor reached. Explain stating meaning and advantages of working papers.
Advantages
 Audit documentation summary may facilitate effective and efficient reviews and inspections of the audit
230.17 SA 230 Both 1 Audit Documentation Summary documentation, particularly for large and complex audits. Explain.

Judging the Significance of a Judging the significance of a matter requires an objective analysis of the facts and circumstances. Documentation
230.19 SA 230 Both 1 Matter & Which is important for of the professional judgments made, where significant, serves to explain the auditor’s conclusions and to
Documentation reinforce the quality of the judgment. Explain with the help of examples.
Although fraud is a broad legal concept, for the purposes of the SAs, the auditor is concerned with fraud that
240.01 SA 240 Both 2 Definition & Types of Fraud
causes a material misstatement in the financial statements. Explain.
“Fraudulent financial reporting involves intentional misstatements including omissions of amounts or disclosures
240.03 SA 240 Both 8 Fraudulent Financial Reporting
in financial statements to deceive financial statement users." Discuss.
Detection of manipulation of accounts with a view to presenting a false state of affairs is a task requiring great
240.05 SA 240 Both 1 Manipulation of Accounts
tact and intelligence. Explain stating clearly how this type of fraud is generally committed.
Misappropriation Difficult to
240.07 SA 240 Both 4 “Fraud in the form of misappropriation of goods is still more difficult to detect.” Explain.
Detect
Fraud Risk Factors Fraud, whether fraudulent financial reporting or misappropriation of assets, involves incentive or pressure to
240.09 SA 240 Both 4
commit fraud, a perceived opportunity to do so and some rationalization of the act. Explain with examples
Discrepancies in the accounting records, including transactions that are not recorded in a complete or timely
Fraud Indicators -- Discrepancies manner or are improperly recorded as to amount, accounting period, classification, or entity policy is one of the
240.12 SA 240 Both 1
in the accounting records example of circumstances that indicate the
possibility of fraud. Explain at least four other such examples relating to discrepancies in the accounting records.
Exceptional Cirmcumstances- Explain how would you deal as an auditor if, as a result of a misstatement resulting from fraud or suspected fraud,
240.21 SA 240 Both 2
Challenging Ability to Continue you encounter exceptional circumstances that bring into question your ability to continue performing the audit.
240.25 SA 240 Both 2 Defalcation of Cash- Ways Discuss the different ways in which defalcation of cash may take place.
250.01 SA 250 Both 8 Indicators of Non Compilance Matters indicating auditor about non-compliance of laws & regulations by management
Joint Audit-Advantages-
299.01 SA 299 Both 3 Explain the concept of joint audit. Discuss its advantage and disadvantage.
Disadvantages
"Before the commencement of audit, the joint auditors should discuss and develop a joint audit plan." Discuss the
299.03 SA 299 Both 1 Developing Joint Audit Plan
points to be considered in developing the joint audit plan by the joint auditors.
Responsibility- Co-ordination
299.05 SA 299 Both 7 between Joint Auditors- Master In Joint Audit, Each Joint Auditor is responsible only for the work allocated to him.
Answer
ASPP & Overall Audit Plan- Factors for M & Co. was appointed as auditor of IGI Ltd. As an auditor what are the factors that would be considered in the
300.01 Both 2
SA 300 Developments development of overall audit plan?
ASPP & Factors for establishing Overall
300.03 Both 4 Discuss the factors the auditor will consider while establishing the overall strategy.
SA 300 Audit Strategy
ASPP & Overall Audit Strategy -- For The auditor T of Hand Fab Ltd is worried as to management of key resources to be employed to conduct audit.
300.07 Both 3
SA 300 Resources Management Required How the audit strategy would be helpful to the auditor?
ASPP & Audit Planning -- Not a Discrete
300.11 Both 4 Planning is not a discrete phase of an audit, but rather a continual and iterative process. Discuss.
SA 300 Phase
ASPP & Overall Audit Strategy--
300.15 Both 2 The establishment of the overall audit strategy and the detailed audit plan are closely inter-related. Explain.
SA 300 Relationship with Audit Plan
 ASPP & Modification of the overall As a result of unexpected events, changes in conditions, or the audit evidence obtained from the results of audit
300.17 Both 1
SA 300 audit strategy and audit plan procedures, the auditor may need to modify the overall audit strategy and audit plan. Explain.
The utility of the audit programme can be retained and enhanced only by keeping the programme and also the
ASPP &
300.25 Both 2 Audit Program (Periodic Review) client’s operations and internal control under periodic review so that inadequacies or redundancies of the
SA 300
programme may be removed Discuss stating clearly the advantages of an audit programme.
ASPP & The auditor shall document the overall audit strategy, the audit plan, and any significant changes made during the
300.27 Both 1 Audit Plan (Documentation)
SA 300 audit engagement to the overall audit strategy or the audit plan, and the reasons for such changes. Explain.
The nature, timing and extent of the direction and supervision of engagement team members and review of their
ASPP &
300.29 Both 1 Planning for DSR work vary depending on many factors. Explain.
SA 300
The assessment of risks is a matter of professional judgment. Explain stating clearly what is not included in Audit
315.05 SA 315 Both 1 RMM & Audit Risk- Exclusion
Risk?
In performing an audit of financial statements, the auditor should have or obtain knowledge of the business.
Understanding Entity & its
315.07 SA 315 Both 7 Explain in the light of SA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding
Environment
the Entity and its Environment.
Knowledge of the Client’s business is one of the important principles in developing an overall audit plan. In fact
without adequate knowledge of client’s business, a
Understanding Entity & its
proper audit is not possible. As per SA-315, “Identifying and Assessing the Risk of Material Misstatement through
Environment – Examples of
315.08 SA 315 Both 1 Understanding the Entity and Its Environment”, the
types of understanding to be
auditor shall obtain an understanding of the relevant industry, regulatory and other external factors including the
obtained
applicable financial reporting framework. Substantiate
with the help of examples.
The auditor of ABC Textiles Ltd chalks out an audit plan without understanding the entity’s business. Since he has
Need for Understanding Entity &
315.09 SA 315 Both 1 carried out many audits of textile companies, there is no need to understand the nature of business of ABC Ltd.
its Environment
Advise the auditor how he should proceed.
