Auditing and Ethics - May 2025

Co., Chartered Accountants, have been appointed as the statutory auditors of First Health Private Limited for the financial year 2024-25. CA Y is the engagement partner for this assignment. First Health Private Limited operates in the business of hospitals and pharmaceuticals, with 60 hospitals and 200 pharmacy stores across the country. The company has a turnover of ` 680 crores and PAT of ` 32 crores in the current year. While verifying the assertions about book debts, CA Y was…

(a) Mention any three standards issued under authority of ICAI Council which are collectively known as 'Engagement Standards'. (3 Marks) Also mention the purpose of issue of these standards. (2 Marks) (b) Give five examples of operating events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern. (5 Marks) (c) TS Ltd. has raised funds by issuing fully convertible. debentures. These funds were raised for the expansion and diversification…

LMN Ltd., a mid-sized manufacturing company, generates revenue primarily through the sale of consumer electronics in domestic and international market. The company reported sales of ` 2 crores in the Financial Year 2024-25. The company generates revenue through sale of standard electronics devices, INTERMEDIATE EXAMINATION: MAY 2025 customized product orders with specific delivery terms and extended warranties and after-sales services. The auditor has to verify that all sales are accurately measured as per applicable accounting standards and correctly journalized, summarized…

(a) CA Pari is conducting the audit of Heavy Ltd., a company with large number of customers which are generally small retail shop owners. While verifying sundry debtors, CA Pari assesses the risk of material misstatement (ROMM) as low and internal control is operating effectively. With reference to SA 505 (External Confirmations): (i) Which type of confirmation request is most likely to be used by CA Pari in this scenario? (1 Mark) (ii) What are the conditions necessary for using…

Audit of Financial Statements", joint audit basically implies pooling together the resources and expertise of more than one firm of auditors to render an expert job in a given time period which may be difficult to accomplish acting individually. Explain by stating any five advantages of joint audit. (5 Marks) (b) The Management of Sun Shine Ltd. has provided the auditor with a written representation regarding its. responsibilities for the preparation of the AUDITING AND ETHICS financial statements. In addition…

(a) T Ltd. has appointed NFO & Co., Chartered Accountants, as statutory auditors. Since inventory is a material component of the financial statements, CA F plans to attend the physical inventory counting. Provide any five matters that CA F should consider when planning their attendance at the physical inventory counting. (5 Marks) (b) M/S PQ & Co., Chartered Accountants have been appointed as statutory auditors of CBD Multiplex Cinema Ltd. The audit team started the audit and verified the ledger…