Advanced Auditing, Assurance and Professional Ethics - May 2019

1. (a) You are engaged by M/s Active Ltd. to examine and report on prospective financial information which the management of the company has prepared for presentation at an Investor meet program organized by a State Government to attract investment in their state. The company in its vision document descripted various plans and proposals of the company with projected financial goals and means to achieve the same and various benefits accruing to the economic development of the State. What important…

(c) After accepting the statutory audit of M/s All in One Ltd., a 4 departmental store, you became aware of the fact that management of the company have imposed certain limitations on the scope of your assurance function which may adversely affect and result in your inability to obtain sufficient appropriate audit evidence to discharge your responsibility required by the statute. Indicate the consequences and your response to the limitations imposed by the management on your scope. (a) CA Dabu…

3. (a) You have been appointed as an auditor of M/s Real Ltd. in which total number of directors in the board is 9. As an auditor, state the points to be considered in verification of composition of Board under Regulation 17 of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. (b) Banks, because of certain characteristics, are distinguished from other commercial enterprises and hence it needs special audit consideration. As an auditor of…

4. (a) A newly qualified professional has received his first appointment as 5 auditor of a large company and is very much concerned about the effectiveness of internal control and wants to assess and evaluate the control environment as part of his audit program. Towards achieving his objective, he seeks your help in knowing the Standard Operating Procedures (SOPs) of assessment and evaluation of control. (b) PQ & Co. is an audit firm with P and Q as partners. For…

5. (a) The volatility, unpredictability and pace of fast changes that exists in the automated environment today is far greater than in the past and consequently it throws more risk to business which requires them to . have a need to continuously manage such risks. State various risks which an enterprise may have to face and manage. A professional accountant is often required to give certificates or report for special purposes required by various authorities and statute and he needs…

(a) Pearl Ltd. is an exporter of precious and semi-precious stones. The turnover of the company is % 150 crore, out of which & 105 crore is from export business and remaining % 45 crore from domestic sales. Amount received from export business is all in foreign currency. Directors of Pearl Ltd. is of the opinion that cost audit is not applicable to their company as maximum revenue has been generated from export business. Give your opinion. (b) You have…