Page 110 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(b). 150 crore and ` 25 crore
(c). 50 crore and ` 125 crore
(d). 25 crore and ` 50 crore"
V. "Had Venus Ltd. been a government company, who would have appointed the first auditors of
the company. Also state the relevant provisions of the Companies Act 2013 :-
(a). Board of Directors, within 10 days of registration. Section 139(7)
(b). Comptroller & Auditor General of India, within 60 days of registration, section 139(7)
(c). Central Government, within 60 days of registration of company, Section 139(5)
(d). Central Government, within 30 days of registration of company, Section 139(5)"

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• M/s PQR & Associates are appointed as auditors of Jupiter Ltd. for the Financial Year 2019-20.
• The team consisted of Mr. P, Mr. Q, Mr. R all Chartered Accountants and three article assistants.
• Mr. P, one of the engagement partners, briefed the audit staff about various items of financial
statement to be checked in detail in case of Jupiter Ltd and about various aspects to be covered
in the audit of the company.
• Mr. P told the audit staff about audit documentation, audit evidence, audit file, completion
memorandum and many other things along with relevant Standards of Auditing applicable.
• Mr. P also told the staff about the risk of material misstatement that the financial statements
are prone to and how it affects the sufficiency and appropriateness of audit evidence.
• The audit staff was also apprised about the various audit procedures to be adopted while
conducting the audit of Jupiter Ltd.
• Further discussions were done about various types of risks related to financial statement and
the audit work, the related audit procedures, and the risk assessment procedures.
• The engagement partners are also very particular about the application of various Standards on
Auditing applicable in case of Jupiter Ltd.

Based on the above facts, answer the following:-"
I. " ………………. is the summary of significant matters identified during audit and way they are
addressed

(a). Audit File
(b). Audit Programme
(c). Completion memorandum
(d). Checklists"
II. "The susceptibility of an assertion to a misstatement that could be material before consideration
of any related control is………………:-

(a). Control Risk
(b). Inherent Risk
(c). Audit Risk
(d). Significant Risk"
III. "Statement 1: Audit procedures consist of Risk Assessments Procedures and other procedures.
Statement 2: Substantive procedures consist of test of details and analytical procedures.

(a). Only Statement 1 is correct
(b). Only Statement 2 is correct
(c). Both 1 & 2 are correct
(d). Both 1 & 2 are incorrect"
IV. " …………….. refers to the audit procedures performed to obtain an understanding of the entity
and its environment, including the entity’s internal control, to identify and assess the risks of
material misstatement, whether due to fraud or error at the financial statement and assertion
levels:-
(a). Analytical Procedures
(b). Risk Assessment Procedures
(c). Audit Procedures

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