Advanced Auditing, Assurance and Professional Ethics - November 2015 MTP

Limited, Mr. GN, the statutory auditor of the company, came to know that some of the trade payables are outstanding as it is from previous year in the Balance Sheet of current year. Mr. GN, therefore, requested written confirmation of balances from such trade payables. In the list of confirmations request sent, one of the trade payables, having outstanding balance of Rs. 12 lakhs, sent his confirmation through an electronic mail. Mr. GN is in doubt about the reliability of…

Comment on the following with reference to the Chartered Accountants Act, 1949 and schedules thereto: (a) Mr. Altar, a Chartered Accountant, is employed as a paid Assistant with a Chartered Accountant firm. On 31st December, 2013 he leaves the services of the firm. Despite many reminders from ICAI he fails to reply regarding the date of leaving the services of the firm. (b) Mr. Clever, a Chartered Accountant was invited by the Chamber of Commerce to present a paper in…

(a) Apsara Ltd. is a company in which 15% shares have been held by Bihar Government, 10% by Jharkhand Government and 30% by Uttar Pradesh Government. During the year, Apsara Ltd. invested in 60% shares of Angel Ltd., a newly incorporated company. The Board of Directors of Angel Ltd. could not appointed the auditor within 30 days from the date of registration of the company, so it informed the members of the company to appoint such auditor. Later on, the…

(a) While doing the audit of Consolidated Financial Statements, which current period consolidation adjustments are to be taken into account? (4 Marks) (b) Under the applicable Standard on Auditing, in what circumstances does the report of the statutory auditor require modifications? What are the types of modifications possible to the said report? (6 Marks) (c) State the main features of the Qualified and Independent Audit Committee set up under Clause 49 of the listing agreement. (6 Marks)

(a) While auditing a general insurance company for the financial year 2013-14, you observed that a policy has been issued on 25th March, 2014 for fire risk favouring one of the leading corporate houses in the country and was reflected as premium receivable in the Books of Accounts. The premium was, however, collected on 5th April, 2014. The company contends that it has usual practice to collect premium on later dates in respect of big customers. You further noticed that…

(a) A company engaged in manufacturing of chemicals is consistently recording higher sales turnover, but declining net profits since the last four years. You have been appointed as an investigator to find out the reasons for the same. What are the points you would verify? (6 Marks) (b) AB & Co., a Chartered Accountant firm has been appointed for conducting a performance audit of a company. Briefly explain the factors, which should be considered by AB & Co., while planning…

Explain in brief the behavioural aspects encountered in the management audit and state the ways to solve them. (6 Marks) Write short notes on any four of the following: (a) Special Report by auditor to Registrar of Co-operative Societies (b) Tolerable Misstatement and Tolerable Rate of Deviation (c) Areas excluded from the scope of peer reviewer (d) Corresponding figures (e) Sauda Book. (4 × 4 = 16 Marks) Test Series: March, 2015 MOCK TEST PAPER - 2 FINAL COURSE: GROUP…

(a) Mr. X has been appointed as an auditor of Apparel Ltd., a textile entity, for the financial year 2014-15. While going through the wage register, Mr. X identified that most of the labourers employed are of the age between 12-13 years. On enquiring the same, the management argues that there is no such boundation with regard to employment of children of lower age and contends that it is out of the scope of audit as well to check such…