Advanced Auditing, Assurance and Professional Ethics - November 2019 MTP

CA Ram is practicing in the field of financial management planning for over 12 years. He has gained expertise in this domain over others. Mr. Ratan, a student of Chartered Accountancy course, is very much impressed with the knowledge of CA. Ram. He approac hed CA. Ram to take guidance on some topics of financial management subject related to his course. CA. Ram, on request, decided to spare some time and started providing private tutorship to Mr. Ratan along with…

Co LLP is a large firm of Chartered Accountants based out of Delhi-NCR. During the financial year ended 31 March 2019, the firm Rana & Co LLP got an intimation for the peer review on 1 July. The entire peer review process including on-site review got completed. The peer reviewer did not share any of his observations with Rana & Co LLP as draft and final report was submitted to the firm. (a) Peer reviewer need not share any draft…

OPE Ltd issued a prospectus in respect of an IPO which had the auditor’s report on the financial statements for the year ended 31 March 2019. The issue was fully subscribed. During this year, there was an abnormal rise in the profits of the company for which it was found later on that it was because of manipulated sales in which there was participation of Whole-time director and other top officials of the company. On discovery of this fact, the…

Rajeev Ltd is a listed company having business of production of motion pictures. For the year ended 31 March 2018, the company wanted to appoint GST auditor. For the purpose, somebody who is familiar with the business of the company/industry was to be preferred for appointment i.e. who would have worked with the company in the past to avoid efforts/ duplication in terms of providing the information to get the GST audit completed. The company had following options for the…

CER Ltd is a non-banking financial company and has been operating for the last 10 years. The company is duly registered as per the requirements of the Reserve Bank of India. The com pany’s assets base has been very strong over the years due to its efficient management function. The company is also planning to get listed for which required work is going on. For the financial year ended 31 March 2019, the company has closed its books of accounts…

PFS Bank was engaged in the business of providing Portfolio Management Services to its customers, for which it took prior approval from RBI. Your firm has been appointed as the statutory auditors of the Bank’s financial statements for the year 2018-19. Your senior has instructed you to verify the transactions of Portfolio Management Services (PMS). While verifying the transactions you noticed that the bank has not prepared separate record for PMS transactions from the Bank’s own investments. As a statutory…

The auditor should ensure that the board of directors of the top 100 listed entities shall comprise of – (a) not less than 7 directors. (b) not less than 4 directors. (c) not less than 6 directors. (d) not less than 2 directors 8. 50:50 test determination is popularly used in (a) Banking Company (b) Insurance Company (c) NBFC Company (d) Stock Trading Company

CA Sameer, after developing the audit strategy for Menka Ltd., develops an audit plan but finds a need to revise the materiality levels set earlier and therefore a deviation from the already set audit strategy is felt necessary. In this case, he should (a) Continue with the Audit Plan without considering the Audit Strategy (b) Drop the audit and withdraw from the engagement (c) First Modify the audit strategy and thereafter prepare the audit plan according to the modified strategy.…