Page 125 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(c). Haphazard Sampling
(d). Cluster Sampling

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"Auditors while conducting audits are governed by SA 230 “Audit Documentation” in relation to record
of audit procedures performed, relevant audit evidence obtained, and conclusions the auditor reached.
CA. Harry is a statutory auditor of Potter Ltd. The auditor of Rowling Ltd. a parent company of Potter
Ltd. asked Harry the working papers of Potter Ltd for commenting on the important requirement of the
Central Government.

Also, CA. Bean is statutory auditor of Rowling Ltd. against which Income tax department started search
and seizer procedure .CA. Bean was asked for the working papers of the company on the directions and
permission of CIT (A) to provide for the relevant information asked.

Based on the above specific cases and in general, answer the following questions as per guidance
provided by SA 230."
I. " _______ is the file containing the records and data that comprise the audit documentation for
a specific engagement.
(a). Audit file
(b). Engagement file
(c). Working file
(d). Client’s file
II. "Which of the following does not affects form, content & extent of documentation

(a). Size and complexity of the entity
(b). nature of audit team who will perform audit
(c). identified Risk of material misstatement
(d). audit methodology and tools to be used
III. "If in exceptional circumstances the auditor departs from Standards on Auditing, he
shall___________ #Unique
(a). Document the reason for departure
(b). document how the alternative procedures were performed for achieving the objective
(c). Both (a) and (b)
(d). Auditor is not allowed to depart from SAs.
IV. "Which of the following is not true of working papers?
(a). They record the audit evidence to provide support for the auditor’s opinion
(b). They assist in review of the audit work
(c). They are a direct aid in the planning of the audit
(d). They provide proof of the correctness of the financial statements.
V. "Can CA. Bean provide access to working papers to Income Tax department during search &
seizure operation? #Unique
(a). CA. Bean can provide as it is the requirement of law
(b). CA. Bean is guilty of professional misconduct
(c). CA. Bean should not provide the working paper
(d). None of the above

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"Cheenu & Co are the auditors of a manufacturing industry. During the course of the audit, the following
are the observations:
(a) Due to paucity of time, one of the partners of Cheenu & Co. suggests that the team may
complete the audit procedures and issue the audit report. They may carry out the audit
documentation at a later stage.

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