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    AUDIT Finalold p3

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    VIHARI D
    The document contains a sample paper on advanced auditing and professional ethics. It includes 25 multiple choice questions covering topics such as analytical procedures, audit evidence, auditor independence, auditor opinions, reporting requirements under CARO 2016, and auditor responsibilities. The questions assess understanding of fundamental audit concepts, procedures, standards, and regulatory requirements.

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    AUDIT Finalold p3

    Uploaded by

    VIHARI D
    27 views6 pages
    The document contains a sample paper on advanced auditing and professional ethics. It includes 25 multiple choice questions covering topics such as analytical procedures, audit evidence, auditor independence, auditor opinions, reporting requirements under CARO 2016, and auditor responsibilities. The questions assess understanding of fundamental audit concepts, procedures, standards, and regulatory requirements.

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    The document contains a sample paper on advanced auditing and professional ethics. It includes 25 multiple choice questions covering topics such as analytical procedures, audit evidence, auditor independence, auditor opinions, reporting requirements under CARO 2016, and auditor responsibilities. The questions assess understanding of fundamental audit concepts, procedures, standards, and regulatory requirements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    27 views6 pages

    AUDIT Finalold p3

    Uploaded by

    VIHARI D
    The document contains a sample paper on advanced auditing and professional ethics. It includes 25 multiple choice questions covering topics such as analytical procedures, audit evidence, auditor independence, auditor opinions, reporting requirements under CARO 2016, and auditor responsibilities. The questions assess understanding of fundamental audit concepts, procedures, standards, and regulatory requirements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    Paper 3 : Advanced Auditing and Professional Ethics (Old Course)

    1 The basic assumption underlying the use of analytical procedures is:


    (a) It helps the auditor to study relationship among elements of financial information
    (b) Relationship among data exist and continue in the absence of known condition to the
    contrary
    (c) Analytical procedures will not be able to detect unusual relationships
    (d) None of the above

    2 Direct confirmation procedures are performed during audit of accounts receivable balances
    to address the following balance sheet assertion
    (a) Right and obligations
    (b) Valuation
    (c) Completeness
    (d) Existence

    3 The auditor shall express _________ 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
    (a) Adverse
    (b) Qualified
    (c) Disclaimer of opinion
    (d) Clean

    4 The agreed terms of the audit engagement shall be recorded in an audit engagement letter
    which shall include the following except-
    (a) Responsibilities of the auditor
    (b) Description of methods to be followed for obtaining audit evidence
    (c) Responsibilities of management
    (d) Objective and scope of the audit of the financial statements

    5 The measure of the quality of audit evidence about its relevance and reliability in providing
    support for the conclusions on which the auditor’s opinion is based is:
    (a) Sufficiency of audit evidence
    (b) Appropriateness of audit evidence
    (c) Accounting estimates
    (d) Reasonableness of audit evidence

    © The Institute of Chartered Accountants of India


    6 The auditor’s _________ safeguards the auditor’s ability to form an audit opinion without
    being affected by any influences.
    (a) Objectivity
    (b) Independence
    (c) Confidentiality
    (d) Integrity

    7 Which of the following company is not exempted from reporting under CARO, 2016?
    (a) Banking company.
    (b) Insurance company.
    (c) Company licensed to operate under section 8 of the Companies Act, 2013.
    (d) Private limited company having paid up capital of Rs. 5 crore.

    8 Section 144 of the Companies Act, 2013 does not excludes the statutory auditor of the
    company to render the services of -
    (a) Investment advisory
    (b) Investment banking
    (c) Branch auditor
    (d) Actuarial

    9 As per SA 550 on Related Parties, existence of which relationship indicate the presence of
    control or significant influence?
    (a) Friend of a family member of a person who has the authority and responsibility for
    planning.
    (b) Holding debentures in the entity.
    (c) The entity’s holding of debentures in other entities.
    (d) The entity’s holding of equity in other entities.

    10 When does an auditor shall modify the opinion in the auditor’s report?
    (a) When, based on the audit evidence obtained, the financial statements as a whole are not
    free from material misstatement.
    (b) When, unable to obtain sufficient appropriate audit evidence to conclude that the
    financial statements as a whole are free from material misstatement.
    (c) (a) and (b) both.
    (d) Either (a) or (b).

    © The Institute of Chartered Accountants of India


    11 For a given level of audit risk, the acceptable level of detection risk bears ______
    relationship to the assessed risks of material misstatement at the assertion level.
    (a) direct.
    (b) Inverse
    (c) Either (a)or(b)
    (d) none of the above
    12 Control activities, whether within IT or manual systems, have various objectives and are
    applied at various organisational and functional levels. Which of the following is an example
    of control activities:
    (a) Authorization.
    (b) Performance reviews.
    (c) Information processing.
    (d) All of the above
    13 If, as a result of a misstatement resulting from fraud, the auditor encounters exceptional
    circumstances that bring into question his ability to continue performing the audit, he shall-
    (a) Withdraw from the engagement immediately.
    (b) Report to Audit team regarding withdrawal.
    (c) Determine the professional and legal responsibilities applicable in the circumstances.
    (d) Ask the management for his withdrawal.
    14 In order to form the opinion, the auditor shall conclude as to whether the auditor has
    obtained _________about whether the financial statements as a whole are free from
    material misstatement, whether due to fraud or error.
    (a) reasonable assurance
    (b) absolute assurance
    (c) Limited assurance
    (d) None of the above
    15 When is evidential matter, generally, considered sufficient in case of stock exchange
    member audit?
    (a) When it constitutes entire population
    (b) When it is objective and relevant
    (c) When it is enough to provide a basis for giving reasonable assurance regarding
    truthfulness
    (d) When auditor collects and evaluates it independently
    16 The scope of the audit of Depositories including reference to the pronouncements of the
    ICAI, which the auditor adheres to, generally is communicated to the client in the
    i) auditor’s report

