B Com Part II. Paper 2.3CH AUDITING. Module 1. Unit 1 INTRODUCTION

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1 B Com Part II Paper 2.3CH AUDITING Module 1 Unit 1 INTRODUCTION 1. Short Answer Questions: (2 marks ) i. Give the definition of Auditing? ii. State the features of Financial Audit? iii. Discuss about the objectives of Auditing? iv. What are the inherent limitations of Auditing? v. Distinguish between Errors and Frauds? vi. Define standards of auditing? vii. What do you mean by Audit procedures? viii. What are principles of Auditing? ix. Auditing begins where Accounting ends. Comment. x. Explain how Auditing can also be defined as Accounting Control? xi. What are the main aspects to be covered in an audit? xii. Why Auditing is considered as a dynamic social science? xiii. What is the relationship between Accounting and Auditing? xiv. Discuss about the personal attributes of an Auditor? xv. What are the general assumptions of Auditing? xvi. State the basic elements of theory of Audit? xvii. What are the social objectives of Auditing? xviii. What are the types of Errors that may occur in the books of accounts? xix. How Frauds can be classified? xx. Define the term Errors and Frauds? xxi. Why is there a need for an Audit? 2. Medium Answer Questions: ( 6 marks ) i. Accounting is necessity but Auditing is a luxury. Comment. ii. Detection and prevention of errors and frauds are the main objectives of Auditing. Discuss. iii. Auditor is entitled to rely on work performed by others. Comment. iv. Distinguish between Accounting and Auditing? v. What are the special and general qualifications that an auditor should possess and why? vi. What are the factors responsible for existence of fraud and error? vii. How the errors can be detected by the Auditor?

2 viii. What is the duty of an Auditor regarding detection and prevention of Errors and Frauds? ix. Define Auditing in border sense? Discuss about the nature of Auditing? x. Accountancy begins where book keeping ends and where the work of an accountant ends the work of an auditor begins. Explain the statement. 3. Essay type questions: ( 10 marks ) i. Discuss the advantages of audit (a) to the management (b) to the government (c) to the shareholders (d) to the society. ii. Write a brief outline of the development of audit profession in India. iii. Discuss various classes of errors and how the auditor can detect those errors? iv. Audit of the accounts of the sole-proprietor is not compulsory. However he may get his books of accounts audited for various reasons. Discuss. v. What are the basic Auditing concepts? Distinguish between Auditing concepts and Auditing Techniques? vi. Discuss how auditing is related to other fields of knowledge? vii. Fraud does not necessarily involve misappropriation of cash or goods. Explain. viii. Are Accounting and Auditing related to each other? Explain. ix. An auditor is not an accountant. Discuss. x. Independence of auditor must not exist in fact, but should also appear to exist to all reasonable persons. Discuss the disadvantages and advantages of Independent Auditor in this context. TYPES OF AUDIT 1. Short Answer Questions: (2 marks ) i. Why Interim audit is required? ii. What do you mean by Statutory Audit? iii. In which cases Continuous Audit is applicable? iv. What are the features of Independent Financial Audit? v. State the objectives of Internal Audit? vi. State the differences between Audit of Manual accounts and Audit of Computerized accounts in respect to Internal Control System? vii. How Audit can be classified on the basis of Coverage? viii. Define Cost Audit? ix. What do you mean by Management Audit? x. What are the objectives of Propriety Audit? xi. What do you mean by Corporate Governance? xii. Secretarial audit has become a legal necessity. Comment on the statement. xiii. Where Non statutory audit is applied? xiv. What are advantages of Government audit? xv. State the objectives of Environmental audit? xvi. What is the provision regarding CSR as per Companies Act, 2013?

