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Assignment Assessment Report

Campus: Level: Module Name: Students Name: e-mail id & Mob No Stream PCL-II Audit Year/semester Assignment Type Assessors Name Reqd Submission Date Actual Submission Date Submitted to : Assignment B


Certificate by the Student: Plagiarism is a serious College offence. I certify that this is my own work. I have referenced all relevant materials. (Students Name/Signatures) Expected Outcomes Assessment Criteria Grade based on D,M,P,R system Feedback

General Parameters
Clarity Analytical ThinkingResearch DoneFormatting Presentation& Clear understanding of the concept Ability to analyze the problem realistically Research carried out to solve the problem Concise& clear thinking along with presentation

Subject Specific Parameters

1. 2. 3. Grades P M D Grade Descriptors A Pass grade is achieved by meeting all the requirements defined. Identify & apply strategies/techniques to find appropriate solutions Demonstrate convergent, lateral and creative thinking. Achieved Yes/No (Y / N)

Assignment Grading Summary (To be filled by the Assessor)


1. Case Study on checking of payroll records You are appointed as Payroll consultants by the Directors of XYZ Ltd. Directors of the company have suspicion regarding the irregularity in the payroll records of the company for last 8 to 10 months. As a payroll Consultant what checks you need to perform to ensure that there is no irregularity in the payroll records? 2. Case Study on checking of Bank Balances You are the statutory auditor of XYZ Ltd. The Company has 2 bank accounts and Bank Reconciliation Statements as on 31 March 2011 for both the bank account are given below for your reference and checking. Please mention test of controls you need to perform to check the bank reconciliation statements. 1. Bank Reconciliation Statement as on 31 March 2011 Bank Name: Maharashtra Bank Bank Account Number: 234566XXX Balance as per Bank Book (No movement in bank account from April 2010) Balance as per Bank statement 2. Bank Reconciliation Statement as on 31 March 2011 Bank Name: Cochin Bank Bank Account Number: 234599XXX Balance as per Bank Book Cheque Issued but not presented for payment Date 23/06/2009 24/06/2009 02/08/2009 02/11/2010 Party Name ABC Limited MNC Private Limited X & Company N&Y Private Limited Amount 8,760 9,890 10,500 87,654 Rs 6,45,889 Rs 16,50,000 Rs, 16,50,000

Balance as per Bank statement Rs. 7,62,693 ________________________________________________________________________________ 3. Case Study on Audit of Clubs Mention briefly important points which an auditor will consider while conducting the audit of a club.


Case Study on Audit of Hire Purchase Finance Company Enumerate the verification procedures in relation to audit of a Hire-Purchase Finance Company


Case Study on Audit of Plant & Machinery As an Internal Auditor for a large manufacturing concern, you are asked to verify whether there are adequate records for identification and value of Plant and Machinery, tools and dies and whether any of these items have become obsolescent and not in use. Draft a suitable audit programme for the above.


Case Study on Cooperative Housing Society A major part of the business of Cooperative Housing Society is to avail loans from Housing Finance Corporation and in turn give loans and advance to its members for construction of houses. Indicate matters that will receive your attention as auditor of the Cooperative Housing Society.


Case Study on Working Capital Crunch You have been appointed Management Auditor of a large manufacturing company suffering from working capital crunch. Enlist and discuss the related areas which you would probe into to overcome the companys problem. Application Based Questions 1. You are the auditor of NTY Ltd. for the year 201011. The inventory as at the end of the year i.e. 31.3.11 was Rs.2.25 crores. Due to unavoidable circumstances, you could not be present at the time of annual physical verification. Under the above circumstances how would you ensure that the physical verification conducted by the management was in order A Company has a branch office which recorded a turnover of Rs. 1,90,000 in the financial year 2004-05. No audit of the branch has been carried out. The statutory auditor of the company has made no reference of the above branch in his report. The total turnover of the company is Rs. 10 Crores for the year 2004-05.Give your comment on the same The rate of equity dividend declared and paid by the company are as follows: 15% 12% 12% The company has earned sufficient profit after tax in 2006-07 and wishes to proposed dividend on equity share @11% and proposes to transfer 12% of profits to reserves. No bonus shares have been issued during the last few years. The post tax profit in 2006-07 is higher than the corresponding profit of each of the previous three years. Will it make any difference if the company proposed a 20% rate of dividend.


3. 2003-2004 2004-2005 2005-2006 4.


ABC private limited is having only two members A&B during the audit of accounts for the year ended 31st March 2003, you as auditor find that: A, who is in-charge of purchases has introduced fictitious purchase bills of Rs 50 Lakhs. B, who is in charge of sales has sold goods worth Rs. 1 Crore without bringing the same in the books of accounts.You raise the matter with A&B in their capacity as directors. They contest that as this is a position known to them and within their own fold. You should not report the same under the Companies Act, 1956. Discuss whether the above arguments are acceptable under the Companies Act, 1956 for non-reporting. If not, state the reasons and the manner of reporting.


High Machine Ltd. Purchase two power capacitors for Rs 300,000 in the month of January 2009. No depreciation was provided in the accounts since both the machines were not drawn from the store, for installation purposes. These items were thus not used. As auditor of the company, what would be your reaction? Will you view be different if the capacitors were drawn from the stores and installed but not used due to strike/lockout of the factory? Comment. Excel Ltd is a manufacturing company in durable consumer goods with annual turnover of Rs 1,000 lakhs. The Company receives orders from its commission agents all over the country, but goods are dispatched directly to the customers. The documents including transport bills are sent through the bank for collection. At the end of 6 th Year, it is found that documents covering the dispatch of goods worth Rs. 100 lakhs were still lying with the banks not cleared by the customers even though the normal collection period of 20 days from the date of dispatch has expired. Should Revenue be recognized in the above case. A company has debited the Building Account with the cost of land on which the building stands and has provided for depreciation on such cost. How would you deal with the above. As a Statutory Auditor, how would you deal with the following ABC ltd commenced construction of a flyover in Mumbai in January, 2004 and the same was completed in February, 2005. Due to seasonal heavy rains in July, 2004 in the area, the work on the flyover had to be suspended for 1 month. The Company accordingly suspended borrowing costs of Rs. 12.50 lakhs for that month from capitalization. Your reply should be in line with Accounting Standard 16 Borrowing Cost.





You are the auditor of a limited company for the year 2007-2008 while reviewing the sundry creditor ledger; you observe certain unclaimed credit balances. The company desires to transfer the entire credit balances to the profit and loss account. Can the company proceed with the proposed presentation? If not suggest an alternative treatment in the accounts.