Page 165 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
II. to cover all the units of the company based at Delhi and Indore.
III to check whether the relevant disclosures are properly made in the financial statements

(a) I,II,III
(b) I,II
(c) II,III
(d) I,III
II. What is the name of the method used by the auditor for segregation of accounts receivable?
(a) Value weighted selection
(b) Stratification
(c) Systematic method of Sampling
(d) Tests of Control
III. The aspects covered by auditor should be:
(a) i, ii, iii, x, vi, vii
(b) i, ii, iv, v, vi, vii.
(c) i, ii, iii, iv, v, vi, vii, viii, ix, x, xi.
(d) ii, iii, viii, x, xi
IV. The auditor’s vigilance to question the audit evidence that contradicts the other audit evidence
is called as:
(a) Professional Skepticism
(b) Vigilant Skepticism
(c) Professional Judgement
(d) Judgement and Skepticism
V. With respect to the preconditions for an audit, which one of the following is correct:
I. The use by Management of an acceptable financial reporting framework in the preparation of
financial statements.
II. Management’s responsibility for the internal control
III. Giving auditor access to all information and access to the Entity’s premises.
(a) I, II
(b) I, II, III
(c) II, III
(d) I, III

71. (N23R)
Kartik, a CA student undergoing his articled training, is part of an engagement team conducting
statutory audit of MSE Auto Private Limited, a company engaged in manufacturing of automobile spare
parts. The company has its manufacturing facilities located in Pimpri- Chinchwad industrial belt near
Pune. It is a profit making company and one of the most sought after by banks in the area due to its
good track record. The following is extract of financial information taken from its pre-audit financial
statements for year 2022-23. Figures have been rounded off in ₹ 000’s.

Particulars Year 2022-23 Year 2021-22
Share capital 2500.00 2500.00
Long term borrowings 0.00 15000.00
Short term borrowings 55000.00 15000.00
Inventories 35000.00 27000.00
Trade receivables 60000.00 25000.00
Revenue from Operations 300000.00 100000.00
Profit before tax 60000.00 18000.00

While going through schedule of long term borrowings and books of accounts, he finds that reduction
of long term borrowings of the company is on account of full payment of a term loan in month of April
2022 taken from a bank in past. However, he finds that charge in respect of above term loan in favour

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