3 xvii. xviii. xix. xx. Mention the procedures to conduct Balance Sheet audit? What are the techniques of Auditing? Define Final audit? What is human resource audit? 2. Medium type questions: (6 marks ) i. Distinguish between Statutory audit and Non-statutory Audit? ii. What are the advantages and disadvantages of Continuous Audit? iii. What do you mean by Limited Review? What are the procedures to be followed for Limited Review? iv. Discuss the responsibility of the auditor in the Balance Sheet audit? v. What is the role of auditor in Corporate Governance? vi. Define Operational audit? Discuss the advantages and disadvantages? vii. Distinguish between Internal audit and Statutory audit? viii. What are the procedures to conduct Balance Sheet audit? ix. What are the preventive measures of removing the drawbacks of Continuous audit? x. What are the advantages and disadvantages of Environment audit? xi. What are the benefits of Corporate Governance? xii. What are the procedures for performing Cash flow audit? 3. Essay type questions: (10 marks ) i. Distinguish between Financial audit and Management audit? ii. Discuss different audit approaches that are followed for the audit in a computerised environment? iii. What is Stock audit? Discuss its importance. iv. What is Periodical audit? Discuss the merits and demerits of Periodical audit? v. What is Human Resources audit? What are its advantages and disadvantages? vi. Define Continuous Audit? In which case this audit applicable? State the advantages and disadvantages of Continuous audit? vii. Distinguish between Continuous audit and Periodical audit? unit 2:Auditing procedure and technique 1. short questions : (2 marks) i. what do you mean by the term audit engagement? ii. what is audit planning? iii. What is audit programme? iv. What are audit working papers? v. What is audit file? vi. What is audit note book? vii. what is audit memorandum? viii. What is audit evidence?

4 ix. What do you mean by compliance procedure? x. what do you mean by substantive procedure? 2. Medium type questions (6 marks) i. What do you mean by the term of audit engagement? why is it necessary to issue an engagement letter? ii. What are the different aspects included in the audit engagement letter? iii. What is audit planning? What are the benefits of audit planning? iv. What do you mean by ownership of working papers relating to audit? Discuss with reference to relevant case laws and standard of audit. v. Why is it necessary to prepare audit memorandum? what are its contents? vi. Distinguish between compliance procedure and substantive procedure. vii. What are the various methods of obtaining audit evidence? viii. M/S Heatwave, a construction company has decided to discontinue you as an auditor for the next year and requests you to handover all relevant working papers of the previous year. Comment. ix. Discuss the principles which are useful in assessing the reliability of audit evidence. Long type questions (10 marks) i. Discuss the advantages and disadvantages of conducting an audit according to a predetermined audit programme. How can those disadvantages be overcome? ii. Explain the advantages of audit working papers. why should audit working papers be preserved carefully by the auditor? iii. Discuss the importance of audit evidence? what are the different types of audit evidence? iv. what are the considerations to be kept in mind by an auditor before commencing an audit? Unit 3 INTERNAL CONTROL AND INTERNAL AUDIT 1. Short answer questions: (2 marks) i. Define Internal Control System in your own words? ii. What are the important objectives of Internal Control System? iii. What are the inherent limitations of Internal Control System? iv. What do you mean by Checklist? Give some examples.

5 v. Why Internal Control Questionnaire is considered as the most appropriate method in Internal Control System? vi. State two advantages and disadvantages of Internal Control Questionnaire? vii. What are the objectives of Internal Control in Computerised Environment? viii. Define Internal Check System? ix. What are the objectives of Internal Check System? x. What do you mean by the term Internal Audit System? xi. How Internal Control Questionnaire is prepared? xii. State four objectives of Internal Audit System? xiii. Mention any four factors considered for designing Internal Control System for Stock? xiv. State four features of Internal Control System? xv. Give an example of Internal Check System? xvi. Internal Audit cannot replace Internal Check. Comment. xvii. Name the methods of examination under Internal Control System? xviii. State two general considerations for framing an Internal Check System? xix. Mention two ways of Internal Control System for preventing defalcation in wage payment? xx. What are the general principles considered for designing Internal Control System? 2. Medium type questions : (6marks) i. Distinguish between Internal Control System and Internal Check System? ii. Distinguish between Internal Check System and Internal Audit System? iii. Which type of companies is required to appoint Internal Auditor or a firm of Internal Auditors? iv. What are the functions of Internal Audit System? v. Distinguish between Internal Control System and Internal Audit System? vi. Suggest a system of Internal Check in respect of daily cash sales of departmental stores? vii. Explain the system of Internal Check in respect of cinema hall? viii. Explain the methods of examination under Internal Control System? ix. How unauthorised cash payment can be prevented through Internal Control System? x. What factors should be considered in designing Internal Control System with respect to petty expenses? xi. Illustrate how Internal Control can be implemented over Purchase Return? xii. Illustrate how Internal Control can be implemented over Sales Return? xiii. Design a system of control over scrap generation and disposal? xiv. Internal Control is spread over accounting and non-accounting system. Discuss. xv. Explain the relationship between Statutory Auditor and Internal Auditor? 3. Long type questions : (10 marks ) i. Explain the Internal Control System in a Computerised Environment?

