Page 122 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
III. "Mr Kapoor’s loan account as per the above case is -
(a). Overdue
(b). SMA 01
(c). Doubtful asset
(d). Out of Order
IV. "The loan sanctioned to Sakhi Cooperative Society in the above case should be categorized as
_____ for the purpose of Provisioning of Assets but/and deemed/taken to be as _______ for the
purpose of Income recognition by the Bank , respectively.
(a). NPA ; NPA.
(b). NPA ; Standard.
(c). Standard ; NPA.
(d). Standard ; Standard.
V. "The loan sanctioned to Vishwas NGO in the above case should be categorized as _____ for the
purpose of Provisioning of Assets but/and deemed/taken to be as _______ for the purpose of
Income recognition by the Bank , respectively.
(a). NPA ; NPA.
(b). NPA ; Standard.
(c). Standard ; NPA.
(d). Standard ; Standard

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"Mr. Balwant Singh, the MD of Suvidha Stores Ltd., has requested CA Arun Kumar to carry out the
Statutory Audit of his Store’s Head office at Pune. On a discussion w.r.t. the terms of Engagement of the
Audit, Mr. Balwant tells CA Arun that he smells something fishy going on in the Accounts department
and wants CA Arun to report keeping susceptibility of Fraud as per SA-240 in mind. CA Arun tells MR.
Balwant that Fraud results from material misstatements arising either due to Fraudulent Financial
Reporting or Misappropriation of Assets. He also tells him about the various Fraud Risk Factors which
form the reason behind Commitment of Fraud by the employees and also tells him about his reporting

procedure. On scrutiny of the accounts of the Company and after discussing with the employees at the
Head office, CA Arun notes down following observations:-
1. Mr. X, the Head Accountant seems to have colluded with the Cashier Mr. Y.
2. Mr. X has reported higher than usual profits in the books of accounts because apart from his salary,
he also receives incentives based upon the profits earned by the Co.
3. Mr. Y, the Cashier has shown some bogus expenses which have not actually been incurred.
4. CA Arun estimates the amount involved in Fraud to be ₹ 5 crores."
I. "Fraud in the above case scenario has been committed by resorting to which of the following
Material Misstatements identified during the audit:-
(a). Fraudulent Financial Reporting
(b). Misappropriation of Goods
(c). Defalcation of Cash
(d). Either (b) or (c)"
II. "The Fraud Risk Factor behind committing of Fraud by Mr. X in the above case was:-

(a). Incentives or Pressure
(b). Rationalization
(c). Perceived Opportunity
(d). Adventure
III. "How has the Fraud been Committed by Mr. X ?
(a). Manipulation/Falsification
(b). Misrepresentation
(c). Intentional Misapplication of Application Accounting Principles
(d). Error

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