Page 114 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
IV. " What is the initial perception of control risk as far as Sales Transactions are concerned? #Unique
(a). High
(b). Medium
(c). Low
(d). Non-existent
V. "To satisfy about the genuineness of Balances of Debtors outstanding for more than 180 Days,
M/s CA & Co would have to lower which risk?
(a). Inherent Risk
(b). Detection Risk
(c). Control Risk
(d). All of the above"

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"Sections 139 to 148 of the Companies Act, 2013 relating to audit of companies which broadly deal with
who can be appointed as an auditor under the Act, i.e., qualifications and disqualifications, the manner
of appointment, removal of an auditor and rights and duties of an auditor.

Keeping above mentioned sections in mind, what guidelines/procedures need to be followed by M/s
ABC Ltd and Mr Samuel when M/s ABC Ltd appointed Mr Samuel as statutory auditor of the company
for the Financial Year 2019-2020.

Samuel’s father holds security of Rs 7 lakh face value in ABC Ltd. Would this throw any challenges to
Samuel’s appointment as statutory auditor of M/s ABC Ltd.

Also, Mr Samuel’s remuneration was fixed by Board of Directors which was subsequently challenged by
a shareholder in the company’s Annual General Meeting.

Based on the above facts and procedures, answer the following questions."
I. "Mr Samuel needs to furnish his written consent and a certificate to the company
(a). Before his appointment
(b). Within 15 days of his appointment
(c). Within 30 days of his appointment
(d). None of the above"
II. "Mr Samuel (the auditor of the company) subsequently submitted his resignation. He is required
to intimate about his resignation to-
(a). The Company
(b). The Registrar of Companies
(c). Both a and b.
(d). Board of Directors, Registrar of Companies and Central Government"
III. "Mr Samuel needs to file a statement in the prescribed Form _____ (as per Rule 8 of CAAR) within
______ days of resignation with the company and the registrar.
I. ADT- 1, 10
II. ADT- 2, 7
III. ADT – 3, 30
IV. ADT - 4, 15
IV. "If Mr Samuel had been removed as auditor of the company under section 140(5) by order of
Tribunal, he could not be appointed as auditor of any company for a period of ______from the
date of order of Tribunal.
(a). 10 years
(b). 8 years
(c). 5 years
(d). 3 years
V. "Mr Samuel’s remuneration as auditor of M/S ABC Ltd will be fixed by

(a). By Board of Directors of the company
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