Page 188 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(a) Audit against provision of funds
(b) Propriety audit
(c) Performance audit
(d) Compliance audit
II. Keeping in view audit findings in respect of Haryana Power Generation Corporation Limited,
identify type of audit carried out.
(a) Audit of Government Company
(b) Audit against rules and orders
(c) Compliance audit
(d) Performance audit
III. Which of the following is the most appropriate statement in context of report tabled in
Parliament regarding administration of direct taxes?
(a) It is likely to be a report prepared for submission to the President under Article 151 of the
Constitution of India by Comptroller and Auditor General of India.
(b) It is likely to be a report prepared for submission to the Prime Minister Under Article 151
of the Constitution of India by an independent task force of experts.
(c) It is likely to be a report prepared for submission to the President under Article 151 of the
Constitution of India by Central Board of Direct Taxes.
(d) It is likely to be a report prepared for submission to the Prime Minister under Article 151 of
the Constitution of India by Central Board of Direct Taxes.
IV. Who is empowered to conduct “supplementary audit” in case of Radial finance Corporation
Limited, a government company?
(a) Central Government
(b) Another independent auditor appointed by CAG
(c) CAG
(d) Another independent auditor appointed by Ministry of Corporate Affairs
V. As regards comments of auditors specified in respect of audit report of above insurance company,
which of the following is likely to be most appropriate statement?
(a) Such are likely to be comments of test audit carried out by CAG.
(b) Such are likely to be comments in respect of directions to statutory auditor by CAG for
reporting on specific aspect of their audit work.
(c) Such are likely to be comments of supplementary audit carried out by CAG.
(d) Such are likely to be comments of statutory auditors in accordance with requirements of
Standards on Auditing

Chapter 10

89 (SM23)
CA M is conducting statutory audit of branch of MMC Bank. During the course of audit, it is noticed as
under:-
(i) Loans under “Kisan credit card” are given by Bank to farmers to meet their short-term credit needs
for cultivation of crops.

In respect of one agricultural advance classified under “Kisan Credit Card” having an outstanding
balance of ₹ 20 lacs as at year end, there is no transaction in account since last 90 days. The said
loan has been granted for cultivation of paddy which is harvested in a period of 3-4 months from
sowing. The branch has classified the said advance as “Standard asset”.

(ii) It is also observed that account of one borrower availing cash credit limit of ₹ 50 lacs was taken
over from another bank. The proposal was sanctioned by branch manager instead of immediate
next higher authority as required in “Manual of Delegation of Powers” of Bank.

(iii) It is noticed that head office of bank has flagged a savings account maintained in branch in which
interest was wrongly paid at higher rate due to wrong data feeding entry. Now, situation has been
rectified by debiting excess interest paid in the account. Since there was little balance in savings
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