6 ii. Describe the evaluation of Internal Control System? iii. What do you mean by Internal Control System? State the objectives and Inherent limitations? iv. A good system of Internal Check can be of a great help to the Statutory Auditor. Point out the disadvantages and advantages in this context. v. How Internal Control System can prevent defalcation with respect to wage payment? vi. How the receipts of a nursing home can be controlled? vii. Suggest an appropriate system of internal control for Cash Receipts and Cash Payments? viii. How an auditor can decide the adequacy of Internal Check System? Does an efficient system of Internal Check reduce the work of a Statutory Auditor? ix. A statutory Auditor can rely on Internal Audit to what extent? Can a Statutory Auditor be held liable for damage in spite of his reliance on Internal Audit? x. Design a suitable Internal Control System with respect to stock? Unit-4: Audit Sampling and Analytical Procedure Question of 2 marks: 1) What do you mean by Audit sampling? 2) What is Random sampling? 3) What is Stratified sampling? 4) Define Sampling risk. 5) What is Risk of under-reliance? 6) What do you mean by Risk of incorrect rejection? 7) What is Test checking? 8) What is Surprise check? 9) Define Audit in depth. 10) What is Routine checking? 11) What is Cut-off checking? 12) State two importance of Audit sampling. 13) Discuss two advantages of Test checking. 14) Discuss two limitation of Test checking.

7 15) State two advantages of Audit in depth. 16) Discuss two limitation of audit in depth. 17) Explain the objectives of Routine checking? 18) State two advantages of routine checking. 19) Discuss two limitations of Routine checking. 20) State two methods of Analytical procedure. 21) Write four names of tools and techniques of Analytical procedure. 22) What is common size analysis? 23) Discuss the concept of Materiality. Question of 6 marks: 1) What are the factors to be considered for designing of Audit sample? 2) Explain the importance of Audit sample. 3) Discuss the methods of selection on the sample. 4) Explain the different types of Sampling risk. 5) What are the circumstances are necessary for application of Test checking? 6) What are the factors are to be considered for starting a Test checking? 7) Discuss the advantages of Test checking. 8) Explain the Auditor s duty regarding test checking. 9) What are the factors are to be considered for Surprise checking? 10) Explain the advantages of Audit in depth. 11) Discuss the works which are included in scope of Routine checking? 12) State the advantages of Routine checking. 13) What is routine checking? Explain it s limitation. 14) What is the auditor s duty regarding Routine checking? 15) Explain the methods of Analytical procedure. 16) Discuss the tools and techniques of Analytical procedure. Question of 10 marks: 1) What is Audit sampling? Discuss it s importance. 2) Explain the methods of selection for sampling in details. 3) Give a detail idea about Sampling risk. 4) What is Test checking? Explain the factors are required for Test checking? 5) What is Test checking? Discuss it s advantages and limitations. 6) What is Audit in depth? Explain it s advantages and limitations. 7) Define Routine checking? Discuss it s advantages and disadvantages.

8 8) What is Analytical procedure? How such procedures are helpful in Auditing? 9) Discuss various tools and techniques of Analytical procedure. 10) Write notes on substantive procedure. 11) What is Analytical procedure? Discuss the extent of reliance on Analytical procedure. 12) What is Analytical procedure? Explain the factors which are considered for substantive procedure in Analytical procedure. Unit-5: Vouching and Verification of items Vouching Question of 2 marks: 1) What is Vouching? 2) State two objectives of vouching. 3) Write two importance of Vouching. 4) What do you mean by Voucher? 5) Explain the types of voucher. 6) Write two features of valid voucher. 7) What is Journal proper? 8) What is Customs duties? 9) What is Preliminary expenses? 10) State two differences between routine checking and vouching. Question of 6 marks: 1) Discuss the objectives of Vouching. 2) Distinguish between Routine checking and vouching. 3) What is voucher? Explain different types of voucher. 4) Discuss the features of valid voucher. 5) Write the auditor s duties regarding missing voucher. 6) How will you vouch the following: a) Cash purchase b) Cash sales

