Page 160 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(d) Planned inquiry and visit fall in scope of audit programme.
IV. What is detailed set of instructions given to assistants in engagement team known as?
(a) Audit guidelines
(b) Audit plan
(c) Audit Programme
(d) Audit Procedures
V. The issue of generation of scrap has been overlooked in detailed set of instructions given to
engagement team. What should be proper course of action by CA Simran Kaur?
(a) She should ignore this information as audit has already begun.
(b) She should modify earlier set of instructions.
(c) She should leave the matter to wisdom of engagement team.
(d) She should put the ball in court of management as she was not provided with complete
information earlier

66. (M23R/SM23)
CA Rajan Pillai is heading the engagement team conducting audit of a company. While audit is in
progress, consider following issues regarding audit documentation:-

(A) Audit programme was prepared assigning responsibilities for different types of works to be
performed to team members. The engagement team consists of 4 members Mohit (CA final
student), Rohit (CA final student), Shobhit (Paid CA) and CA Rajan Pillai (partner of audit firm).

(B) The team has determined materiality for financial statements as a whole. The team has assessed
risks of material misstatements to be low.

(C) CA Shobhit is responsible for attending inventory count process and putting down its
documentation part.

(D) During the course of audit, many related party transactions have come to notice.
I. Work relating to verification of revenue was assigned to Mohit in audit programme. However, it
is being performed by Rohit actually. Verification of trade receivables was planned to be carried
out by Rohit in audit programme. However, it being performed by CA Rajan Pillai due to last
minute practical issues. Which of the following statements is most appropriate in this regard
relating to audit documentation?
(a) Audit programme contains names of persons and work to be performed. It is immaterial
whether work assigned to one person is performed by another person.
(b) Audit programme was already prepared. Only persons assigned specific responsibilities can
perform those duties.
(c) It is necessary that audit programme be suitably updated or notes are given in working
papers to this effect so that planned duties are in accordance with actual work performance.
(d) Changes in audit programme or notes clarifying the matter are required only when a person
not forming part of engagement team is deputed to perform a duty. Otherwise, this issue of
inter-shuffling of team members is frivolous
II. As regards materiality, which of the following statements is most appropriate in context of audit
documentation?
(a) Materiality has already been determined. There is no need to put it into working papers.
(b) Materiality depends upon professional judgment of auditor. Whatever amount has been
determined can be documented in working papers.
(c) Materiality arrived on basis of professional judgment along with factors considered in the
determination has to be documented.
(d) Materiality has been arrived upon professional judgment. It also depends upon professional
judgment of auditor whether he wants to document it or not.
III. As regards team’s assessment that risk of material misstatements is low, which of the following
statements is odd one relating to documentation of risk?
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