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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – OCTOBER 2013
B.COM – V SEMESTER
PRINCIPLES AND PRACTICE OF AUDITING
Time: 3 Hours Max. Marks: 100
SECTION – A
I) Answer ALL the following questions: (10×2=20)
1. What do you mean by an ‘Audit Programme’?
2. What are the qualifications required to become an Auditor?
3. If there is false submission of statement of accounts to the IT Department, which
section is applicable and what is the possible punishment?
4. Define ‘Auditing’.
5. What ‘Internal Audit’?
6. Name any two differences between valuation and verification.
7. Is a qualified report, a good report express your opinions?
8. Explain FIFO.
9. What do you mean by Cost Audit?
10. What do you mean by ‘Ghost Workers’? What is the effect of their inclusion?
SECTION – B
II) Answer any FOUR of the following questions: (4×5=20)
11. What are the objectives of an Audit Report?
12. What is Interim Audit? Explain the differences between Interim Audit and
Continuous Audit.
13. In a company where you are appointed as an Auditor, during your first visit you
found the presence of Internal Control System; being a prudent auditor, explain
your next course of action.
14. Explain the Verification process of Lease-hold Property.
15. Explain the problems of Auditing in a Computerized Environment.
16. Discuss the fixation of Remuneration of an Auditor.
SECTION – C
III) Answer any THREE of the following questions: (3×15=45)
17. What do you mean by the term ‘Internal Check’? Explain the principles of Internal
Check.
18. Discuss in detail the verification and valuation of Plant & Machinery and Patents.
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19. Prevention of errors and frauds is the primary objective of an Auditor in order to
give a true and fair picture of the books of accounts to the stake holders of any
organization, where the Auditor is appointed respectively. In the light of the above
explain the various types of errors and frauds that an Auditor might possibly come
across, while discharging his duties.
20. Explain the process of reviewing a computer installation in an organization where
there is intense practice of book-keeping with the help of Accounting Software
Packages.
21. Discuss the various modes of appointing an Auditor for a Company. State the
disqualification of an Auditor. Also enumerate the Civil Liabilities of an Auditor.
SECTION – D
IV) Case Study (Compulsory Question): (15marks)
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Zeron Company Limited purchased a plot in the year 2001, for a sum of Rs. 5,85,000/-, they
paid a brokerage charge of Rs.20,000/- and legal charges for registration of the property,
including the lawyer’s fees was Rs. 65,000. In the year 2005, the board directors had a
meeting and came to conclusion, that they should be constructing the building for the
appropriate exploitation of the commercial nature of the same plot, this was done by
passing a resolution to the same effect. An architect’s firm was contracted in August 2005.
After all the legal formalities, the plan was sanctioned in November 2005. Construction
took effect with the help of a contractor, later there was an issue with the contractor, as a
result the company’s Engineer (an in house employee) along with the labourers of the
company took over the project and successfully completed it on February 2009.
Questions:
1. In light of the above, explain the Procedure of verification of Building. (10marks)
2. While the take-over of the project happened, what are the additional changes that took
place that had to be recorded in the books of accounts? (5marks)
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