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CA RAVI TAORI CA INTER AUDIT MCQs

b) Recalculation
c) Re-performance
d) Observation

500.17 N23M
While auditing the books of accounts of Mehra Limited for the financial year 2022-23, the auditor
of the company used an audit procedure according to which complete documents and records of
the company were checked in detail in order to obtain audit evidence. Explain the audit procedure
used by the auditor of company.

a) Recalculation
b) Analytical Procedures
c) Inquiry
d) Inspection

Part 02-SA 501

501.1 M19R
Coyote Ltd. is dealing in trading of electronic goods. Huge inventory (60% approximately) of the
company is lying on consignment (i.e. under the custody of third party). CA. Star, the auditor of the
company, wants to obtain sufficient appropriate audit evidence regarding the existence and
condition of the inventory lying on consignment. Thus, he requested & obtained confirmation from

the third party as to the quantities and condition of inventory held on behalf of the entity, however,
it raised doubts about the integrity and objectivity of the third party. Which of the following other
audit procedures may be performed by CA. Star to obtain sufficient appropriate audit evidence
regarding the existence and condition of the inventory under the custody of third party?
a) Attend third party’s physical counting of inventory.
b) Arrange for another auditor to attend third party’s physical counting of inventory.
c) Inspect warehouse receipts regarding inventory held by third parties.
d) All of the above.

501.2 M19M/SM21
The auditor shall design and perform audit procedures in order to identify litigation and claims

involving the entity which may give rise to a risk of material misstatement, including:
a) Inquiry of management and, where applicable, others within the entity, including in-house legal
counsel.
b) Reviewing minutes of meetings of those charged with governance and correspondence
between the entity and its external legal counsel.
c) Reviewing legal expense accounts
d) All of the above

Part 03 - SA 505

505.1 #Unique M19R
While auditing the accounts of Thought Co. Ltd., CA. Bliss, the auditor of the company came across
certain account’s payable balances for which direct confirmation procedure needs to be applied.
Thus, for the year ending 31st March 2018, he sent positive confirmation requests wherein the trade
payables are requested to respond whether or not they are in agreement with the balance shown.
The auditor received all the confirmation replies from the trade payables on time as correct except
from five of them. What other option the auditor is left with regard to trade payables from which
no reply for confirmation requests received?

a) Perform additional testing which may include agreeing the balance to subsequent cash paid

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