Advanced Auditing, Assurance and Professional Ethics - November 2018

1. (@) You are the Auditor of Power Supply Corporation Limited, a 5x4 Government Company for the year ended on 31 March 2018. The =20 turnover of the Company for the period was % 12,000 crores from sale of power. During your audit, you found that the Company had procured Spares for Transmitters for % 850 crores from abroad through a Corporation by name Procurement and Supply India Limited which is also owned and controlled by Government of India. The…

(c) During the financial year ended on 31/03/2018, LM Private Limited had borrowed from a Nationalized Bank, a term loan of % 120 lakhsconsisting of ₹100 lakhs for purchase of a machinery for the new plant and % 20 lakhs for erection expenses. As on the date of 31 March, 2018, the total of capital and free reserves of the Company was % 50 lakhs and turnover for the year 2017-18 was ₹750 lakhs. The Bank paid % 100 lakhs…

Chartered Accountants Firm is having a relationship with a multi-national accounting firm in India. The ICAI required that all firms having networking relationship with any other entity need to furnish information online within the stipulated time. XYZ Associates failed to respond. Comment on this with reference to Professional misconduct, if any. ~“ Internal auditor makes an appraisal of organization structure to ensure that it is in harmony with the objectives of the entity, besides checking of financial transactions and operational…