- JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – SEPT /OCT 2014
BCOM –V SEMESTER
PRINCIPLES AND PRACTICE OF AUDITING
Duration: 3 Hours Max. Marks: 100
SECTION – A
- Answer ALL the questions. Each carries 2 marks. (10 x2 =20)
- What do you mean by Continuous Audit?
- Define ‘Internal Control’.
- List out the characteristics of a good audit report.
- What do you understand by the term Collateral Voucher?
- What are the instances in which the appointment of a Company Auditor takes place through a special resolution?
- Name the advantages of Interim Audit?
- What does Section 147 of the Companies Act, 2013 deal with?
- Bring out the advantages of Internal audits.
- A company has got an ‘Unqualified Report’, should the company be contended or sad about it? What does it mean to the company?
- What is Audit Sampling?
SECTION – B
- Answer any FOUR Each carries 5 marks. (4×5=20)
- Discuss Internal Control in regards to ‘General Financial Arrangements’.
- What is the process of removal of a ‘Company Auditor’ under the Companies Act, 2013?
- As per SA 300, discuss the activities to be planned by an Auditor, before commencing an Audit.
- The auditor on good faith accepted an engagement, after accepting the engagement he got to know that there is a limitation that is imposed by the management in terms of getting one of the most important evidence required, express your opinion in terms of the consequence in such a situation.
- What are the factors influencing the evolution of Auditing?
- Explain the problems in EDP Auditing.
SECTION – C
III) Answer any THREE questions. Each carries 15 marks. (3×15=45)
- Explain in detail the ‘Audit Process’.
- What do you mean by the term ‘Internal Check’? Explain its objectives. Elaborate on the evaluation of the Internal Control system in an organization.
- Describe the Auditor’s Report as prescribed by Law or Regulation (SA-700).
- Elaborate on the Eligibility, Qualification and Appointment of a Company Auditor.
- Discuss in detail the Objectives of Auditing.
SECTION – D
- IV) Case study- Compulsory question. (15 marks)
- M/s Xaka Co. Ltd. appointed an Auditor to look into the affairs of the company. The company had twenty branches – 15 branches inside India and 5 in foreign Countries. The company had made a loss for the past two years, but the management of the company was confident that, it will make sufficient profits the next financial year to overcome the losses made in the previous years and also have enough profits to pay dividends to the shareholders.
On evaluation the auditor found that the company had investments in other company’s shares, which were sold at loss, there were dividends for two financial years declared although, the company was running under a loss. It was also found that, the directors had promised to pay one of the renowned NGO’s a donation of 10% of the profits likely to be received next financial year, without the permission of the shareholders.
On the auditors reporting this matter to the management, the auditors learnt that, all this happened with the permission of the Board of directors and when the auditors insisted to report this matter the government authorities, the Board promised to sponsor all the auditing staff including the main auditor a trip to the countries where the branches were located in the name of branch audits. The company also promised the auditor to pay the remuneration in the next financial year, 5% of the total profits earned by the company, as the company was currently not in a position to pay auditor’s remuneration.
Question: As an auditor of M/s. Xaka Co. ltd, reflect your opinions on the decision to be taken by the auditor of this company.
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