hitechpathshala

Q. 1

Which of the following is correct:

The auditor shall express a qualified opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.

The auditor shall express a disclaimer opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.

The auditor shall express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.

The auditor shall express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are material, but not pervasive, to the financial statements

Q. 2

Most of the auditor’s work in forming the auditor’s opinion consists of:

obtaining audit evidence

evaluating audit evidence.

obtaining or evaluating audit evidence.

obtaining and evaluating audit evidence.

Q. 3

An Audit report is:

an opinion drawn on the entity’s financial statements to make sure that the records are true and correct representation of the transactions they claim to represent.

an opinion drawn on the entity’s books of accounts to make sure that the records are true and fair representation of the transactions they claim to represent.

an opinion drawn on the entity’s financial statements to make sure that the records are true and fair representation of the transactions they claim to represent

an opinion drawn on the entity’s books of accounts to make sure that the records are true and correct representation of the transactions they claim to represent.

Q. 4

Which of the following is not correct:

SA 700- Forming an Opinion and Repor4ng on Financial Statements

SA 705- Modified Opinion

SA 701- Communica4ng Key Audit MaEers

SA 706-Compara4ve Informa4on

Q. 5

Which of following is not an element of audit report in accordance with SA 700?

Title

Addressee

Audit strategy

Auditor’s opinion

Q. 6

Which of the following is correct:

When reporting on prior period financial statements in connection with the current period’s audit, if the auditor’s opinion on such prior period financial statements differs from the opinion the auditor previously expressed, the auditor need not disclose the substantive reasons for the different opinion.

When reporting on prior period financial statements in connection with the current period’s audit, if the auditor’s opinion on such prior period financial statements differs from the opinion the auditor previously expressed, the auditor shall disclose the substantive reasons for the different opinion in an Other Matter paragraph in accordance with SA 706.

When reporting on prior period financial statements in connection with the current period’s audit, if the auditor’s opinion on such prior period financial statements differs from the opinion the auditor previously expressed, the auditor shall disclose the substantive reasons for the different opinion in an emphasis of Matter paragraph in accordance with SA 706.

When reporting on prior period financial statements in connection with the current period’s audit, if the auditor’s opinion on such prior period financial statements differs from the opinion the auditor previously expressed, the auditor shall disclose the substantive reasons for the different opinion in an Other Matter paragraph or emphasis of matter paragraph in accordance with SA 706.

Q. 7

Which of the following is incorrect:

Communicating key audit matters in the auditor’s report is not a substitute for disclosures in the financial statements that the applicable financial reporting framework requires management to make, or that are otherwise necessary to achieve fair presentation;

Communicating key audit matters in the auditor’s report is not a substitute for the auditor expressing a modified opinion when required by the circumstances of a specific audit engagement in accordance with SA 705 (Revised);

Communicating key audit matters in the auditor’s report is not a substitute for reporting in accordance with SA 570 when a material uncertainty exists relating to events or conditions that may cast significant doubt on an entity’s ability to continue as a going concern;

Communicating key audit matters in the auditor’s report is a substitute for the auditor expressing a modified opinion when required by the circumstances of a specific audit engagement in accordance with SA 705 (Revised);

Q. 8

Which of the following is correct as per section 143(10) of the Companies Act, 2013:

IFAC may prescribe the standards of auditing as recommended by the Institute of Chartered Accountants of India, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority.

the International Auditing Standards Board may prescribe the standards of auditing as recommended by the Institute of Chartered Accountants of India, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority.

the MCA may prescribe the standards of auditing as recommended by the Institute of Chartered Accountants of India, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority

the Central Government may prescribe the standards of auditing as recommended by the Institute of Chartered Accountants of India, in consultation with and after examination of the recommendations made by the National Financial Reporting Authority.

