Advanced Auditing, Assurance and Professional Ethics - May 2018 MTP

(a) You are the auditor of Swift Communications Ltd. for the year 2017–18. The inventory as at the end of the year i.e. 31.3.18 was rupees 2.55 crores. Due to unavoidable circumstances, you could not be present at the time of annual physical verification. Under the above circumstances how would you ensure that the physical verification conducted by the management was in order? (b) You have been appointed as the auditor of Top Health Ltd. for 2017-18 which was audited…

(a) Highlight the provisions relating to corporate responsibility under Sarbanes Oxley Act of 2002. (4 Marks) (b) M/s RM & Co. is an audit firm having partners CA. R and CA. M. The firm has been offered the appointment as an auditor of Enn Ltd. for the Financial Year 2017-18. Mr. Bee, the relative of CA. R, is holding 5,000 shares (face value of Rs. 10 each) in Enn Ltd. having market value of rupees 1,50,000. Whether M/s RM &…

(a) “The auditor shall determine, from the matters communicated with those charged with governance, those matters that required significant auditor attention in performing the audit. In making this determination, the auditor shall take into account the key factors”. You are required to briefly discuss the factors determining the key audit matters. (3 Marks) (b) You are engaged to review the system and the information generated from the financial statements. Discuss the elements of the practitioner’s report for the Historical Financial…

(a) Ploy Ltd., engaged in the leasing of goods carriage, appointed you as the tax auditor for the financial year 2017-18. How would you deal with the following payments relating to the leasing transactions in your tax audit report: (i) Payments of 6 invoices of ` 5,000 each made in cash to Mr. X on 4 th July, 2017. (ii) Payments of 2 invoices of ` 18,000 each made in cash to Mr. Y on 5th July, 2017 and 6th…

CD & Co., a firm of Chartered Accountants, accepted an assignment for audit under GST Law and communicated the same over phone to the previous auditor, M/s AB & Co., Chartered Accountants. Comment. (4 Marks) (b) The areas covered in comprehensive audit vary from enterprise to enterprise depending on the nature of the enterprise, its objectives and operations. You are required to list down some of the broad areas to be examined in comprehensive audit. (4 Marks) (c) Conducting Cost…

(a) Mr. A is a practicing Chartered Accountant. Mr. B is a practicing Advocate representing matters in the court of law. Mr. A and Mr. B decided to help each other in the matters involving their professional expertise. Accordingly, Mr. A recommends Mr. B in all tax litigation matters in the court of law and Mr. B consults Mr. A in all matters related to finance and other related matters, which comes to him in arguing various cases in the…

Rishikumar & Co. has been appointed as an auditor of PK Ltd. for the financial year 2016 -17. CA. Kumar, one of the partners of M/s Rishikumar & Co., completed entire routine audit work by 29th May, 2017. Unfortunately, on the very next morning, while roving towards office of PK Ltd. to sign final audit report, he met with a road accident and died. CA. Rishi, another partner of M/s Rishikumar & Co., therefore, signed the accounts of PK Ltd.…