9 c) Credit purchase d) Credit sales e) Purchase return f) Sales return g) Goods sent on consignment h) Goods sent on sales or return 7) How will you vouch the following incomes: a) Income from interest and dividend b) Income from house property c) Receipt of capital subsidiary d) Sale proceeds of scrap material e) Rent received f) Recovery of bad debt g) Collection from debtors h) Cash collected by travelling salesman i) Receipts from goods sold on hire-purchase system j) Money received from Bills receivables k) Loan received l) Commission received m) Realization of subscription n) Cash received from sale of fixed assets o) Sale proceeds of investment p) Refund of income tax 8) How will you vouch the following expenses: a) Wages b) Salaries c) Traveller s commission and brokerage d) Loan e) Interest paid on loan f) Dividend g) Travelling allowance h) Insurance premium i) Bills payable j) Freight, carriage and customs duties k) Director s remuneration l) Postage m) Bank charges n) Preliminary expenses o) Royalty payable p ) Research and development expenses q) Payment of income tax r) Capital expenditure s) Advertisement expenses 9) How will you vouch the followings: a) Retirement gratuity to employees

10 b) Purchase of investment c) Bought ledger d) Sales ledger e) Journal proper 10) A loss of Rs on account of embezzlement of cash was suffered by the company and it was debited to salary account. State the auditor s duty regarding it. 11) ABC Ltd. Paid Rs.45 lakhs to its lawyer to defend its title to the factory at Kolkata. The company has treated it as capital expenditure. As a company auditor how would you react this situation. 12) X Ltd. Transferred premium received on issue of shares to the settlement of profit and loss and computed commission payable to the managing director on profit arrived at. Comment on the above situation. 13) A sum of Rs.10 lakhs is received from an Insurance company in respect of a claim for loss of goods in transit costing Rs.8 lakhs. The company credited this amount to the Purchase account. State the duty of auditor. Question of 10 marks: 1) What is Vouching? Discuss its importance. 2) What are the factors to be considered by an auditor while conducting vouching? 3) Discuss how you will vouch Credit purchase. 4) Explain the auditor s duty regarding Credit sales. 5) How will you vouch the Sales ledger. 6) In vouching payments, the auditor does not merely seek proof that money has been paid away.-critically examine the statement. 7) The cashier of a trading firm has also control of all financial books. He also opens all incoming mails comprising cash and cheques. Under these circumstances, what malpractices are open to the cashier in respect of both receipts and payments and what checks would you, as an auditor, adopt to locate such irregularities? 8) Explain the procedure of vouching the wages and salaries. 9) Discuss the principal consideration involved in the examination debtors ledger and creditors ledger. 10) Vouching is the essence of an audit - Discuss the statement.

11 Verification of Assets and Liabilities Question of 2 marks: 1) What do you mean by Verification of assets? 2) What is valuation? 3) Write two importance of verification. 4) State two importance of valuation. 5) What is floating assets? 6) What is prepaid expenses? 7) Define accrues revenue. 8) What is Contingent assets? 9) Define Contingent liabilities. 10) What do you mean by Window-dressing of Balance sheet. 11) What is Wasting assets? 12)Define Fictitious assets. Question of 6 marks: 1) Distinguish between Verification and Valuation. 2) Distinction between Vouching and Verification. 3) Discuss the importance of Valuation. 4) Explain the basis of valuation of Fixed assets. 5) Discuss the basis of valuation of Floating assets. 6) Verification includes Valuation - Discuss 7) Explain the importance of proper allocation of expenditure between capital and revenue. 8) Discuss the auditor s duty regarding events occurring after the balance sheet. 9) How would you as an auditor verify the following Fixed assets? i) Plant and machinery ii) Land iii) Building iv) Leasehold property v) Motor vehicles vii) Live stock vii) Furniture and fixtures viii) Assets abroad ix) Machinery purchased on hire-purchase basis x) Loose tools

