Page 169 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
Other current liabilities as on 31/3/23 include TDS payable of ` 1.00 lac (out of which ₹ 0.60 lac for month
of Feb 23 was due for deposit on 7.3.23). The balance Rs 0.40 lac pertains to month of March 2023.

You are part of engagement team conducting audit of AAF Private Limited. As part of assigned work,
you are also responsible for providing information/input to your senior for reporting under CARO, 2020
for financial year 2022-23.
I. Considering description about short-term borrowings in the case study, which of following
statements is in accordance with CARO, 2020?
(a) The statutory auditor is required to provide details of differences in quarterly statements filed
with bankers with its books of accounts.
(b) The statutory auditor is required to provide details of differences only in respect of those
quarterly statements where there is discrepancy of more than 10% as compared to its books
of accounts.
(c) The statutory auditor is not required to provide details of differences as reporting requirement
is triggered only when working capital limits have been sanctioned in excess of ₹ 10 crore
during any point of time of the year.
(d) The statutory auditor is not required to provide details of differences, as at end of year, books
of accounts are in agreement with quarterly statement filed.
II. The company has not paid one instalment of ₹ 5 lakhs on time which is overdue for more than 65
days as on balance sheet date. Identify likely correct statement in this regard in relation to
reporting under CARO, 2020: -
(a) The account has not become NPA as on 31.3.23. Hence, there is no reporting requirement.
(b) The reporting requirement is necessary only when company is declared a wilful defaulter by
Bank. In the given situation, there is no reporting requirement.
(c) Amount of default along with period of default is required to be reported.
(d) The reporting requirement is necessary only when company has diverted amount of term loan
for some other purpose. In the given situation, there is no reporting requirement.
III. As regards TDS payable of ₹ 1.00 lakh included in other current liabilities, what input would be
provided by you to your senior for reporting under CARO, 2020?
(a) TDS payable of ₹ 1.00 lac in financial statements shall not be reported as it does not meet
necessary reporting requirements.
(b) It is in nature of undisputed statutory dues. Hence, outstanding amount of ₹ 1.00 lac not
deposited is to be reported.
(c) It is in nature of undisputed statutory dues. However, only outstanding amount of ₹ 0.60 lac
not deposited is to be reported.
(d) TDS payable of ₹ 1.00 lac does not fall under meaning of “undisputed statutory dues”. Hence
there is no question of reporting.
IV. Which of following is not a reporting duty of statutory auditor regarding Property, Plant and
Equipment reflected in company’s financial statements under CARO, 2020?
(a) whether the company is maintaining proper records showing full particulars, including
quantitative details and situation of Property, Plant and Equipment
(b) whether Property, Plant and Equipment have been physically verified by the management at
reasonable intervals; whether any material discrepancies were noticed on such verification
and if so, whether the same have been properly dealt with in the books of account.
(c) whether Property, Plant and Equipment have been physically verified by the auditor during
the year; whether any material discrepancies were noticed on such verification and if so,
whether the same have been properly dealt with in the books of account.
(d) whether tittle deeds of all immovable properties (other than properties where company is
lessee and lease agreements are duly executed in favour of the lessee) disclosed in the
financial statements are held in the name of the company
V. The company has reflected losses in its financial statements for year 2022-23 and 2021-22. Which
of following statements is likely to be correct in this regard while reporting under CARO, 2020 for
year 2022-23?

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