Auditing and Ethics - November 2019

Examine with reasons whether the following statements are correct or incorrect. (Answer any seven out of eight) (a) The auditor's reporting on internal financial control will be applicable with respect to interim financial statements. (b) Under a properly framed audit programme by the auditor, the danger is significantly less and audit can proceed systematically. (c) All entities that are under common control by a state (i.e., national, regional or local government) are considered related party. (d) Provision of CARO, 2016…

(a) The auditor shall plan and perform an audit with professional skepticism recognizing that circumstances may exist that cause the financial statements to be materially misstated. (4 Marks) Discuss any four examples of professional skepticism. (b) In establishing overall audit strategy, the auditor shall ascertain the reporting objectives of the engagement to plan the timing of the audit and the nature of the communications required. Elucidate those cases by which auditor can ascertain the reporting objectives of the engagement. (4…

(a) Discuss the various points which auditor needs to consider in determining whether it is appropriate to use audit evidence about operating effectiveness of controls obtained in previous audit, and if so, the length of the time period that may elapse before retesting. (4 Marks) (b) Validity and consequence of issue of shares at discount, check with respect to the provisions of the Companies Act, 2013. (4 Marks) (c) Explain the disclosure requirements of IND AS compliant Schedule III to…

(a) Discuss the points to be considered by auditor for the purpose of constructing an audit programme. (4 Marks) (b) "Before the commencement of audit, the joint auditors should discuss and develop a joint audit plan." Discuss the points to be considered in developing the joint audit plan by the joint auditors. (4 Marks) (c) Board of Directors of MN Ltd. wants to appoint CA B, a practicing Chartered Accountant, as an internal auditor of the company as they believe…

(a) When corresponding figures are presented, the auditor’s opinion shall not refer to the corresponding figures. Discuss the exceptions of the above statement when the prior period financial statements are audited. (4 Marks) (b) M Ltd. has given certain loans to related parties and also has accepted certain deposits. As an auditor, how will you include the above items in paragraph 3 of CARO, 2016? (4 Marks) (c) Briefly explain the policies and procedures of assembling the final audit file…

(a) ''There is no difference in provisioning of NPA as regards to categories of NPA, whether the debt is secured or unsecured." Critically evaluate the statement on the basis of provisioning norms of NPA of nationalised bank. (4 Marks) (b) In the case of audit of a charitable institution, what attentions should be paid by the auditor regarding audit of expenditure items? (4 Marks) You have been appointed auditor of M/s. Divine Children Hospital. Discuss any four important points that…