12 10) How would you as an auditor verify the following Intangible assets? i) Goodwill ii) Patent rights iii) Copyright iv) Trademark v) Pattern and designs 11) How will you verify the following miscellaneous expenditure: i) Preliminary expenditure ii) Research and development expenditure 12) How will you verify the following liabilities? i) Debentures ii) Secured loans iii) Bills payable iv) Outstanding expenses v) Provision for taxation 13) How would you as an auditor verify the following? i) Investments ii) Raw-materials iii) Work-in-progress iv) Bills receivables v) Capital work-in-progress vi) Stock lying with third party vii) Loans and advances viii) Debtors ix) Cash at bank x) Cash balances xi) Accrued revenues xii) Prepaid expenses 14) What do you understand by Window-dressing of Balance sheet? 15) Auditor of Tractors India Ltd. Was unable to confirm the existence and valuation of imported goods lying with the transporter and accepted a certificate from the management without obtaining other audit evidence. Comment on above. 16) Inventories of a car manufacturing company include value of items required for the manufacture of a model which was removed from the production line five years back, at cost price. As a company auditor how would you react to the above. 17) In the Annual General meeting of Swastik Ltd. a shareholder pointed out that the goodwill in the balance sheet appeared at same figure during the past three years and auditor s report did not mention any thing about it. State whether the auditor failed to discharge his duty. 18) As an auditor, comment on the following situation: You are the auditor of a Manufacturing company whose year ends on 31 st March. An event occurred after the year ended, but before you complete the audit. The audit report issued by you dated 20 th July. The sales ledger balances as on 31 st March was Rs By 20 th July Rs only had been received against this amount as full and final payment.

13 Question of 10 marks: 1) What is verification of assets? Discuss its importance. 2) What are the general principles regarding Verification of assets? 3) What is Contingent liabilities? Discuss its verification. 4) Explain the verification of revenue in details. 5) What are the liabilities of auditor regarding Window-dressing of Balance sheet? 6) What are the necessity for verification of Assets and liabilities while vouching has been done properly? 7) What are the duties of an auditor regarding the valuation and verification of Stock-intrade for a manufacturing company? 8) Discuss auditor s duty regarding verification of cash and investments. 9) An auditor is not valuer. An auditor is intimately connected with values. State the nature of duties of an auditor in regard to valuation of assets and liabilities. 10) What are the points to be enquired into by auditor for verification of liabilities? 11) What is goodwill? As an auditor how would you ascertain that amount paid for goodwill is justified. 12) How would you verify the following assets and liabilities? a) Sundry creditors b) Bank overdraft c) Copyright d) Goodwill e) Building f) Secured loan from bank 13) How will you verify the following? a) Contingent assets b) loose tools c) Bills payable d) Loan on mortgage e) Leasehold property f) Plant and machinery 14) It has been stated that the valuation of Investment for the balance sheet purposes depends largely upon the object for which investments are held.- Discuss it. 15) It has often been said that it is no part of an auditor s duty to take stock. What will be your opinion as an auditor in this regard. 16) Write short notes on : i) Verification of assets ii) Verification and valuation of assets iii) Floating assets iv) Verification of cash v) Contingent assets

14 Module II Unit I Company Audit Short essay type:- 1. An auditor has no liability for negligence in the conduct of an honorary audit -comment. 2. An auditor is not concerned with the propriety of business conduct offer your comment. 3. It is no part of an auditor s duty to give advice to the directors or shareholders as to what they ought to do -comment. 4. Would any statement or explanation made by the auditor in respect of commission in this report or in the balance sheet relieve time of this liability? 5. a) when will a company auditor be appointed by share holders? b) What are the provisions of the companies Act, 1956 regarding appointment of auditor by the central government? 1) Discuss two types of criminal liabilities of an auditor under companies Act, ) How is the remuneration of a company auditor determined? 3) When an auditor in a company be appointed by a) the central government and b) the share holders. 4) It is no part of an auditor s duty to take stock - discuss with reference to case laws. 5) When can an auditor is a company be appointed by the BOD? How is the remuneration of an auditor is a company fixed? 6) Information and means of information are by no means equivalent term -explain. 7) Mention any five important items for which an auditor is required to examine the minutes book of the meeting of the board of directors. 8) State the provisions of the companies Act, 2013 regarding issue of shares of premium. 9) Briefly state the main functions of an audit committee. 10) State the provisions of companies Act regarding declaration and payment of dividend. 11) State the reasons whether you would approve the payment of dividend out of capital. 12) Can dividend be paid out of capital? 13) Can dividend be paid out of capital profit? 14) How should profit prior to incorporation be utilised? 15) Can a company pay interest on paid up capital? 16) Can a company pay interest out of capital? State the auditors duty in respect there to. Essay type:- 1. What are the statutory provisions with regard to the appointment and remuneration of the auditor of a joint stock company? What persons, if any, are disqualified from holding the office of an auditor? 2. A) discuss the procedure for removal of the auditor of a company. B) What persons, if any, are disqualified from holding the office of auditor in a company?