Combined assessment of the The SAs do not ordinarily refer to inherent risk and control risk separately, but rather to a combined assessment
315.13 SA 315 Both 2
“risks of material misstatement of the “risks of material misstatement”. Explain.
The auditor shall identify and assess the risks of material misstatement at both levels to provide a basis for
Identify & Assess Risk of designing and performing further audit procedures. For the purpose of Identifying and assessing the risks of
315.15 SA 315 Both 1
Material Misstatement material misstatement the auditor shall Identify risks, assess the identified risks, relate the identified risks and
consider the likelihood of misstatement. Explain the above in detail.
Companies prepare their financial statements in accordance with the framework of generally accepted accounting
principles (Indian GAAP), also commonly referred to as accounting standards (AS). In preparing financial
statements, Company’s management makes implicit or explicit claims (i.e. assertions) regarding assets, liabilities,
315.16 SA 315 Both 1 Assertions-Brief
equity, income, expenses and disclosures in accordance with the applicable accounting standards. Explain with
example stating the relevant assertions involved in this regard.
Also explain financial statement audit.
What does the Valuation assertion mean in respect of Assets, liabilities and equity balances? Explain with the help
315.17 SA 315 Both 14 Assertions
of example in respect of Inventory.
As part of the risk assessment, the auditor shall determine whether any of the risks identified are, in the auditor’s
315.25 SA 315 Both 9 Significant Risk judgment, a significant risk. In exercising judgment as to which risks are significant risks, state the factors which
shall be considered by the auditor. Explain the above in context of SA-315.
 Internal control over safeguarding of assets against unauthorised acquisition, use, or disposition may include
Internal Controls Definition
315.27 SA 315 Both 1 controls relating to both financial reporting and operations
,Objectives & Purpose
objectives. Explain stating clearly the objectives of Internal Control.
Discuss what is included in risk assessment procedures to obtain audit evidence about the design and
315.31 SA 315 Both 4 Risk Assessment
implementation of relevant controls.
320.01 SA 320 Both 7 Materiality Concept of ‘Materiality’.
Materiality for the financial statements as a whole may need to be revised as a result of a change
320.07 SA 320 Both 2 Revision of Materiality
in circumstances that occurred during the audit. Explain wi th the help of example.
TOC & Preliminary Risk Based on the results of the tests of control, the auditor should evaluate whether the internal controls are
330.11 SA 330 Both 2
Assessment of Controls designed and operating as contemplated in the preliminary assessment of control risk. Analyse and Explain.
Specific inquiries by auditor
The auditor R of GR and Co., a firm of Chartered Accountants is conducting audit of B Industries Ltd. State the
330.13 SA 330 Both 3 when deviations from controls
specific inquiries by auditor when when deviations from controls are detected
are detected
Audit evidence includes both information contained in the accounting records underlying the financial statements
500.01 SA 500 Both 7 Audit Evidence
and other information. Discuss
Audit Evidence- Related Audit evidence is necessary to support the auditor’s opinion and report. It is cumulative in nature and is primarily
500.03 SA 500 Both 2 Matters/Features/ obtained from audit procedures performed during the course of the audit. Most of the auditor’s work in forming
charectoristics the auditor’s opinion consists of obtaining and evaluating audit evidence. Explain
“Even when information to be used as audit evidence is obtained from sources external to the entity,
500.09 SA 500 Both 12 Factors affecting reliability
circumstances may exist that could affect its reliability”. Explain. Also state generalisations about the reliability of
Evaluating work of “The management has obtained a certificate from an actuary regarding provision of gratuity payable to
500.13 SA 500 Both 6
Management's Expert employees”. Comment as an auditor.
ABC Ltd is engaged in manufacturing of different type of yarns. On going through its financial statements for the
Inventory-Physical Verification past years, it is observed that inventory is material to the financial statements. You as an auditor of the company
501.05 SA 501 Both 7
by auditor- Master Answer wanted to obtain sufficient appropriate audit evidence regarding the existence and condition of the inventory as
appearing in the financial statements. Discuss, how would you proceed as an auditor.
Matter Relavant For Planning of
501.09 SA 501 Both 1 Briefly mention the matters that are relevant in planning attendance at physical inventory counting.
Attending Physical Verification
Pride India Ltd is a manufacturer of various FMCG (fast moving consumable goods) range of products. The
company is having several cases of litigation pending in courts. The auditor wanted to identify litigation and
Identification of risk of MMST
501.11 SA 501 Both 1 claims resulting to risk of material misstatements.
for pending litigation and claims
Required
Suggest the auditor with reference to SAs.
Timeliness of Financial The matter of difficulty, time, or cost involved is not in itself a valid basis for the auditor to omit an audit
501.13 SA 501 Both 1 Reporting and the Balance procedure for which there is no alternative or to be satisfied with audit evidence that is less than persuasive.
between Benefit and Cost Explain.
External Confirmation- Examples-External confirmation procedures frequently are relevant when addressing assertions associated with account
505.03 SA 505 Both 7
Area balances and their elements, but need not be restricted to these items. Explain.
 Define the following :
Overview of external (i) Positive confirmation request
505.04 SA 505 Both 1 confirmation-Types /Non (ii) Negative confirmation request
Response/Exception (iii) Non-response
(iv) Exception
External Confirmation-
505.05 SA 505 Both 1 Discuss external confirmation procedure as per SA-505.
Procedure
Analytical Procedures- Master Analytical procedures use comparisons and relationships to assess whether account balances or other data
520.01 SA 520 Both 8
Answer appear reasonable. Explain stating the purpose of analytical procedures with examples.
Substantive Analytical
520.03 SA 520 Both 5 Discuss the techniques available as Substantive Analytical Procedures.
Procedures- Techniques
When designing and performing substantive analytical procedures, either alone or in combination with tests of
Determining suitability of details, as substantive procedures in accordance with
520.04 SA 520 Both 1 particular substantive analytical SA 330, the auditor shall determine the suitability of particular substantive analytical procedures for given
procedures assertions, taking account of the assessed risks of material misstatement and tests of details, if any, for these
assertions. Explain the other relevant points in this context.
