Page 152 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

The engagement partner also discussed with his team regarding the areas to be covered while
conducting the audit of receipts. The reporting responsibilities of the engagement team were also
discussed by the engagement partner with his team.

Based on the above facts, answer the following:-
I. Statement 1: Government audit provides public accounting of operational, management programme
and policy aspects of public administration as well as accountability of officials administering them.
Statement 2: Government audit is equipped and intended to function as an investigating agency, to
pursue every irregularity or misdemeanour to its logical end.
(a) Only statement 1 is correct
(b) Only statement 2 is correct
(c) Both 1 & 2 are correct
(d) Both 1 & 2 are incorrect
II. ___________ is conducted to ensure that the various programmes, schemes, and projects where large
financial expenditure have been incurred are run economically and are yielding results expected of
them:-

(a) Propriety audit
(b) Audit against Rules and orders
(c) Performance Audit
(d) Audit against Provision of funds

III. While conducting audit against provision of funds, the statutory auditors, M/s Suresh Rana &
Associates must check:-
(a) That each item of expenditure is covered by a sanction either general or special of a competent
authority.
(b) That the expenditure incurred has been on the purpose for which the grant and appropriation
has been provided and the amount of expenditure does not exceed the appropriation made.
(c) That the expenditure conforms to the relevant provision of the constitution.
(d) That the expenditure is in accordance with the financial rules, regulations and orders issued by
the competent authority.
IV. Which part of expenditure audit covers the scrutiny of the expenditure incurred on the construction
of stockyard by the company which is considered as infructuous and avoidable by CA Suresh Rana?
(a) Propriety Audit
(b) Audit against provision of funds
(c) Audit of sanctions
(d) Performance Audit
V. While conducting the audit of receipts of HAIL Ltd., which of the following area is to be covered as part
of Audit of Receipts?

1. Whether all revenues or other debts due to government have been correctly assessed, realised and
credited to government account by the designated authorities of HAIL Ltd.
2. Whether adequate checks are imposed to ensure the prompt detection and investigation of
irregularities, double refunds, fraudulent or forged refund vouchers or other loss of revenue through
fraud or willful omission or negligence to levy or collect taxes or to issue refunds.
3. Whether the expenditure incurred has been on the purpose for which the grant and appropriation
had been provided and that the amount of such expenditure does not exceed the appropriation
made.
4. Whether the various schemes/projects are executed and their operations conducted economically
and whether they are yielding the results expected of them.
(a) Only statement 1 is correct
(b) Statements 1 & 2 are correct
(c) Statements 1,2,3,4 are correct
(d) Statements 1,2,3 are correct

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