    © The Institute of Chartered Accountants of India


    ii) engagement letter
    iii) representation letter
    (a) only (i)
    (b) Both (i) and (ii)
    (c) Both (i) and (iii)
    (d) All of the above
    17 Which of the following information should a successor auditor obtain during the inquiry of
    the predecessor auditor before accepting engagement?
    i) Information about integrity of management
    ii) Disagreement with management concerning auditing procedures
    iii)Review of internal control system.
    iv) Organisation structure
    (a) (i) and (ii)
    (b) (ii) and (iii)
    (c) (i) , (ii) and (iii)
    (d) (i) and (iii)
    18 In an investigation relating to possible misappropriation of cash, the cashier says that
    every day the cash is counted and is reviewed by the Finance Head. Your specimen review
    indicates that the daily cash summary was not signed off by of the Finance Head. In this
    situation you should:
    (a) conclude that the cashier is not telling truth
    (b) consider extending investigation procedures like corroborative enquiry with the
    Finance Head, review of appropriate daily cash summaries etc.
    (c) conclude that the Finance Head is not a responsible person

    (d) conclude that daily cash summary is not relevant for the investigation
    19 Current period adjustments are those adjustments that are made:
    (a) only on the first occasion of the preparation and presentation of consolidated
    financial statements
    (b) only on the first occasion of the audit of consolidated financial statements
    (c) in the accounting period for which the consolidation of financial statements is done
    (d) None of the above
    20 Which of the following best suits the description – “The susceptibility of an assertion that
    could be material, either individually or in aggregate, before consideration of any related
    Internal Controls.”
    (a) Inherent Risk
    (b) Detection Risk

    © The Institute of Chartered Accountants of India


    (c) Control Risk
    (d) None of the above
    21 CA. D, a chartered accountant in practice availed of a loan against his personal
    investments from a bank. He issued 2 cheques towards repayment of the said loan as per
    the instalments due. However, both the cheques were returned back by the bank with the
    remarks "Insufficient funds". As per Chartered Accountants Act, 1949, under which clause
    CA D is liable for misconduct .
    (a) Clause (6) of Part I of the First Schedule
    (b) Clause 2 of Part I of the Second Schedule
    (c) Clause 12 of Part I of the First Schedule
    (d) Clause 2 of Part IV of the First Schedule
    22 As an auditor appointed under section 44AB of the Income Tax Act, 1961, under which
    clause of Form 3CD, you will report for amounts deemed to be profits and gains under
    section 32AC, 33AB or 33ABA or 33AC
    (a) clause 24
    (b) clause 40
    (c) clauses 31
    (d) clause 23
    23 As per CARO, 2016, the auditor is required to report whether the company is required to
    be registered under section 45-IA of the Reserve Bank of India Act, 1934. If so, whether the
    registration has been obtained.
    (a) Under Clause (xi) of paragraph 3 of the CARO, 2016,
    (b) Under Clause (xvi) of paragraph 3 of the CARO, 2016,
    (c) Under Clause (xv) of paragraph 3 of the CARO, 2016,
    (d) Under Clause (xiv) of paragraph 3 of the CARO, 2016,
    24 As per Clause (i)(c) of Paragraph 3 of the CARO, 2016, the auditor is required to report
    on :
    (a) whether the title deeds of immovable properties are held in the name of the
    company. If not, provide the details thereof.
    (b) whether the company has entered into any non-cash transactions with directors or
    persons connected with him
    (c) whether any fraud by the company or any fraud on the Company by its officers or
    employees has been noticed or reported during the year; If yes, the nature and the
    amount involved is to be indicated;
    (d) whether the company is maintaining proper records showing full particulars, including
    quantitative details and situation of fixed assets;

    © The Institute of Chartered Accountants of India


    25 LM Ltd. had obtained a Term Loan of rupees 300 lakhs from a bank for the construction
    of a factory. Since there was a delay in the construction activities, the said funds were
    temporarily invested in short term deposits. Under which clause of CARO 2016 the auditor is
    required to report -
    (a) Under Clause (viii) of paragraph 3 of the CARO, 2016,
    (b) Under Clause (xi) of paragraph 3 of the CARO, 2016,
    (c) Under Clause (x) of paragraph 3 of the CARO, 2016,
    (d) Under Clause (ix) of paragraph 3 of the CARO, 2016,

    © The Institute of Chartered Accountants of India

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