Auditing and Ethics - Sep Rtp 2025 RTP

The previous auditors, Veer & Co. did not reply to the communication of Mohan & Associates. Which fundamental principle of professional ethics is not followed by them? (a) Objectivity. (b) Integrity. (c) Professional behaviour. (d) Professional competence and due care. The auditor did not carry out any other audit procedures to justify management's treatment of the said tax matters under appeal in the financial statements. What is lacking on part of auditor in such a situation? (a) Professional Skepticism. (b)…

Mr. Raj is confident that investment made by him is completely secure and there is no risk of any loss. Select the correct statement in this regards: (a) Audited Financial statements provide absolute assurance therefore money invested by Mr. Raj is absolutely safe. (b) Audited Financial statements provide reasonable assurance. It doesn't guarantee complete accuracy. (c) Neither (a) nor (b) is correct. (d) Both (a) and (b) are correct. Mr. A was preparing the documents and audit file in physical…

Ltd., CA M reviews a large number of invoices collected by the audit team. However, noticing that only a few have third-party confirmations, CA M reminds the team that simply having more documents doesn't ensure strong audit evidence and explained that reliability or quality matters too. What CA M is trying to explain in the given situation? (a) Sufficiency relates to quality; appropriateness relates to quantity. (b) Internal documents are always sufficient and appropriate. (c) More documents mean better audit…

As per SA 560, when, after the date of the auditor’s report but before the date the financial statements are issued, a fact becomes known to the auditor that, had it been known at the date of the auditor’s report, may have caused the auditor to amend the auditor’s report, the auditor shall: (a) Modify the opinion in accordance with SA 705 and provide the amended auditor’s report. (b) Discuss the matter with management and determine whether the financial statements…

Associates, Chartered Accountants, were appointed as the auditor of CIN Ltd., a construction company. During the audit, CA Mini, a Partner of the firm noticed the following: The company has several ongoing projects, but only selected project revenues have been reported. SEPTEMBER 2025 EXAMINATION REVISION TEST PAPER AUDITING AND ETHICS Several expense vouchers are either missing or are handwritten and lack proper authorisation. The company has changed its depreciation method from the straight-line method to the written-down value method without…

CA Rishu is appointed as an auditor of a manufacturing company with a complex supply chain, multiple inventory locations, and recently introduced financial reporting requirements. Some article assistants and an expert assigned for inventory verification are forming part of audit team of CA Rishu. To ensure that audit risk is reduced to an acceptably low level, CA Rishu is focused on developing an effective and efficient audit plan. Explain the benefits of adequate audit planning in the audit of financial…

During the audit of Apex Ltd., the auditor plans to place reliance on the internal controls related to the revenue recognition process, which appear well-designed based on the preliminary assessment. However, due to materiality of revenue and the inherent risk of overstatement, the auditor concludes that more persuasive audit evidence is needed to evaluate the effectiveness of these controls. Discuss the matters the auditor may consider in determining the extent of test of controls. Chapter 4 - Audit Evidence

Bold Ltd. supplies navy uniforms across the country. The company has 5 warehouses at different locations throughout the India and 4 warehouses at the borders. The major stocks are generally supplied from the borders. Bold Ltd. appointed M/s KPM & Co. to conduct its audit for the financial year 2024-25. Mr. P, partner of M/s KPM & Co., attended all the physical inventory counting conducted throughout the India but could not attend the same at borders due to some unavoidable…