Professional Documents
Culture Documents
Compiled by: Pankaj Garg (CA, CS, CWA All India Topper, Gold Medalist)
SA 200 (Revised) Overall Objectives of the Independent Auditor and Conduct of Audit in
accordance with SAs
Q. No. 1
Q. No. 2
Q. No. 3
Q. No. 4
Q. No. 5
Q. No. 6
Q. No. 8
Q. No. 9
What is an audit engagement letter? What are the principal contents of audit engagement letter.
or
Draft an engagement letter accepting the appointment as auditor.
Write short note on: Preconditions for an audit
Comment on the following: It is not mandatory to send a new engagement letter in recurring
audit, but sometimes it become mandatory to send new letter. Explain those situations where
new engagement letter is to be sent.
Comment on the following: The work performed by each assistant needs to be reviewed by
personnel of at least equal competence
Write short note on: Engagement Quality Control review.
As an auditor how would you deal with the following: The statutory auditor of the holding
company demands for the working paper of the auditors of the subsidiary company, of which
you are the auditor.
Comment on the following: Management is responsible for compliance with Laws and
regulations.
As an auditor what are the indicators you would consider while verifying compliance with laws
and regulations.
State briefly the reporting requirements as per SA 260 on non-compliance with laws and
regulations.
Explain the various matters that are required to be communicated by the auditor to TCWG.
As per SA 260, auditor is required to communicate with TCWG various matters significant to
audit In this reference explain various forms of communication and factors affecting mode of
communication.
What do you mean by deficiencies in Internal Control. Explain various indicators of Significant
deficiencies.
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A joint auditor is not bound by the views of the majority of the joint auditors regarding matters
to be covered in the report. Justify the statement in the light of SA 299.
Q. No. 21
Q. No. 22
Comment on the following: ABC & Co. and DEF & Co. Chartered Accountant firms were
appointed as joint auditors of Good Health Care Ltd. for 20089-10. A special audit was
conducted U/s 233A of the companies Act 1956 during March 2011 and observed gross
understatement of Revenue. The revenue aspects were looked after by DEF & Co, but there
was no documentation for the division of work between the joint auditors.
Write short note on: Factors to be considered in the development of overall audit plan.
Q. No. 24
Q. No. 25
Comment on the following: Auditor shall establish an overall strategy that sets the scope,
timing and direction of the audit, and that guides the development of the audit plan.
SA 315 identifying and Assessing the Risk of material Misstatements through understanding
the Entity and its Environment
Q. No. 26
What are the points to be remembered while evaluating the knowledge of the business in the
conduct of an audit?
or
Auditor is required to identify and assess Risk of material misstatement through understanding
the entity and its environment. Explain the various matters of which auditor should obtain
understanding.
Q. No. 27
Q. No. 28
Q. No. 30
As per SA 402, the user auditor shall obtain an understanding of how user entity uses the
services of a service organisation in the user entity operations Explain the various matters of
which understanding is required.
Q. No. 33
In the course of audit of R Ltd. the audit manager of ABC & Co. observed that R Ltd. has
outsourced certain activities to an outsourcing agency. As the engagement partner guide the
audit manager in the assessment of services provided by the outsourcing agency in relation to
the audit.
Q. No. 2
Y Ltd. Engaged an actuary to ascertain its employee cost, gratuity and leave encashment
liabilities. As the auditor of Y Ltd. You would like to use the report of actuary as audit evidence.
How do you evaluate the work of Actuary.
Q. No. 3
Q. No. 4
Explain the procedures to be performed by auditor to obtain sufficient and appropriate audit
evidence regarding the existence and condition of inventory.
Q. No. 2
Explain the auditors procedures w.r.t. determination of existence and condition of inventory
under the following circumstances:
(a) Inventory count conducted at a date other than balance sheet.
(b) To attend the inventory is impracticable.
Q. No. 2
Comment on the following: Negative confirmation provides less persuasive audit evidence
than positive confirmation.
Management of X Ltd. request you not to seek confirmation from its debtors. As the auditor of
X Ltd. what can be appropriate response.
Q. No. 3
What are the audit procedures to be followed by a statutory auditor in the audit of opening
balances if the financial statements for the preceding year were audited by another auditor.
While planning the audit of X Ltd, you want to apply sampling techniques. What are the risk
factors you should keep in mind.
Or
The auditor is faced with sampling risk in both tests of control and substantive procedures.
Comment on this statement with reference to SA 530 on Audit sampling.
SA 540 Auditing Accounting Estimates, including Fair Value Accounting Estimates and related
Disclosures
Q. No. 1
While auditing X Ltd, you observe certain material financial statement assertions have been
based on estimates made by the management. As an auditor how do you identify and assess
risk of material misstatement.
As a statutory auditor how do you verify the existence of Related Parties and disclosures of
Related Party Transactions.
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Explain the procedures to be performed by the auditor in expressing opinion on going concern
assumption.
What are the financial indicators to be considered by an auditor for evolution of the going
concern assumption.
There should be a sufficient liaison between a principal auditor and other auditors. Discuss
the above statement and state in this context the reporting consideration, when the the
auditor uses the professional work performed by other auditor.
Q. No. 2
You have been appointed auditor of a large Industrial Company which has an established
Internal Audit Department. You are required to state the main aspects that would be
considered to find out effectiveness of the department.
Explain the following: Relationship between Statutory auditor and Internal Auditor.
Or
Can the statutory auditor rely upon the work of an internal auditor?
Q. No. 2
Q. No. 3
While doing audit, Ram, the Auditor requires reports from experts for the purpose of audit
evidence. What types of reports/opinions he can obtain and to what extent he can rely upon
the same?
What are the procedures to be followed by a statutory auditor for verifying the provisions for
accrued liability for retirement benefits which is based on a certificate of a reputed actuary
engaged by the auditor for the purpose.
State your views on reference to an expert in the Auditor's report.
SA 706 EOM Paragraph and Other Paragraphs in the Independent Auditors Report
Q. No. 1
What is Emphasis of Matter Paragraph. State the circumstances when EOM Para can be
included in Auditors Report.
Q. No. 2
Comment on the following: While reading the other information, auditor finds certain
misstatement which requires revision of audited financial statements, but management
refuses.
Comment on the following: While reading the other information, auditor finds certain
misstatement which requires revision of other information but management refuses.
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