Analytical Procedures- Factor Substantive analytical procedures are generally more applicable to large volumes of transactions that tend to be
520.05 SA 520 Both 2
affecting Suitability- Volume predictable over time. Explain.
If analytical procedures performed in accordance with SA 520 identify fluctuations or relationships that are
Analytical Procedures
520.09 SA 520 Both 1 inconsistent with other relevant information or that differ from expected values by a significant amount, explain
(Investigating results)
how would the auditor investigate such differences.
The auditor is faced with sampling risk in both tests of control and substantive procedures. Comment on this
530.01 SA 530 Both 7 Sampling Risk
statement with reference to SA 530 on Audit Sampling.
The level of sampling risk that the auditor is willing to accept affects the sample size required. The lower the risk
530.05 SA 530 Both 3 Factor effecting Sample size the auditor is willing to accept, the greater the sample size will need to be. Explain Stating the examples of factors
that the auditor may consider when determining the sample size for tests of controls.
Statistical and Non Statistical Whatever may be the approach non-statistical or statistical sampling, the sample must be representative. Discuss
530.07 SA 530 Both 1
Sampling explaining Statistical and Non Statistical sampling approaches.
Methods of Sampling- Master Explain the sampling method which involves selection of a block(s) of contiguous items from within the
530.11 SA 530 Both 12
Answer population. Also give example.
Selection has been done on a In cases where audit sample selection has been done on a random basis, no statistical process for selection of
530.13 SA 530 Both 4
random basis samples needs to be followed.
Projecting Misstatements for The auditor is required to project misstatements for the population to obtain a broad view of the scale of
530.15 SA 530 Both 1
Population misstatement but this projection may not be sufficient to determine an amount to be recorded. Explain
The auditor shall evaluate the results of the sample and whether the use of audit sampling has provided a
530.17 SA 530 Both 1 Evaluating Resuts of Sampling
reasonable basis for conclusions about the population that has been tested. Analyse and explain.
XYZ Ltd is engaged in trading of electronic goods and having huge accounts receivables. For
analysing the whole accounts receivables, auditor wanted to use sampling technique. In
Stratified sampling and Value considering the characteristics of the population from which the sample will be drawn, the auditor
530.19 SA 530 Both 2
weighted Sampling determines that stratification or value-weighted selection technique is appropriate. SA 530 provides
guidance to the auditor on the use of stratification and value-weighted sampling techniques. Advise
the audit or in accordance with SA 530.
 Extent of Checking On a
530.21 SA 530 Both 2 Discuss the factors that should be considered for deciding upon the extent of checking on a sampling plan.
Sampling Basis
Sampling- Traditional Approach There is a growing realisation that the traditional approach to audit is economically wasteful because all efforts
530.23 SA 530 Both 1
Extensive Checking – All Entities are directed to check all transactions without exception. Explain
The nature of related party relationships and transactions may, in some circumstances, give rise to higher risks of
Situation when RPT will lead to
550.02 SA 550 Both 1 material misstatement of the financial statements than transactions with unrelated parties. Explain with the help
higher RMM
of at least three examples.
There are specific accounting and disclosure requirements for related party relationships, transactions and
550.03 SA 550 Both 1 Responsibilty of Auditor balances to enable users of the financial statements to understand their nature and effects on the financial
statements. Analyse and explain stating the responsibility of auditor in this regard.
Transactions outside normal What auditor shall do after the identification of significant related party transactions outside the entity’s normal
550.05 SA 550 Both 5
course of business course of business?
Mr. D is a director of X Ltd. and Y Ltd. On 30th June, 2015, Mr. D resigned from directorship of Y Ltd. X Ltd. sold
Disclosure of related party in
550.07 SA 550 Both 3 goods to Y Ltd., during the entire year at the same price and conditions as to any other customer. X Ltd. discloses
notes to accounts
only the sales for the first quarter ending 30th June, 2015 as related party transactions.
Auditor Responsibility - Events
occurring between the date of “The auditors should consider the effect of subsequent events on the financial statement and on
560.03 SA 560 Both 8
the financial statements and the auditor’s report”– Comment according to SA 560.
date of the auditor’s report
Auditor’s Obligation - Facts
The auditor has no obligation to perform any audit procedures regarding the financial statements after the date
which become known to the
of the auditor’s report. However, when, after the date of the auditor’s report but before the date the financial
auditor after the date of the
560.06 SA 560 Both 1 statements are issued, a fact becomes known to the auditor that, had it been known to the auditor at the date of
auditor’s report but before the
the auditor’s report, may have caused the auditor to amend the auditor’s report.
date the financial statements
Explain the auditor’s obligation in the above situation.
are issued
Objectives of Auditor Regarding On the basis of which assumption the financial statements of a company are prepared. Explain. Also describe the
570.01 SA 570 Both 2
Going Concern objectives of the auditor regarding going concern.
Events & Conditions Creating
570.03 SA 570 Both 5 "Operating Conditions" that may cast doubt about going concern assumption.
Significant Doubt
Audit evidence is all the information used by the auditor in arriving at the conclusions on which the audit opinion
Written Representation - not
is based. Written representations are necessary
substitute to audit evidence and
580.05 SA 580 Both 6 information that the auditor requires in connection with the audit of the entity’s financial statements.
Objective of Written
Accordingly, similar to responses to inquiries, written representations are audit evidence. Explain stating clearly
Representation
objectives of the auditor regarding written representation.
Audit evidence is all the information used by the auditor in arriving at the conclusions on which the audit opinion
Written Representation - not
is based. Written representations are necessary
substitute to audit evidence and
580.05 SA 580 Both 6 information that the auditor requires in connection with the audit of the entity’s financial statements.
Objective of Written
Accordingly, similar to responses to inquiries, written representations are audit evidence. Explain stating clearly
Representation
objectives of the auditor regarding written representation.
