Audit of Autonomous Bodies

  1. One of the essential requirements of Section 20(1) is that audit can be entrusted to the CAG
    1. Only in public interest
    2. Only if the Central or State Government feels the necessity to entrust the audit work to CAG
    3. Only if the president or governor feels that autonomous body is not well managed and there are sufficient ground justifying the entrustment of audit to CAG
    4. Only if the president or governor of the State is of the opinion that no other audit would be sufficient to serve the legislative control over the autonomous body
  2. Which among the following provisions empower C&AG to conduct audit of bodies or authorities?
    1. Section 14 & 15 of the DPC Act
    2. Section 14, 15, 19 & 20 of the DPC Act
    3. Section 14, 19 & 20 of the DPC Act
    4. none of the above
  3. Which of the following is NOT a provision of the CAG's DPC Act that empowers it to take up the audit of autonomous bodies?
    1. Section 13
    2. Section 14
    3. Section 15
    4. Section 20
  4. Which among the following is incorrect as to Section 14 audit?
    1. If the grant or loan is from outside the consolidated fund, audit under section 14 is not possible
    2. Payments of purely deposit nature should also be regarded as expenditure
    3. The expenditure incurred on purchase of raw material, finished goods, disbursement of loans is treated as expenditure in respect of institutions running business
    4. none of the above
  5. The objectives of audit of accounts or audit of receipt & expenditure of bodies and authorities under section 14, 19 and 20 of the Act are:
    1. To check that transactions comply to relevant laws, rules and regulations
    2. To conduct the audit with the purpose of certification of annual accounts
    3. To conduct performance audit to assess economy, efficiency and effectiveness of various activities/programmes undertaken by these bodies.
    4. All of the above
  6. In practice the certification of annual accounts is undertaken under which of the following provisions of CAG's DPC Act?
    1. Section 19 and Section 20
    2. Section 20 only
    3. Section 13 and Section 14
    4. Section 14 and Section 15
  7. The objectives of audit of Autonomous Bodies by CAG is to conduct
    1. compliance audit
    2. financial audit
    3. Performance audit
    4. all of the above
  8. The parameter for examining the justification for Section 14(2) or 20(2) is
    1. control by the sanctioning agency is adequate
    2. the state of accounts is known to be satisfactory
    3. there is arrangement for audit by an agency outside the control of the institution
    4. these are persistent losses in respect of institutions undertaking manufacturing or trading activities
  9. In cases where CAG conducts super imposed audit
    1. It is also required to certify the accounts
    2. It is also required to certify the accounts if the chartered accountant who conducted the audit were appointed on the advise of the CAG
    3. It is also required to certify the accounts if the chartered accountant who conducted the audit were appointed from the panel of auditors prepared by the CAG
    4. Certification of accounts need not be done by CAG in cases where CAG is not the sole auditor
  10. The restriction with respect to right of access to the books and accounts under Section 15(2) is
    1. the autonomous body is not a foreign state or an international organization
    2. the President/Governor/Administrator relieve the CAG in public interest
    3. the law under which the corporation is established provides for audit by someone other than CAG
    4. All of the above
  11. Which is incorrect as to audit of autonomous body under Section 15
    1. It would be preferable to defer examination of accounts of the until its accounts are audited and certified
    2. Grants given for maintenance, purchase of specific items like land & building shall not be treated as specific purpose grants
    3. The objections should not be conveyed or corresponded with the autonomous body directly
    4. none of the above
  12. Audit under Section 19(3) of the DPC Act can be entrusted to CAG
    1. of a corporation established by a state or Union Territory Law
    2. Not of a corporation established under a state or Union Territory Law
    3. neither (a) nor (b)
    4. none of the above
  13. Which among the following is incorrect as to the requirement under Section 19(3)
    1. the decision to entrust audit will be of government
    2. It is obligatory that the autonomous body should concur with the decision
    3. It is necessary to convey to the Government the terms and conditions under which audit can be undertaken by CAG
    4. None of the above
  14. Audit under Section 20(1) is taken up
    1. for the purpose of certification of annual accounts
    2. the certification of accounts also includes performance audit
    3. To issue separate Audit, Report containing only comments on accounts’
    4. All of the above
  15. The underlying assumption while preparing the common format of accounts is
    1. Accrual system of accounting
