Page 307 - CA Inter Audit PARAM

CA Ravi Taori

Reporting Responsibilities of CA L/ concerning the financial statements of Bro Traders LLP is as follows:
(a) The auditor should mention (a) Whether the records of the firm appear to be correct & reliable.
(b) Whether he was able to obtain all information & explanation necessary for his work.
(c) Whether any restriction was imposed upon him.

QNO Audit of Partnership Firm (Advantages) - Old Course— (N21R/M19M/N23R)
ADE.60 Bhaskar CNO – ADE.160
State six important advantages of audit of accounts of a Partnership firm.
Answer ➢ Advantages of Audit of a Partnership Firm –
On broad considerations, the advantages of audit of accounts of a partnership could be stated as follows:

• Audited statement of accounts is relied upon by the banks when advancing loans, as well as
by prospective purchasers of the business, as evidence of the profitability of the concern and
its financial position
• An audit is an effective safeguard against any undue advantage being taken by a working
partner or partners especially in the case of those partners who are not actively associated
with the working of the firm.
• Audited accounts provide a convenient and reliable means of settling accounts between the
partners and, thereby, the possibility of occurrence of a dispute among them is mitigated. On
this consideration, it is usually provided in and accepted by the partners, shall be binding upon
them, unless some manifest error is brought to light within a specified period subsequent to
the accounts having been signed.
• Audited statements of account can be helpful in the negotiations to admit a person as a
partner, especially when they are available for a number of past years.
• On the retirement or death of a partner, audited accounts, which have been accepted by the
partners, constitute a reliable evidence for computing the amounts due to the retiring partner
or to the representative of the deceased partner in respect of his share of capital, profits and
goodwill.
Author’s Note:
Following questions have the same answer, so it is advisable to remember only one answer as given in CNO-
COA.05 and reproduce it everywhere.
• Advantages of independent audit
• Advantages of audit of partnership firm.
• Advantages of Sole trader

QNO Audit of an NGO Audit Planning & Procedure- Old Course –
(P16M/N17M/N20R/M21M/SM17/N19E/
ADE.70 Bhaskar CNO – ADE.120
N20E/SM20/SM21/N21R/M23M/M23E)
New Course – (SM25/N23E)
Explain the audit procedure for conducting the audit of a Non-Governmental Organisation (NGO).
OR
You have been appointed as an auditor of an NGO, briefly state the points on which you would concentrate
while planning the audit of such an organisation?
OR
In the case of audit of a charitable institution, what attentions should be paid by auditor regarding audit of

expenditure items?
OR
st
On 1 May 2022, NGO has been founded with the objective of disaster relief registered under section 8 of
the Companies Act, 2013. In addition to corpus contribution, substantial foreign contributions also have
been received by NGO. You have been appointed as the first auditor of the said NGO for the F.Y. 2022-23.
While planning the audit of NGO, which points you will focus upon? Mention any four such points
Answer ➢ Law & Internal Control System
www.auditguru.in 9.33