Internal audit-Meaning , scope,
610.01 SA 610 Both 2 Explain the activities of the Internal Audit function.
objectives
 In order to form the audit opinion as required by SA 700, the auditor shall conclude as to whether the auditor has
obtained reasonable assurance about whether the financial statements as a whole are free from material
700.03 SA 700 Both 2 Objectives & Framing Opinon
misstatement, whether due to fraud or error. Explain the conclusions that the auditor shall take into account. Also
explain the objective of auditor as per SA 700.
The Auditor is fully satisfied with the audit of an entity in respect of its systems and procedures and wants to issue
700.07 SA 700 Both 4 Unqualified Opinion
a report without any hesitation. What type of opinion can be give and state give reasoning.
The first section of the auditor’s report shall include the auditor’s opinion, and shall have the heading “Opinion.”
700.11 SA 700 Both 2 Basis for Opinion Para The Opinion section of the auditor’s report shall also Identify the entity whose financial statements have been
audited. Apart from the above, explain the other relevant points to be included in opinion section.
Auditors Report - Management The auditor’s report shall include a section with a heading “Responsibilities of Management for the Financial
700.13 SA 700 Both 3 Responsibilities for the Financial Statements.” SA 200 explains the premise, relating to the responsibilities of management and, where appropriate,
Statements those charged with governance, on which an audit in accordance with SAs is conducted. Explain
The auditor evaluated, in respect of T Ltd., whether the financial statements are prepared in accordance with the
requirements of the applicable financial reporting framework.
Qualitative Aspects of
700.17 SA 700 Both 1 Auditor’s evaluation included consideration of the qualitative aspects of the entity’s accounting practices,
accounting Practices
including indicators of possible bias in management’s judgments.
Advise the qualitative aspects of the entity’s accounting practices.
Communicating Key Audit Matter is not a substitute for disclosure in the Financial Statements rather
Is KAM substitute of Disclosure
701.03 SA 701 Both 2 Communicating key audit matters in the auditor’s report is in the context of the Auditor having formed an opinion
in FST
on the financial statements as a whole. Analyse.
706.01 SA 706 Both 4 EMP- Master Answer Define Emphasis of Matter Paragraph and how it should be disclosed in the Independent Auditor's Report?
The nature of the comparative information that is presented in an entity’s financial statements depends on the
requirements of the applicable financial reporting framework. There are two different broad approaches to the
Definition of Comparative, 2
710.03 SA 710 Both 1 auditor’s reporting responsibilities in respect of such comparative information: corresponding figures and
Approaches & Differences
comparative financial statements. Explain clearly stating the essential audit reporting differences between the
approaches. Also define comparative information and audit procedures regarding comparative information.
Reference to Comparatives in When corresponding figures are presented, the auditor’s opinion shall not refer to the corresponding figures
710.05 SA 710 Both 2
Corresponding Figures Approach except in some circumstances. Explain those circumstances.
Automated Environments
AAE.01 AAE New 1 Explain the meaning of automated environment. Also discuss the key features of an automated environment.
(Meaning and Key Features)
Principals of Automated The fundamental principle of an automated environment is the ability to carry out business with less manual
AAE.05 AAE New 2
Environment intervention and more system driven.
With respect to audit in an automated environment, explain the following: (any four)
(i) CAATs
Important IT related terms in (ii) Data Analytics
AAE.07 AAE New 1
brief (iii) Database
(iv) Information Systems
(v) Privileged access
Briefly mention three reasons why IT should be considered relevant to an audit of financial statements.
AAE.10 AAE New 3 Relevance of IT
Describe how risks in IT systems, if not mitigated, could have an impact on audit
AAE.25 AAE New 2 IT Risks (Impact)
 Testing Methods in Automated
AAE.35 AAE New 3 Explain some of the commonly used methods for testing in an automated environment.
Environment
Data analytics can be used in testing of electronic records and data residing in IT systems using spreadsheets and
specialised audit tools viz., IDEA and ACL to perform check
AAE.40 AAE New 1 Uses of Data Analytics
completeness of data and population that is used in either test of controls or substantive audit tests. Explain in
detail stating all the relevant points.
ADE.01 ADE Both 14 Audit of Hospital- Special Points Advise any five special points in an audit of hospital.
Audit of Educational Institute-
ADE.15 ADE Both 14 Mention any eight special steps involved in conducting the audit of an Educational Institution?
Special Points
Cinescreen Multiplex Ltd. is operating cinemas in different locations in Mumbai and has appointed you as an
ADE.35 ADE Both 3 Audit of Cinema Hall
internal auditor. What are the areas that need to be verified in relation to receipts from sale of Tickets ?
Audit of Cinema Hall-audit
ADE.40 ADE Both 2 programme IF Owned by a Draft an audit programme to audit the receipts of a cinema theatre owned by a partnership firm.
partnership firm.
Draft an Audit Programme to audit the accounts of a Recreation Club with facilities for indoor games and in-house
ADE.45 ADE Both 4 Audit of Club-Special Points
eating.
Audit of Partnership Firm-
ADE.55 ADE Both 7 Discuss the matters which should be specially considered in the audit of accounts of a partnership.
Special Points
Audit of Partnership Firm
ADE.60 ADE Both 3 State six important advantages of audit of accounts of a Partnership firm.
(Advantages)
Audit of Partnership Firm-
What special steps will you take into consideration in auditing the receipts from entry fees of an amusement
ADE.65 ADE Both 3 Receipts from entry fees of an
park? Mention any four points specific to the issue.
amusement park
An NGO operating in Delhi had collected large scale donations for Tsunami victims. The donations so collected
were sent to different NGOs operating in Tamil Nadu for relief operations. This NGO operating in Delhi has
Audit of an NGO (Receipts & appointed you to audit its accounts for the year in which it collected and remitted donations for Tsunami victims.
ADE.75 ADE Both 9
Remittances to Others) Draft audit programme for audit of receipts of donations and remittance of the collected amount to different
NGOs. Mention six points each, peculiar to the situation, which you will like to incorporate in your audit
programme for audit of said receipts and remittances of donations.
ADE.85 ADE Both 7 Assets on HP Machinery acquired under Hire-purchase system
AIFS.01 AIFS New 3 B/S (Capital Subsidy) Receipt of Capital subsidy
ABC Ltd. issued shares to its equity shareholders in the proportion of one bonus share for every four existing
AIFS.07 AIFS New 6 BS (Share Capital, Bonus Shares)
shares. As an auditor of the company, how would you verify this issue?
