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Ganapathy sir 's imp questions for C.A. IPCC / PCC

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C.A.Final (New) ICWAI FINAL (New)

[ Scorecard : 11180]
Posted On 13 April 2010 at 06:12 Report Abuse

 

C.A. IPCC / PCC – AUDITING (SEE NOTE IN THE LAST PAGE FOR PE-II)

IMPORTANT AREAS FOR MAY 2010 EXAM

(PREPARED BY S.GANAPATHY F.C.A.)

 

Note: Reclassification of AAS into Standards on Auditing has been made applicable for the exam and therefore it is necessary for you to study SAs but most of the principles and procedures laid down in AAS still hold good and therefore you can study and understand such principles and procedures with new SA numbers easily. In second volume of IPCC material there is Notes on renumbering and reclassification at the beginning of the material for about 14 pages. You should study these notes carefully. You should download the revised SAs from the Institute web site www.icai.org under the heading “Resources”. I have given the important standards for your study hereunder. 

Important Revised Standards on Auditing

SA 200, 210, 220, 230, 240, 250, 260, 300, 320, 500, 505, 510, 520, 530, 550, 560, 570, 580, 610, 620 

Important NEW Standards on Auditing

SA 265, 315 (Very important), 330(Very important), 450 

Note: SA 315 and SA 330 newly issued standards are very important for the exam.  
 

TOPICS IN INSTITUTE STUDY MATERIAL (LATEST)

Chapter- 1

Basic Principles Governing an Audit

Auditor’s Responsibility to consider Fraud and Error

Inherent Limitations of an Audit

Advantages of an Independent audit

Chapter- 2

Testing assertions regarding transactions and balances (Very important)

Reliability of Audit Evidence

Methods of obtaining Audit Evidence

Concept of Materiality

Disclosure of Accounting Policies- AS-1

Fundamental Accounting Assumptions

Chapter-3

Auditor’s Engagement

Permanent and Current Audit File- Ownership and Custody of Working Papers

Stratified random sampling, Advantages of statistical sampling

Audit Risk- Components of Audit Risk- Relationship between components of Audit Relationship between Materiality and Audit Risk

Quality control for Audit work

Certificates from Management -Management Representations

Chapter-4

Internal control- Objectives, Inherent Limitations

Review and Testing of Internal Control- Internal Control Questionnaire, Flow chart

Examination in depth / Auditing in depth (also known as Walk through Test)

Computer assisted audit techniques- Need and how it improves efficiency of audit procedures (bulleted points in the study material)

General CIS Controls and CIS Application controls

Approaches to EDP Audit- Audit around the Computer and Audit through the Computer

General considerations in framing a system of Internal Check

Statutory Audit and Internal Audit – CARO and Internal Audit

Chapter- 5

Vouching-Audit of Cash transactions

General considerations regarding vouching

Remuneration to Directors

Payment for Acquisition of assets

Payment of taxes

Customs and Excise duties

Assets acquired under Hire Purchase

Preliminary expenses

Advertisement expenses

Payment of dividends

Retirement Gratuity to Employees

Vouching-Audit of cash transactions

Rental Receipts

Insurance claims

Interests and Dividends received

Insurance claims

Sale of junk materials (sale of scrap)

Refund of general insurance premium paid

Audit of Trading Transactions

General considerations regarding audit of trading transactions

Factors increasing or decreasing Gross Profit

Purchase Return and Sales Return

Consignment sale

Cut-off Arrangement (also known as Cut-off Procedures) – Very important

Outstanding assets

Analytical Procedures- Extent of Reliance on Analytical Procedures

Chapter - 6

Verification of Assets

Depreciation (fully important)

Reserves and Provision-Capital Reserves and Specific reserves (very important)

General principles regarding verification

Auditor’s Duty under CARO regarding Audit of Fixed Assets

Know-how

Goodwill

Patents

Trademark & Copyright

Assets acquired under Hire-Purchase system

Debts due from subsidiary companies

Auditor’s Duty under CARO regarding Audit of Inventories

Attending Physical counting of inventories by Management (Attending Stock taking)

