SUGGESTED ANSWERS

FOR

ADVANCED AUDITING – MODEL EXAM PAPER

1 (a) As per As – 26, “Intangible Assets”, research cost is to be expensed when incurred.
Further no Intangible Assets is created on account of publicity cost incurred on product
Proved to be a failure. Therefore publicity expenses also to be expensed. Rs.45 Lakhs
spent on publicity and research to be expensed in the year 2009 – 10.

(b) Refer Question No: 16 of “Company Audit” in Advanced Auditing Compilation, asked
in November, 2004 for 8 Marks.

(c) Refer Question No: 6(a) of “Company Audit” in Advanced Auditing Compilation, asked
in November, 2001 for 5 Marks.

(d) Refer Question No: 9(c) of “Company Audit” in Advanced Auditing Compilation, asked
in May, 2002 for 5 Marks.

2 (a) The Institute of Chartered Accountants of India by Notification No.1 CA (39) 70 has
specified that a member of the institute in practice shall be deemed to be guilty of
professional misconduct, if he accepts the appointment as an auditor of a company u/s
224 of the Companies Act, 1956 while he is an employee of the cost auditor of the
company appointed u/s 233 of the Companies Act, 1956. Therefore, Mr.Anil would be
guilty of professional misconduct.

(b) Refer Question No: 13 (b) of “Professional Ethics” in Advanced Auditing Compilation,
asked in May, 2005 for 4 Marks.

(c) Refer Question No: 18 (b) of “Professional Ethics” in Advanced Auditing Compilation,
asked in November, 2006 for 5 Marks.

(d) Refer Question No: 17 (b) of “Professional Ethics” in Advanced Auditing Compilation,
asked in May, 2006 for 4 Marks.

3 (a) (i) Refer Question No: 15 of “Peer Review” in Advanced Auditing of PADHUKA.

(ii) Refer Question No: 5 of “Miscellaneous Topics” in Advanced Auditing of PADHUKA.

(b) Refer Question No: 1 of “Audit under CIS Environment” in Advanced Auditing of
“Vinod Agarwal”

4 (a) Refer Question No: 5 (a) of “Internal Control” in Advanced Auditing Suggested
Answers, asked in November, 2007 for 8 Marks.

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 (b) Refer Question No: 6 of “Audit of Members of Stock Exchange” in Advanced Auditing
Suggested Answers, asked in November, 2008 for 5 Marks.

(c) Refer Question No: 5 (a) of “Audit of Public Sector Undertakings” in Advanced
Auditing Suggested Answers, asked in November, 2006 for 8 Marks.

5 (a) (i) Refer Question No: 59 of “Audit of Banks” in Advanced Auditing of PADHUKA.

(ii) Refer Question No: 71 of “Audit of Banks” in Advanced Auditing of PADHUKA.

(b) Refer Question No: 35 of “Investigations and Due Diligence” in Advanced Auditing of
PADHUKA.

(c) Refer Question No: 8 of “Audit of Insurance Companies” in Advanced Auditing

Suggested Answers, asked in November, 2006 for 4 Marks.

6 (a) Refer Question No: 4 of “Audit of Consolidated Financial Statements ” in Advanced

Auditing of PADHUKA.

(b) Refer Question No: 27 of “Audit of Committee and Corporate Governance” in

Advanced Auditing of PADHUKA.

(c) Refer SA – 530 (AAS – 15), Audit Sampling (Revised).

(d) Refer “Guidance Notes on Audit of Abridged Financial statements”.

(e) Refer Point 13.1 in “Audit of NBFC” in Vinod Agarwal.

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