Any share issued by a company at a discounted price shall be void. Explain stating also the audit procedure in this
AIFS.11 AIFS New 11 B/S (Shares at Discount)
regard.
The securities premium account may only be applied by the company towards the issue of unissued shares of the
AIFS.13 AIFS New 8 BS (Securities Premium)
company to the members of the company as fully paid bonus shares. Comment.
BS (Share Capital, Spliting of
AIFS.15 AIFS New 4 Splitting of one share of the face value of Rs 10 into 10 shares of Rs 1 each.
Shares)
Discuss the provisions of the Companies Act, 2013 with regard to issue of Sweat Equity Shares and auditor’s duty
AIFS.17 AIFS New 7 BS (Sweat Equity Shares)
in this regard.
 B/S( Reserve vs Provision &
AIFS.19 AIFS New 5 Distinguish between Reserves and Provisions.
Capital vs Revenue Reserve)
AIFS.21 AIFS New 3 B/S( Audit of Capital Reserve) Audit of Capital Reserve.
On going through the financial statements of ABC Ltd, its auditors Deepa Raj and Associates observed that
company has taken Loans from banks and financial institutions. Further, the audit team discusses the following
about Liabilities: “Liabilities are the financial obligations of an
enterprise other than owners’ funds. Liabilities include loans/ borrowings, trade payables and other current
AIFS.23 AIFS New 2 B/S (Borrowings Existence) liabilities, deferred payment credits and provisions.
Verification of liabilities is as important as that of assets, for, if any liability is omitted (or understated) or over
stated, the Balance Sheet would not show a true and fair view of the state of affairs of the company.”
Advise stating clearly the audit procedures generally required to be undertaken for verification of existence of
Borrowings.
AIFS.25 AIFS New 4 B/S (Borrowing) Borrowing from Banks.
Verification of liabilities is as important as that of assets, considering if any liability is omitted (or understated) or
B/S (Criteria for Classification as
AIFS.27 AIFS New 1 overstated, the Balance Sheet would not show a true and fair view of the state of affairs of the entity. Explain
Current Liability)
stating also criteria for a liability to be classified as current liability.
Liabilities include trade payables and other current liabilities, deferred payment credits and provisions.
Verification of liabilities is as important as that of assets, considering if any liability is omitted (or understated) or
AIFS.29 AIFS New 1 B/S (Trade Payable Existence)
overstated, the Balance Sheet would not show a true and fair view of the state of affairs of the entity. Advise
stating clearly the audit procedure to establish the existence of trade payables and other current liabilities as at
B/S (Intagible Fixed Assets, Explain with examples the audit procedure to establish the existence of intangible fixed assets as at the period-
AIFS.35 AIFS New 2
Existence) end.
“Trade receivable are an essential part of any organisation's balance sheet. Often referred to as debtors, these are
B/S (Trade Receivables, monies which are owed to an organisation by a customer. The most common form of an account receivable is a
AIFS.37 AIFS New 2 Compliance Procedures (TOC) of sale made on credit, via an invoice, to a customer.” It is important to carry out compliance procedures in the
Sales) sales audit as part of the debtors’ audit procedure.
Verify to ensure that the system for receivables has the necessary features.
Write the audit procedures to be performed as an auditor for valuation (assertion) of following :
B/S (Loans & Advances +
AIFS.45 AIFS New 1 (i) Loans and Advances and other current assets.
Finished Goods, Valuation)
(ii) Finished goods and goods for resale.
Explain the audit procedure to vouch/verify :
AIFS.55 AIFS New 1 P&L (Rent and Fuel expenses) (i) Rent expenses
(ii) Power and Fuel expenses
AIFS.61 AIFS New 2 P&L (Foreign Travel Expenses) Foreign Travel Expenses
Evidence is the very basis for Evidence is the very basis for formulation of opinion and an audit programme is designed to provide for that by
AIFS.62 AIFS New 1 formulation of opinion - prescribing procedures and techniques.
Example of evidence in respect Analyse and explain with the help of example of evidence in respect of Sales.
AIFS.65 AIFS New 2 P&L (Sales on Approval) Goods sent out on Sale or Return basis
Audit Of
Sec-72 Qualification &
Co- Briefly explain the provisions for qualification and appointment of
AOC.05 New 2 Disqualification of Auditor(Multi-
operative Auditors under the Multi-State Co-operative Societies Act, 2002.
State Co-operative Society)
Societies
 Audit of
Co-
AOC.07 New 1 Powers and Duties of auditors Explain the powers and duties of auditors under the Multi -State Co-operative Societies Act, 2002.
operative
Societies
Audit of As per Multi-state Co-operative Societies Act, 2002, the auditor shall make a report to the members of the Multi-
Co- State co-operative society on the accounts examined by
AOC.09 New 1 Audit Report
operative him and on every balance-sheet and profit and loss account and on every other document required to be part of
Societies or annexed to the balance-sheet or profit and loss account. Explain
Bank You are appointed as an auditor of Banking Co., and hold discussions with engagement team. List out matters
BA.03 New 4 Engagement Team (Discussion)
Audit which you would discuss at the planning stage of an audit to gain better understanding of the bank and its
Bank
BA.05 New 1 NPA (Reversal of Income) Write a short note on reversal of income under bank audit.
Audit
Advances generally constitute the major part of the assets of the bank. There are large number of borrowers to
whom variety of advances are granted. The audit of advances requires the major attention from the auditors. In
Bank carrying out audit of advances, the auditor is primarily concerned with obtaining evidence about, among other
BA.11 New 1 Audit of Advances
Audit points, the amounts included in balance sheet in respect of advances are outstanding at the date of the balance
sheet. Explain

Audit of Advances-Audit
Bank The auditor can obtain sufficient appropriate audit evidence about advances by study and evaluation of internal
BA.13 New 1 Evidence Appropriateness, NPA
Audit controls relating to advances. Explain in the context of Audit of Banks.
classification and provisioning
Your firm of Chartered Accountants has been appointed as the Auditor of two branches of OBC which are located
Bank Audit of Advances-Audit in the Industrial area. Considering that the location of the branches of bank in industrial area, these would be
BA.15 New 2
Audit evidence master answer advances oriented branches and audi t of advances would require the major attention of the auditors. Advise how
would you proceed to obtain evidence in respect of audit of advances.