    2. The entity is viewed as a going concern
    3. both (a) and (b)
    4. none of the above
  16. Find out the correct statement
    1. The going concern has the intention of curtailing materially the scale of its operation
    2. The transactions and events shall be governed by merely by the legal form in the Balance Sheet
    3. The excess of the provision over the amount of reasonably anticipated loss is treated as a reserve
    4. none of the above
  17. Revenue shall not be recognized unless
    1. no significant certainty exists regarding the amount of the receivable consideration
    2. the related performance has been achieved
    3. it is not reasonable to expect realization and ultimate collection of the amount of revenue
    4. none of the a bove
  18. What is the common assertion underlying income statement items and Balance Sheet items
    1. occurrence
    2. ownership
    3. Regularity
    4. Disclosure
  19. Find out the incorrect statement
    1. Materiality should be determined with reference to overall audit assurance
    2. Risk is concerned with the likelihood of error
    3. materiality is concerned with the extent to which we can tolerate error
    4. none of the above
  20. Match the following
  21. (A) Inherent Risk(A) will not be detected on a timely basis by the internal controls
    (B) Internal Control Risk(B) is the inverse of overall audit assurance
    (C) Dection Risk(C) is the material error occurring in first place
    (D) Overall Audit Risk(D) is the inverse of the required assurance level from substantive tests
    1. A-B;B-A;C-D;D-C
    2. A-C;B-A;C-D;D-B
    3. A-C;B-D;C-B;D-A
    4. A-B;B-D;C-A;D-C
  22. System based audit (SBA) is an audit approach
    1. which may be used by an external auditor to express an opinion on the financial statements
    2. where the auditor decides that he can not place some reliance on the internal controls
    3. where the auditor do more substantive testing if he took no assurance at all from auditee’s internal control
    4. none of the above
  23. Which among the following is the essential feature of statistical sampling
    1. sampling should be predictable
    2. The sample results need not be in accordance with the probability theory
    3. the sample items should have known probality of selection
    4. none of the above
  24. Match the following various types of sampling
  25. (A) Stratified sampling(A) the sample is chosen by selecting a random starting point and then picking every sample interval
    (B) Cluster sampling(B) sampling assigns higher inclusion probability of selection for population units with higher sizes
    (C) Probability proportional to size (PPS)(C) the target population is first divided into mutually exclusive and collectively exhaustive clusters
    (D) Systematic sampling(D) is a two-step process in which the population is partitioned into sub- populations
    1. A-D;B-A;C-B;D-C
    2. A-D;B-C;C-B;D-A
    3. A-B;B-A;C-D;D-C
    4. A-C;B-D;C-B;D-A
  26. What is true as to Analytical Review as substantive audit techniques
    1. It is a substantive procedure used to reduce the overall audit risk
    2. It is a form of deductive reasoning
    3. to detect monetary errors in the financial statements given that they have occurred
    4. All of the above
  27. The certificate that the auditor should obtain from the management is
    1. Stock in transit
    2. contingent liabilities
    3. work in progress with processors
    4. all of the above
  28. The separate Audit Reports (SAR) of Autonomous Bodies should contain
    1. Introduction
    2. Comments on accounts
    3. Impact of comments on accounts
    4. All of the above
  29. In addition to ‘comments on accounts’ the SAR may include
    1. cases where assurances for rectification are fulfilled after a couple of years
    2. corrections/rectifications carried out at the instance of audit
    3. compliance of accounting standards/instructions contained in the common Format of Accounts
    4. none of the above
  30. Management letter includes
    1. Errors in annual accounts that are not considered material
    2. Reconciliation between the balances as per broadsheets and as reflected in the accounts
    3. classification errors within the accounting head where management has assured rectification
    4. All of the above
  31. Find out the incorrect statement performance audit of regulatory bodies
    1. The audit of accounts of Electricity Regulatory Commissions and Audit Report thereon would include performance audit
    2. The orders passed by the commissions in exercise of quasijudicial functions would not be within the scope of Audit
    3. The decisions of the Authority that are appealable to the Appellate tribunal are subject to audit by CAG
    4. none of the above
  32. The broad objective of quality assurance is to ensure
    1. controls are in place at all stages of the audit cycle including planning, execution and reporting
    2. controls are properly implemented
    3. inbuilt mechanism to constantly review and update the control exists
    4. All of the above


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