Q. 9

Which of the following is not a duty of auditor to report under section 143 (1)

whether loans and advances made by the company on the basis of security have been properly secured and whether the terms on which they have been made are prejudicial to the interests of the company or its members;

whether transactions of the company which are represented merely by book entries are prejudicial to the interests of the company;

where the company not being an investment company or a banking company, whether so much of the assets of the company as consist of shares, debentures and other securities have been sold at a price less than that at which they were purchased by the company;

whether the report on the accounts of any branch office of the company audited under subsection (8) by a person other than the company’s auditors has been sent to him under the proviso to that sub-section and the manner in which he has dealt with it in preparing his report;

Q. 10

Which of the following is FALSE regarding UDIN? (Unique document identification number)

It is to be generated on UDIN portal.

Its basic objective is to help ICAI in keeping and maintaining an online registry of different services provided by all of its members.

It has to be generated and stated for each audit report signed by a Chartered Accountant.

It has to be generated and stated for each certificate signed by a Chartered Accountant

Q. 11

UDIN (Unique Document Identification Number) is required to be stated by practising Chartered Accountant on: -

Each audit report only

Each audit report and each cerGficate

Each audit report issued under Companies Act, 2013 only

Each audit report issued under Companies Act, 2013 only and each cerGficate

Q. 12

For which of following company, provisions of CARO,2020 would be applicable?

Boost Up Training (OPC) Private Limited

RCI Bank Limited

PST Industries Limited

Moon Insurance Limited

Q. 13

While reporting under CARO, 2020, it is duty of statutory auditor of company to report: -

Fraud of less than `Rs1 crore commiSed by officers or employees of company during the year

Fraud of `Rs1 crore or more commiSed by officers or employees of company during the year

Fraud of Rs5 crore or more commiSed by officers or employees of company during the year

Any fraud by the company or on the company noTced or reported during the year

Q. 14

Eeyore Pvt. Ltd. is incorporated on 1st July, 2017. During the Financial Year ending on 31set March, 2018, the company did not opt for any borrowing at any point of time and have a total revenue of Rs 60 Lakh. At the year end, it provides the following information regarding its paid-up capital and reserve & surplus-
Particulars Amount (in Rs)
Paid-up Capital
- Consideration received in cash for equity shares (including unpaid calls of Rs 5,00,000) 40,00,000
- Consideration received in cash for preference shares 25,00,000
- Bonus shares allotted 7,00,000
- Share application money received pending allotment 10,00,000
Sub-Total 82,00,000
Reserve & Surplus
- Balance in Statement of Profit and Loss 15,00,000
- Capital Reserves 10,00,000
Sub-Total 25,00,000
GRAND TOTAL 1,07,00,000
You are provided with the provisions regarding applicability of Companies (Auditor’ s Report) Order, 2016, (CARO, 2020) issued under section 143(11) of the Companies Act, 2013 to a private limited company that it specifically exempts a private limited company having a paid up capital and reserves and surplus not more than Rs 1 crore as on the Balance Sheet date and which does not have total borrowings exceeding Rs 1 crore from any bank at any point of time during the ﬁnancial year and which does not have a total revenue as disclosed in Scheduled III to the Companies Act, 2013 exceeding Rs 10 crore during the ﬁnancial year.

Considering the information given above, which of the following shall be considered as a reason regarding applicability or non-applicability of CARO, 2016 (CARO 2020)?

Reporting under CARO, 2016 (CARO 2020) shall be applicable as the company is having a paid up capital and reserves and surplus of Rs 1.07 crore i.e. more than Rs 1 crore as on the Balance Sheet date

Reporting under CARO, 2016 (CARO 2020) shall be applicable as the company is having a paid up capital and reserves and surplus of Rs 1.02 crore i.e. more than Rs 1 crore as on the Balance Sheet date.

Reporting under CARO, 2016 (CARO 2020) shall not be applicable as the company is having a paid up capital and reserves and surplus of Rs 0.92 crore i.e. not more than Rs 1 crore as on the Balance Sheet date.

Reporting under CARO, 2016 (CARO 2020) shall not be applicable as the company is having a paid up capital and reserves and surplus of Rs 0.82 crore i.e. not more than Rs 1 crore as on the Balance Sheet data

AUDIT 8CS

Marks: 15