The auditor should examine the efficacy of various internal controls over advances in case of Banks to determine
Bank
BA.17 New 3 Advances (Internal Control) the nature, timing and extent of his substantive procedures. Explain what is included in the internal controls over
Audit
advances.
In carrying out an audit of interest expense, the auditor is primarily concerned with assessing the overall
Bank Audit of interest expense - Audit
BA.18 New 1 reasonableness of the amount of interest expense. Analyse and explain stating the audit approach and procedure
Audit approach and procedure
in regard to interest expense.
In the case of a nationalised bank, the auditor is required to make a report to the Central Government. The report
Bank Auditor's Report (Matters
BA.21 New 1 of auditors of State Bank of India is also to be made to the Central Government and is almost identical to the
Audit Required by Law)
auditor’s report in the case of a nationalised bank. Explain what would the auditor state in his report.
“If an accounting professional, whether in the course of internal or external audit or in the process of institutional
audit finds anything susceptible to be fraud or fraudulent activity or act of excess power or smells any foul play in
Bank
BA.23 New 1 Fraud Reporting (Regulator) any transaction, he should refer the matter to the regulator. Any deliberate failure on the part of the auditor
Audit
should render himself liable for action”. Analyse and explain the above RBI Circular regarding liability of
accounting and auditing profession.
CARO.01 CARO Both 1 Applicability (Theory) CARO, 2016 applies to all companies. Discuss.
CARO (Applicabilty - Private Ashu Pvt. Ltd. has fully paid capital and reserves of ` 50 lakh. During the year, the company had borrowed ` 70
CARO.03 CARO Both 1
Company) lakh each from a bank and a financial institution independently. It has the turnover of ` 900 lakh.
CARO.07 CARO Both 1 Cl 1 (Theory) Discuss the reporting requirements regarding Fixed Assets under CARO, 2016.
CARO.09 CARO Both 1 Cl 1 & Cl 2 (Theory) Discuss the matters to be included in the auditor's report regarding fixed assets and inventories as per CARO,
State the matters to be included in the auditor's report as per CARO, 2016 regarding-
CARO.11 CARO Both 1 Cl 1 & 7 - Requirements
(i) Fixed Assets (ii) statutory dues
Discuss the matters to be included in the auditor's report regarding statutory dues
CARO.17 CARO Both 1 Cl 7 & 8 and repayment of loans or borrowing to a financial institution, bank, Government or
dues to debenture holders as per CARO, 2016.
State the matters to be included in the auditor's report as per CARO, 2016 regarding -
CARO.21 CARO Both 1 Cl 8 & 10 - Requirements (i) Default in repayment of loans or borrowing to a financial institution, bank etc.
(ii) Fraud by the company or on the Company by its officers or employees
State the matters to be included in the auditor's report as per CARO, 2016, regarding: (i)
CARO.25 CARO Both 1 Cl 9 & 14 - Requirements
Private Placement of Preferential Issues. (ii) Utilisation of IPO and further public offer.
Cl 10- Scope of auditor’s
The scope of auditor’s inquiry under clause (x) of paragraph 3 of Companies (Auditor’s Report) Order, 2016 is
CARO.27 CARO Both 2 Responsibility w.r.t fraud-
restricted to frauds ‘noticed or reported’ during the year. Explain.
Master Answer
Cl 10- Auditor’s Responsibility
The head accountant of a company entered fake invoices of credit purchases in the books of account aggregate of
w.r.t fraud- fake invoices of
CARO.29 CARO Both 1 ` 50 lakh and cleared all the payments to such bogus creditor.
credit purchases by head
How will you deal as an auditor ?
accountant- Brief
The provisions in the matter of books of account which a company is required to maintain are contained in
Company Section 128- Books of Account-
Co.Acc.01 Both 1 section 128 of the Companies Act, 2013. In the above context, explain clearly the meaning of Books of Account as
Audit II Meaning
contained in the Companies Act, 2013.
Company Sec-128 -Books in Electronic
Co.Acc.10 Both 1 “A company may keep books of account or other relevant papers in electronic mode”. Explain.
Audit II Form
Company Discuss the provisions of Section 134 of the Companies Act, 2013 regarding the authentication of financial
Co.Acc.25 Both 1 Sec-134- Authentication of FST
Audit II statements.
Company According to section 134(3)(c) of the Companies Act, 2013, the report of board of directors on annual accounts
Co.Acc.30 Both 1 Sec-134- DRS
Audit II shall also include a ‘Director’s Responsibility Statement’. Explain.
“An audit is independent examination of financial information of any entity, whether profit oriented
Concepts or not, and irrespective of its size or legal form, when such an examination is conducted with a
Audit & Related Concepts
COA.01 in Both 1 view to expressing an opinion thereon.”
(Definition)
Auditing Explain stating clearly how the person conducting this task should take care to ensure that financial
statements would not mislead anybody.
Concepts
Audit & Related Concepts Discuss the following:
COA.05 in Both 1
(Advantages of Audit) Advantages of independent audit.
Auditing
Concepts
COA.09 in Both 1 Auditing and Law The relationship between auditing and law is very close one.
Auditing
Concepts
Auditing and Behavioural
COA.15 in Both 1 The discipline of behavioural science is closely linked with the subject of auditing.
Science.
Auditing
 Concepts
COA.21 in Both 1 Surprise Checks An element of surprise can significantly improve the audit effectiveness. Explain.
Auditing
Testing of actual operation of
Concepts
the internal control- Procedural It has been suggested that actual operation of the internal control should be tested by the application of
COA.22 in Both 1
tests and Examination in depth- procedural tests and examination in depth. Explain with the help of example in respect of the procedure for sales.
