Advanced Auditing, Assurance and Professional Ethics - November 2018 MTP

(a) A firm of a father and a son is receiving Rs. 2 lakhs towards job work done for XYZ Ltd. during the year ended on 31.03.16. The total job work charges paid by XYZ Ltd. during the year are over Rs. 50 lakhs. The father is Managing Director of XYZ Ltd. having substantial holding. The Managing Director told the auditor that since he is not involved in the activities of the firm and since the amount paid to it…

(a) Lily, a chartered accountant prepares and certifies projected financial statements of his client Amazon Ltd. Amazon Ltd. forwarded the same to their banks to secure some loans and bank, on that basis sanctioned a loan. Comment with reference to the Chartered Accountants Act, 1949, and Schedules thereto. (b) Beam Ltd., having principal place of business in Gujarat, is engaged in the generation, transmission, distribution and supply of electricity throughout the India. The management of the company came to know…

A practising Chartered Accountant uses a visiting card in which he designates himself, besides as Chartered Accountant, as (i) Tax Consultant (ii) Cost Accountant. Advise on above with reference to the Chartered Accountants Act, 1949, and Schedules thereto. (b) PQR Ltd. is a listed company having turnover of Rs. 50 crores & plans expansion by installation of new machines at new building-having total additional project cost of Rs. 20 crore. Rupees (In crore) 10.0 8.5 1.5 20 Crore Purpose …

(a) M/s LMN, a firm of Chartered Accountants responded to a tender from a State Government for computerization of land revenue records. For this purpose, the firm also paid Rs. 50,000 as earnest deposit as part of the terms of the tender. Comment with reference to the Chartered Accountants Act, 1949. (b) You have been appointed as the auditor of Good Health Ltd. for 2017-18 which was audited by CA Trustworthy in 2016-17. As the Auditor of the company state…

M, a Chartered Accountant in practice, has printed visiting cards which besides other details also carries a Quick Response (QR) code. The visiting card as well the QR code contains his name, office and residential address, contact details, e-mail id and name of the firm's website. Comment with reference to the Chartered Accountants Act, 1949 and schedules thereto. (b) XYZ Hospital Private Ltd. is engaged in running a hospital of 200 Beds since last 20 years. Revenue Track of the…

(a) KG Ltd. wants to provide prospective Financial Information to its investors with information about future expectations of the company. You are engaged by KG Ltd. to examine the Projected Financial Information and give report thereon. What will you consider in assessing the presentation and disclosure of the prospective Financial Information and the underlying assumptions? (b) Mr. Ram, a Chartered Accountant has appeared before the Income Tax Authorities as the authorized representative of his client and delivers to the Income…

Auditor of P Ltd. is also appointed to undertake its Tax Audit. After the completion of Statutory Audit, he finalizes Tax Audit without referring to Standards on Auditing and Guidance Notes of Institute as he is of the opinion that Tax Audit relates only to tax matters with which the Income tax department is concerned. Moreover, the assesse furnishes to the auditor only the requisite information and records for the purpose of Tax Audit. (b) Mr. X was appointed as…

(a) M/s MUNISUVRAT, a firm of Chartered Accountants responded to a tender from a State Government for computerization of land revenue records. For this purpose, the firm also paid Rs. 50,000 as earnest deposit as part of the terms of the tender. Comment with reference to the Chartered Accountants Act, 1949, and Schedules thereto. (4 Marks) (b) Mr. Prem, a Chartered Accountant has appeared before the Income Tax Authorities as the authorized representative of his client and delivers to the…