15 3. What are the provisions of Indian companies Act relating to appointment, removal and remuneration of an auditor in a joint stock company? Can an auditor be removed before completing his term. 4. Discuss the states of an auditor in a company. 5. What are the rights of a company auditor? 6. State in brief the liabilities of a company auditor. 7. Mention the provisions of the companies Act. Regarding qualification and disqualification. 8. State the provisions of companies Act regarding declaration and payment of interim dividend. 9. How should unclaimed dividend be treated in the books of accounts? 10. Can a company distribute its current profits without adjusting depreciation? 11. What are divisible profits? Refer to relevant judicial decisions in this respect. 12. Whether a company can pay dividend is the following situations? a) Out of capital. b) Out of current revenue profit before writing off depreciation. c) Out of current revenue profit before writing off past losses. d) Out of current revenue profit before writing off past revenue losses. e) Out of past accumulated revenue profit though there is no current revenue profit. Unit-2: Auditor s report and certificate Question of 2 marks: 1) What do you mean by Auditor s report? 2) What is Auditor s certificate? 3) State two characteristics of Audit report. 4) Write various types of Audit report. 5) What is Qualified audit report? 6) Define Adverse report. 7) What do you mean by Report with disclaimer? 8) What is Piecemeal Report? 9) What is CARO? 10) Write four names of elements of Audit report. 11) What is Partial audit report? Question of 6 marks:

16 1) Distinction between Audit report and Audit certificate. 2) Discuss elements of Audit report. 3) Explain the characteristics of Audit report. 4) Discuss the importance of Auditor s report. 5) Discuss the concept of Unqualified report. 6) Discuss the circumstances when an auditor shall express a qualified report? 7) When to give the adverse report? 8) How to give adverse report? 9) When an auditor gives report with Disclaimer? 10) Distinguish between Qualified and Unqualified report. 11) Distinction between Qualified opinion and Adverse opinion. 12) Distinguish between Qualified opinion and Disclaimer opinion. 13) Write the difference between Adverse opinion and Disclaimer of opinion. 14) Discuss the specific enquires to be made by the auditor during the course of his audit. 15) Write the factors to be determined for True and Fair view of financial position. 16) Auditor s report on Prospectus Discuss the statement. 17) Would any statement or explanation made by the auditor in respect of omission in his report or in the balance sheet relieve him of his liability. 18) Discuss the auditor s certificate on Corporate Governance. 19) Discuss the different clauses of CARO: Clause no. Items Clause no. Items 1) Fixed assets 2) Inventory 3) Loans 4) Internal control on purchase of assets and sale of goods 5) Transactions in which Directors are interested 7) Internal audit system in certain companies 6) Public deposits 8) Maintenance of Cost records 9) Deposit of statutory deposits 10) Sickness 11) Default in Repayment of dues 12) Documents and records for

17 Secured provisions 13) Compliance with special provisions 15) Guarantee for loan taken by others 14) Records of dealing in securities 16) Application of Term loans 17) Financial management 18) Preferential allotment of shares 19) Creation of securities in respect of debentures 20) Disclosure of end-use of money raised from public issue 21) Fraud 20) ABC Ltd. Has not deposited Provident fund contributions of Rs.30 lakhs to the authorities, but accounted in the books. Comment on the above. Question of 10 marks: 1) What is Audit report? Discuss its elements. 2) Explain the different types of Audit report. 3) When and how to qualify the Audit report? 4) Distinction between Qualified opinion, Adverse opinion and Disclaimer opinion. 5) What are the matters to be required by the auditor to be stated in his report as per Companies Act, ) Explain the concept of CARO with different clauses. 7) Discuss the general consideration which may be useful while determining the materiality of an item? 8) Explain the auditor s report on Prospectus in details. 9) Discuss the auditor s certificate on Cash flow. 10) Can CARO,2015 be called a social audit? 11) SMS Ltd. Having Rs.80 crores paid up capital, Rs.20 crores reserves and turnover of last financial year immediately preceding the financial year under audit was Rs.980 crores, but does not have any internal audit system. Management is in the opinion that internal audit is not required as it is not listed. As an auditor comment on the above.