Verification of Liabilities

Loans on mortgage of property

Amount due to subsidiary companies

Verification of Debentures

AS-29, 4 and AS-5 (PRACTICAL QUESTIONS ON AS-4 & AS-5- END OF CHAPTER - 6)

 

Contingent Liabilities, Provisions

Events occurring after balance sheet date- Adjusting and Non-Adjusting Events

Prior Period items, Extra-Ordinary items, Changes in Accounting estimates, Changes in Accounting Policies (attempt practical questions on Accounting Standards in previous years question papers) 
 
 

Chapter – 7 (Very important chapter for compulsory question in exam) 

Disqualifications under section 226 

Note: 

  1. If a relative or partner of the auditor holds substantial interest in the business of the client, the auditor should not accept the appointment as per the latest amendment to the Code of Ethics. Before the amendment the auditor was required to disclose the substantial interest in his report. After the amendment the auditor cannot make such disclosure.
 
  1. If the auditor of a company is a relative of the director, then the appointment of the auditor requires special resolution under section 314 of the Companies Act, 1956
 
  1. Read the Notes under “Concept of Independence” in Chapter –2 in Institute study material.

Ceiling on audit-Code of Ethics Council notification No. 53 / 2001 on ceiling

Filling up of a casual vacancy

Appointment of auditor by special resolution

Re-appointment of Auditors

Notes given regarding sections 8 and 20 of C.A. Act, 1949

Appointment of auditor of a government company

 

Note:  Auditor appointed in AGM failing or refusing to accept appointment. Who can appoint another auditor?  Answer: In such case only members can appoint another auditor and not the Central Government since 224(3) is not attracted in such case.

Auditor’s remuneration

Removal of Auditor

Notes (Points 1 and 2) after removal of auditor and before powers of auditors

Inquiry under section 227(1A)

Matters to be reported – Section 227(3) – except clauses (e) and (g)- clause (f) regarding disqualification of directors under section 274(1)(g) is very important.

Auditor’s Report on Financial Statements

Basic elements of an Auditor’s Report

Opening or Introductory paragraph

Scope paragraph

Emphasis of Matter

Opinion paragraph - Types of Opinions

Branch Audit (Exemption) Rules, 1961

Special audit under section 233A

 

CARO, 2003- (LATEST AMENDMENTS IN NOV 2004) 

Applicability and Exemption (Conditions for exemption of a Private Ltd Co.)

Explanation of certain terms – Paid-up capital and Reserves, Loan outstanding, Turnover (in the Institute study material)

CARO Reporting requirementsclauses i, ii, iv, vi, vii, ix, x, xii, xiv, xv, xvi, xvii, xix, xxi – Study these clauses from the CARO Order

Chapter- 8

Sections 209, 211, 217 (VERY IMPORTANT)

Shares issued for consideration other than cash (Newton Vs Burmingham case very important for Terms of an Engagement cannot restrict the scope of an audit when the auditor’s duties are determined by statute or by pronouncements of the Institute)

Option on share capital

Sweat Equity shares

Buy-back

Audit of Debentures (only points regarding verification of issue of debentures)

Audit of Dividend and Interim dividends (very important)

Requirements of Schedule VI – Part-I, Part-II and Part-III

Chapter- 9

Duties of C&AG  

Audit against Rules and Orders

Propriety audit

Performance audit    

Audit of Government Companies- Powers of C&AG u/s 619(3) & (4)

Section 217(3) requirements- Practical question can be asked 

SPECIAL AUDITS

Audit of Non-Governmental Organisations- Provisions relating to Audit

Audit of a Partnership Firm- Special Steps -7 points)

Audit of Charitable Institutions

Audit of Educational Institutions

Audit of Hospital

Audit of Club

Note: Question in the exam- combination of two special audits- eg. Canteen in a hostel or hospital or charitable institution running a educational institution or a dispensary- in such questions you should combine the points from both the special audits.

