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