Page 183 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(d) The securities premium account can be applied by the company for the purchase of its own
shares or securities under section 68.

II. Which of the following is not an example of capital reserve?
(a) Revaluation reserve arising from revaluation of fixed assets
(b) Securities Premium
(c) Capital redemption reserve
(d) General reserve
III. Statement 1: Confirmations as well as undelivered letters should be given/ returned to the
auditor and not to the client.
Statement 2: When no reply is received, the auditor should perform alternate procedures
regarding the balances.
(b) Only statement 1 is correct
(c) Only statement 2 is correct
(d) Both statements 1 & 2 are correct
(e) Both statements 1 & 2 are incorrect
IV. Mr. Chetanya performed which of the following analytical procedures to obtain the audit
evidence with respect to the overall reasonableness of purchase quantity and price of raw
material?
(a) Consumption Analysis
(b) Stock Composition Analysis
(c) Reasonableness test
(d) Ratio analysis
V. Which of the following is not correct with respect to the disclosure requirements of Schedule III
to the Companies Act 2013?
(a) Current maturities of long term borrowings is to be disclosed under the head long term
borrowings
(b) Long term maturities of finance lease obligations is to be disclosed under the head long term
borrowings
(c) Interest accrued but not due on borrowings is to be disclosed under the head Other Current
Liabilities
(d) Interest accrued and due on borrowings is to be disclosed under the head Other Current
Liabilities

Chapter 06

85 (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.

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