APPENDIX – CASE LAWS
 

Kingston Cotton Mills case – Decision paragraphs are very important for auditor’s responsibility to consider fraud and error

ACCOUNTING STANDARDS

AS 1, 4, 5, 9, 10, 12, 13, 16, 18, 26, 29 (VERY IMPORTANT)

IMPORTANT SHORT NOTES QUESTIONS

Audit Risk, Inherent Risk, Control Risk, Detection Risk

Materiality and Audit Risk

Reliability of Audit Evidence

Disclosure of Accounting Policies

Fundamental Accounting Assumptions

Stratified Random sampling, Systematic sampling, Tolerable error, Expected error

Management Representations

Review and Testing of Internal Control

Examination in depth / Auditing in depth

Cut-off Arrangement / Cut-off Procedures

Outstanding assets

Extent of reliance on Analytical Procedures

Purposes of providing Depreciation

Provision and Reserve

Capital Reserve

Events Occurring After Balance Sheet Date

Prior Period Items, Extra-ordinary Items, Changes in Accounting Policies

Qualified Opinion, Adverse Opinion, Disclaimer of Opinion

Sweat Equity shares

Buy-back

Interim Dividend

Propriety audit

Performance audit 

External confirmations      

General Notes:

  1. Do not answer question 1 (practical questions) at the beginning of the exam. (VERY IMPORTANT) – Answer the question only after first hour.
  2. Present the answers point-wise and avoid paragraph-wise presentation
  3. The Code of Ethics provisions in Company Audit- I at the end of Removal of Auditor are very important (2 points just before Powers of Auditors)
  4. Foot Note under Ceiling on Audits- Chapter-7- Wrong Note- Do not study
  5. Decisions in important case laws in Chapter- I should be quoted wherever applicable
  6. Answer the practical questions on Accounting standards in previous year exams
  7. Regarding Ceiling on audits under section 224(1B) the company auditor should comply with both 224(1B) and the Council Notification simultaneously.
 
 

NOTE:

THE DIFFERENCE BETWEEN IPCC / PCC AUDITING EXAM AND PE-II AUDITING EXAM IS THAT THERE IS NO CHOICE FOR IPCC / PCC WHEREAS THERE IS CHOICE FOR PE-II EXAM IN THE EXAM QUESTION PAPER. OTHER THAN THIS THERE IS NO DIFFERENCE IN THE SYLLABUS OR THE IMPORTANT AREAS IN AUDITING. ALL WHAT IS GIVEN ABOVE AS IMPORTANT IS EQUALLY IMPORTANT FOR PE-II ALSO.   
 
 
 
 
 
 
 



Total thanks : 5 times

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CMA KNVV Sri Vidya - Sri Kanth
C.A.Final (New) ICWAI FINAL (New)

[ Scorecard : 11180]
Posted On 13 April 2010 at 06:14

Down load the atachment 



Attached File : 5 ipcc pcc and pe ii audit imp may 2010 exam.doc downloaded 1188 times

Total thanks : 5 times




Santhosh Poojary
Assistant Manager@TCS

[ Scorecard : 14301]
Posted On 13 April 2010 at 06:45

Thanx




S And V
CHARTERED ACCOUNTANT

[ Scorecard : 16212]
Posted On 13 April 2010 at 07:54

Thanks dear




Dhanya Sreedhar
CA final, doing Job

[ Scorecard : 651]
Posted On 13 April 2010 at 09:15

Hello,

 

Could any one pls send me Ganapathy Sir's important questions in Auditing for CA final (new) course. ?

Thank u




CA KRIPA HARISH
CHARTERED ACCOUNTANT

[ Scorecard : 331]
Posted On 13 April 2010 at 10:53

thanks for sharing.....




Venkatesh S G
Accountant

[ Scorecard : 30]
Posted On 13 April 2010 at 11:40

thanks Vidya




Abhimanyu Bind
CA Final Student & Audit Assitant

[ Scorecard : 2011]
Posted On 14 April 2010 at 12:00

Thank you for this sir but SA are not available on website of icai. Can you send me on abhimanyubind @ gmail.com




Abhimanyu Bind
CA Final Student & Audit Assitant

[ Scorecard : 2011]
Posted On 14 April 2010 at 12:01

can you send me plz?



kadam Ravindra Chandrakant
CA - PCC

[ Scorecard : 23]
Posted On 20 April 2010 at 23:48

thank you



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