Auditing
Example - Procedure for sales
Concepts
Examination in Depth implies examination of a few selected transactions from the beginning to the end through
COA.23 in Both 1 Examination in Depth
the entire flow of the transaction Explain
Auditing
Concepts
“The auditor should possess specific knowledge of accountancy, auditing, taxation, etc. which are acquired by him
COA.27 in Both 1 Qualities of an Auditor
during the course of his theoretical education”. Explain stating briefly the qualities of Auditors
Auditing
Concepts Provisions giving concrete
“The Companies Act, 2013 has enacted specific provisions to give concrete shape to concept of Auditor’s
COA.29 in Both 1 shape to Auditor’s
Independence”. Explain.
Auditing Independence
Concepts
Importance of Independent
COA.30 in Both 1 Write a short note on Auditor’s Independence.
Audit
Auditing
Concepts The Chartered Accountant has a responsibility to remain independent by taking into account the context in which
threats to independence and
COA.35 in Both 1 they practice, the threats to independence and the safeguards available to eliminate the threats.
the safeguards available
Auditing In the above context, explain the guiding principles.
Concepts
Audit of Limited Company
COA.41 in Both 1 What are the special considerations in an audit of a Limited Company?
Special Consideration
Auditing
Concepts
A junior accountant of a limited company has not separated transactions of one period from those in the ensuing
COA.43 in Both 1 Cut-off Arrangement
period. As an Auditor, state the correct procedure to be followed and the areas in which it can be applied.
Auditing
Concepts
Test Check in System Based In a system based audit, test checking approach provides a good base for the auditor to form his opinion on the
COA.51 in Both 1
Audit financial statement. Give your comments.
Auditing
Sec-177-Appointment of Auditor-Where a company is required to constitute an Audit Committee, all appointments of an auditor under this section
Company
CoAud.03 Both 1 if Audit Committee exists- shall be made after taking into account the recommendations of such committee. Explain stating also the class of
Audit I
Applicable to specified company companies required to constitute Audit Committee.
Section 139(1) of the Companies Act, 2013 provides that every company shall, at
Company
CoAud.05 Both 1 Sec-139 (1) Tenure of Auditor the first annual general meeting appoint an auditor who shall hold office till the
Audit I
conclusion of its sixth annual general meeting.
Company Sec-139(1)-Procedure for Explain the manner and procedure of selection and appointment of auditors as per Rule 3 of Companies (Audit
CoAud.11 Both 1
Audit I appointmnet and Auditors) Rules, 2014
Company Sec-139(2) -Applicability of
CoAud.13 Both 1 “Provisions regarding rotation of auditors affect only specific class of companies”. Discuss.
Audit I Rotation
 Company Sec-139 & Rule 6- Manner of
CoAud.15 Both 1 State the manner of rotation of auditors on expiry of their term.
Audit I Rotation
Company Sec-139(6) - First Auditor - NGC - Managing Director of Pigeon Ltd. himself wants to appoint CA. Champ, a practicing Chartered Accountant, as first
CoAud.19 Both 1
Audit I MD Appoints Auditor auditor of the company.
Company Sec-139(7) First Auditor - GC
CoAud.23 Both 1 The first auditor of Bhartiya Petrol Ltd., a Government company, was appointed by the Board of Directors.
Audit I Case Appointed by BOD
Company Sec-139 (8) -Casual Vacancy Discuss the following:
CoAud.27 Both 1
Audit I (Theory) Filling of a casual vacancy of auditor in respect of a company audit.
Mr. A was appointed auditor of AAS Ltd. by Board to fill the casual vacancy that arose due to death of the auditor
Company Sec-139 (8) - Mutliple
CoAud.33 Both 1 originally appointed in AGM. Subsequently, Mr. A also resigned on health grounds during the tenure of
Audit I Resignations -Casual Vacancy
appointment. The Board filled this vacancy by appointing you through duly passed Board resolution. Comment.
Board of Directors of 'XYZ Ltd." found the auditors of the Company acted in a fraudulent manner, and decided to
Company Sec-140 (1) & Rule 7- Removal
CoAud.39 Both 1 remove the auditors in board's meeting. Comment on the action of Board of Directors and describe correct
Audit I before Expiry of term
procedure to be followed for removal of auditors before expiry of their term.
Sec-140 (1) - Removal before
Company Why Central Government permission is required, when the auditors are to be removed before expiry of their
CoAud.41 Both 1 and after tenure- difference in
Audit I term, but the same is not needed when the auditors are changed after expiry of their term?
provision-Reason
Company Sec-141(3) Disqualification of Under sub-section (3) of section 141 of the Companies Act, 2013 along with Rule 10 of the Companies (Audit and
CoAud.51 Both 1
Audit I Auditor-Master Answer Auditors) Rules, 2014, state the persons who shall not be eligible for appointment as an auditor of a company
Company Sec-141(3) Disqualification - Mr. A, a practicing Chartered Accountant, is holding securities of XYZ Ltd. having face value of ` 900. Whether Mr.
CoAud.53 Both 1
Audit I Security held by CA A is qualified for appointment as an auditor of XYZ Ltd.?
M/s BC & Co. is an Audit Firm having partners Mr. B and Mr. C, and Mr. A the relative of Mr. C, is holding
Company Sec-141(3) Disqualification -
CoAud.55 Both 1 securities of MWF Ltd. having face value of ` 1,01,000. Whether M/s BC & Co. is qualified from being appointed as
Audit I Security held by relative of CA
an auditor of MWF Ltd.?
Company Sec-141 Disqualification/
CoAud.57 Both 1 Ceiling on number of audits in a company to be accepted by an auditor.
Audit I Celling Limit-(theory)
Company Sec-141 (3) Disqualification- ‘B’ owes Rs 5,01,000 to ‘C’ Ltd., of which he is an auditor. Is his appointment valid? Will it make any difference, if
CoAud.59 Both 1
Audit I Indebtedness the advance is taken for meeting-out travelling expenses?
Sec-141(3) & Sec-144. A person shall not be eligible for appointment as an auditor of a company where subsidiary or associate company
Company
CoAud.61 Both 1 Disqualification - Prohibited or any other form of entity is engaged as on the date of appointment in consulting and specialized services as
Audit I
Services Investment Banking provided in Sec.144. Explain.
