Advanced Auditing, Assurance and Professional Ethics - Nov 2022 RTP

In the given case scenario, has Mr. K breached the maximum limit of clients. If yes, can he be held guilty of professional misconduct? (a) Yes. The ceiling on number of tax audits which can be accepted by a chartered accountant is 20. In this given case, Mr. K is already having 19 clients and has now accepted 2 more (19+2=21). Also, he shall be held guilty of professional misconduct as per the Chartered Accountants Act, 1949. (b) Yes. The…

Assuming yourself to be Mr. K, what would be your advice to Mr. J on the above matter? (a) The company has not followed the provisions of section 146 of Companies Act, 2013. All notices of, and other communications relating to, any general meeting shall be forwarded to the auditor of the company. Also, as per section 147, the company shall be punishable with fine which shall not be less than ` 25,000/- but which may extend to ` 5…

Will the retaliating act of Mr. J against the company make him guilty of professional misconduct? (a) No. The above act will not lead to professional misconduct. However, under section 147 of the Companies Act, 2013, Mr. J shall be punishable for exercising lien over the company’s documents. (b) No. The Chartered Accountants Act, 1949 is silent about the above situation and hence it will not lead to professional misconduct. (c) Yes. As per the recent decision of Ethical Standards…

In the given case scenario, visiting cards printed by Mr. K & Mr. J, is there anything which may lead to professional misconduct? If so, under what provisions? (a) Mentioning ‘CPA Ireland’ & the term ‘Insolvency Professional’ by Mr. K & Mr. J respectively violates the provisions of clause 7 of part I of First schedule of the Chartered Accountants Act, 1949. Hence, both of them shall be held guilty of professional misconduct. (b) There is no information contained in…

The firm had received the following assignments: (i) Concurrent audit for T Bank Ltd. (ii) Statutory audit for BBT Bank Ltd. (it is to be noted that the bank was not sponsored by T Bank) (iii) Offer to act as settlor of ZZ Charitable Trust. (iv) Internal audit of PF Trust of Government Company Ltd. (v) Statutory Auditor of Government Company Ltd. Among the above assignments, which assignments can be accepted by the firm? (a) Either (i) or (ii), (iii)…

Mr. B one of the partners of the firm is facing a dilemma as to whether the firm BMY LLP should accept the appointment as Statutory Auditors of M/s Foam Limited wherein Mr. B had sent a communication in writing addressed to the outgoing auditor Mr. Dalai u nder certificate of posting and the outgoing auditor has sent an acknowledgement vide their official email, but this email address of the outgoing auditor is not registered with the Institute of Chartered…

CA Z is appointed as a Statutory Auditor of JB Finance Limited (a Non - Banking Financial Company covered under Non-Banking Financial Company — Systematically important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016) for the year 2021-22. Following information is available with CA Z with respect to JB Finance Limited as at 31 st March, 2022: Particulars ` (in Lakh) Standard Assets 700.00 Sub-standard Assets Doubtful Assets (Secured and up-to one year) 200.00 10.00 Doubtful Assets…

While auditing with respect to compliance with CARO, 2020, Mr. Omprakash, for additional reporting purpose, observed the following, relevant to Para 3(vii) of CARO, 2020: Statutory Dues Provident Fund Undispute Date Payable d Amount (` in lakh) 28 Date Paid 1.5 24th September, 2021 27th March, 2022 2.45 23rd October, 2021 Customs Duty 0.65 20th September, 2021 24th April, 2022 10th April, 2022 Income Tax Demand for A.Y. 2019-20 0.55 18th October, 2021 Not Paid till date Also, a representation…