Page 102 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(a). Both statements I and II are true.
(b). Statement I is true. However, statement II is false.
(c). Statement I is false. However, statement II is true.
(d). Both statements I and II are false."
II. " Which of the following is most correct as regards to disclosure of fact of guarantee of working
capital credit facility?
(a). Disclosure regarding guarantee of loan by directors is in accordance with law.
(b). Disclosure regarding guarantee of loan by directors and relatives only is in accordance with law.
(c). Disclosure regarding guarantee of loan by directors, relatives and non-related persons i.e. Mr.
Krishnamurthy and Mr. Ramalingam is in accordance with law.
(d). No disclosure is required regarding guarantee of loan."
III. " As regards current investments made by company in Ceekay Limited, which of following groups
contain most valid requirements mandated by law?
(a). Name of body corporate in which investment is made, Basis of valuation of individual investment,
aggregate amount of quoted investments and their market value
(b). Name of body corporate in which investment is made, Basis of valuation of individual investment,
aggregate amount of quoted investments
(c). Basis of valuation of individual investment, aggregate amount of quoted investments and their
market value
(d). Name of body corporate in which investment is made, aggregate amount of quoted investments
and their market value."
IV. " As regards current investments made by company in partnership firm, which of following
classification and disclosure requirements include requirements mandated by law?
(a). Name of firm in which investment is made, names of all the partners, total capital and shares of
each partner
(b). Name of firm in which investment is made, names of all the partners, nature of business of firm
and total capital
(c). Name of firm in which investment is made, names of all the partners, nature of business of firm
and shares of each partner
(d). Names of all the partners, nature of business of firm, total capital and shares of each partner."
V. " As regards foreign currency transactions, consider the following statements: -
Statement I Earnings in foreign exchange regarding export of goods on CIF basis needs to be
disclosed in notes to accounts.
Statement II Net loss of foreign currency transactions is required to be disclosed separately in
statement of profit and loss.
Which of the following statements is correct?
(a). Both statements I and II are true.
(b). Both statement I and II are false.
(c). Statement I is true. Statement II is false.
(d). Statement I is false. Statement II is true."

18
"One Mr. K. Narhari, senior faculty at Board of studies of The Institute of Chartered Accountants of India
had prepared a lecture for some of the novice students who had just enrolled for Chartered accountancy
course to be hosted on online platform. The lecture pertained to basic theme of overall objectives of
independent auditor and conduct of audit in accordance with Standards on auditing mainly revolving
around SA-200. As it was first lecture of the session, an inexperienced apprentice operator in office of
Mr. Narhari made some mistakes in certain key words including some blunders, modifications and

omissions. The text typed by operator read as under: -
“The purpose of audit is to embrace the level of confidence of intended users in the financial statements.
This is achieved by the expression of an opinion by the auditor on whether financial statements are
prepared, in all critical respects, in accordance with an applicable financial reporting framework. In
conducting audit of financial statements, the overall objectives of the auditor are to obtain reasonable
assurance about whether financial statements as a whole are free from material misstatement, whether
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