Company
CoAud.63 Both 1 Sec-143(1)- Inquiry By Auditor Audit enquiry w.r.t. Companies Act, 2013.
Audit I
“T he remuneration of the auditor of a company shall be fixed in its general meeting or in such
Company Sec-142-Remuneration of the
CoAud.64 Both 1 manner as may be determined therein.” Explain with reference to provisions of the Companies Act,
Audit I auditor
2013.
Sec-143 (1)- Duty to Report-
Company The auditor of Trilok Ltd. did not report on the matters specified in sub-section (1) of Section 143 of the
CoAud.65 Both 1 Enquiry under- non reporting on
Audit I Companies Act, 2013, as he was satisfied that no comment is required.
matters- Satisfied
“The auditor’s report shall also state the observations or comments of the auditors on financial transactions or
Company Sec-143 (3)- Matters to be
CoAud.70 Both 1 matters which have any adverse effect on the functioning of the company.” Discuss with relevance to Companies
Audit I incorporated in audit Report-
Act, 2013.
 ABC Ltd is a company incorporated in India. It has branches within and outside India.
Company Sec-143(8) & 139 (1)-
CoAud.74 Both 1 Explain who can be appointed as an auditor of these branches within and outside India.
Audit I Appointment of Branch Auditor
Also explain to whom branch auditor is required to report.
Auditor of A Ltd while conducting audit in the course of the performance of his duties as auditor, believes with
reasons that “an offence of fraud involving such amount or amounts as may be prescribed, is being or has been
Company Sec-143(12) & Rule 13 -Fraud
CoAud.76 Both 1 committed in the company by its officers or employees, the auditor shall report the matter to the Central
Audit I Reporting
Government within such time and in such manner as may be prescribed”. Analyse and also explain the manner of
reporting the matter to the Central Government.
According to Companies Act, 2013, the person appointed as an auditor of the company shall sign the auditor's
Company
CoAud.78 Both 1 Sec-145 signing of report. report in accordance with the relevant provisions of the Act. Explain clearly the relevant provisions relating to
Audit I
signing of report.
Company Right to report to the members The auditor shall make a report to the members of the company on the accounts examined by him. Explain with
CoAud.83 Both 1
Audit I of the company reference to relevant provisions of the Companies Act, 2013.
Governm
GA.01 Both 1 Duties of CAG Explain in detail the duties of Comptroller and Auditor General of India
ent Audit
An audit of Expenditure is one of the major components of Government Audit. In the
context of ‘Government Expenditure Audit’, write in brief, what do you understand by:
(i) Audit against Rules and Orders
Governm
GA.05 Both 1 Audit of Expenditure-All (ii) Audit of Sanctions
ent Audit
(iii) Audit against Provision of Funds
(iv) Propriety Audit
(v) Performance Audit.
Governm
GA.15 Both 1 Propriety Audit Audit against the propriety seeks to ensure that expenditure confirms to certain principles.
ent Audit
Governm Audit of the accounts of stores and inventories has been developed as a part of expenditure audit with reference
GA.25 Both 1 Audit of Stores
ent Audit to the duties and responsibilities entrusted to C&AG. Discuss.
Governm
GA.40 Both 1 Powers of CAG Briefly explain the powers of C&AG in connection with the performance of his duties.
ent Audit
Governm
GA.45 Both 1 Audit of Local Bodies-Objectives State the important objectives of local body’s audit.
ent Audit
ICS.01 ICS Both 1 Purpose of Internal Control Explain the purpose of Internal Control.
The auditor of FAST CARS Ltd obtains an understanding of the control environment. As part of obtaining this
understanding, the auditor evaluates whether management has created and maintained a culture of honesty and
Control Environment & Its
ICS.03 ICS Both 4 ethical behaviour and the strengths in the control environment elements collectively provide an appropriate
Elements
foundation for the other components of internal control.
Advise what is included in control environment. Also explain the elements of control environment.
Control Enviornment
A satisfactory control environment is not an absolute deterrent to fraud although it may help reduce the risk of
ICS.05 ICS Both 7 (Satisfactory) Positive but not
fraud. Explain
absolute deterent to fraud.
ICS.13 ICS Both 2 IT Risks Explain the specific risks to an entity’s internal control posed by IT.
 So far as the auditor is concerned, the examination and evaluation of the internal control system is an
indispensable part of the overall audit programme. The auditor needs reasonable assurance that the accounting
Benefits of Evaluation of
ICS.31 ICS Both 1 system is adequate and that all the accounting information which should be recorded has in fact been recorded.
Internal Controls
Internal control normally contributes to such assurance. Explain stating clearly the benefits of evaluation of
internal control to the auditor.
ICS.33 ICS Both 1 Benefits of IT Controls Explain how does IT benefits an entity’s internal control.
In a medium size trading organisation the accountant was given additional responsibility of making recoveries
from the trade receivables. On one occasion, when an insurance claim of ` 45,000 was received, he credited the
ICS.39 ICS Both 3 Weakness in ICS (Case Study)
same to the account of a trade receivable and misappropriated the cash which he had recovered from the said
trade receivable. Pinpoint weaknesses in the internal control system which led to this situation. Comment.
Formulation of audit
programme after satisfactory The auditor can formulate his entire audit programme only after he has had a satisfactory understanding of the
ICS.41 ICS Both 2
understanding of the I.C systems internal control systems and their actual operation. Analyse and explain.
and their actual operation
When auditor identifies deficiencies and report on internal controls, he determines the significant financial
Control risk assessment when
statement assertions that are affected by the ineffective controls
ICS.43 ICS Both 1 control deficiencies are
in order to evaluate the effect on control risk assessments and strategy for the audit of the financial statements.
identified
Explain
Statements and Guidance Notes Discuss the following:
SAIntro.05 SA Intro Both 7
of ICAI Statements and Guidance Notes of ICAI- whether mandatory or recommendatory?
Standards collectively known as the Engagements Standards issued by AASB under the authority of the council of
SAIntro.07 SA Intro Both 2 Types of Standards
ICAI – Discuss.