18 Audit report and certificate 1. State the difference between auditor s report and auditors certificate. 2. What do you mean by qualified audit report? 3. Give a specimen of a qualified report. 4. Point out the main differences between an auditor s report and an auditors certificate. 5. What do you mean by report with disclaimer? 6. What is an audit report? Explain the different types of audit report. 7. Write a note on the significance of the term true and fair view. 8. What is meant by balance sheet? What are the events that may occur after the preparation of balance sheet? Do you think that events should be incorporate in the auditor s report. 9. State the additional matters to be included in the auditor s report as per companies auditors report order (CARO), Is it a social audit? 10. Explain the provision as per section 227(1A) of the companies Act with respect to an auditor s report. 11. State the contents of auditor s report as per CARO, Unit III Audit of different institution. Short essay type:- 1. Discuss in detail, the special features of a bank audit. 2. Explain about long form Audit report of a bank. 3. Write a short note on special audit? 4. Discuss about non-performing assets of a bank. 5. Describe the main features of internal check suitable for a banking company. Essay type:- 1. Give specimen of the auditor s report to the members of a banking company. 2. Describe briefly the provision of insurance Act, 1938, which affect the audit of an insurance company. 3. Mention the special items to be emphasised while conducting audit of a college. 4. Draft an audit programme for examining the accounts of a medical college. 5. Prepare an audit programme covering the special points to which you would pay particular attention in auditing the accounts of a college hostel. 6. Draft an audit programme for examining the accounts of a college. 7. Draft an audit programme for examining the accounts of a school. 8. Prepare an audit programme of a private college. 9. Write up an audit programme of a university.

19 Unit IV : Investigation Medium type question ( 6 Marks) 1. What is meant by investigation of accounts? What are its features? 2. Distinguish between audit and investigation 3. Mention the circumstance which may necessitate investigation of the accounts of a company 4. What special matters are to be considered by an investigator appointed on behalf of an individual who wants to become a new partner in an existing firm? 5. You are required to find out the possible reasons of shortfall in working capital of a company. State with reasons on which points you would investigate the matter. 6. You have been appointed as a investigate the financial position of a prospective borrower. What points you would bear in mind in conducting investigation? 7. Outline the procedure you would adopt if you were required to investigate the affairs of a company for suspected fraud 8. A sick company has approached the state government for taking over its management.you have been appointed by the government to investigate into the affairs of the company. Chalk out the procedure for investigation. 9.Outline the procedure you would adopt if you are required to investigate with respect to business combination. 10. You have been appointed by a prospective shareholder for investigation into the valuation of shares of a limited company. How will you conduct investigation for this purpose? Unit-5 : Other Thrust Areas in Auditing ( Short Type Questions- 2 Marks each): 1. Definition of Cost Audit. 2. Define Performance Audit. 3. What is Management Audit? 4. Define Tax Audit, Social Audit, Environment Audit, Operational Audit, Propriety Audit, and Traditional Audit. Short Essay Type Questions (4 Marks Each)

20 5. Discuss the objectives of Cost Audit. 6. Is audit of Cost Accounts necessary? How would you differentiate Cost Audit from Performance Audit? 7. What are the social objectives of Cost Audit? 8. What are the objectives and limitations of Management Audit? 9. Distinguish between Cost Audit and Management Audit. 10. Distinguish between Financial Audit and Management Audit. 11. Explain the manner of conduct of Management Audit. 12. What is Management Audit Questionnaires? 13. What are the objectives of Social Audit? 14. Discuss the advantages of Environment Audit? 15. What are the objectives of Operational Audit? 16. Distinguish between Operational Audit and Propriety Audit. 17. What are the provisions of Propriety Audit in Companies Act,2013? Essay type questions (10 marks) 1. what are the advantages of social audit? Discuss the position of social audit in India. 2. what do you mean by ethics in auditing? what are the objectives of ethics in auditing? what principles should be followed to achieve the ethics in auditing? 3. What do you mean by auditor s independence? Why is it important? What are the legal measures for safeguarding auditor s independence? 4. what are the features of auditing in CIS environment? 5. Discuss different approaches that are followed for the audit in a CIS environment. 6. What are the problems an auditor is likely to face for the audit in a computerized environment? 7. What do you mean by standards on auditing? Discuss the importance of standards on auditing.