Sequence and Series

212 Practice MCQs available for CA Foundation

Paper

Paper 3: Quantitative Aptitude

Exam Weightage

4-6 Marks

Key Topics

Arithmetic & Geometric Progressions

This chapter covers Arithmetic Progressions (AP) and Geometric Progressions (GP). Students learn how to find the nth term, sum of n terms, arithmetic/geometric means, and sum to infinity of a GP.

Exam Strategy Tip

For complex 'sum of series' questions, a great hack is to substitute n = 1 and n = 2 into the question and the options to see which one matches, completely bypassing the formula.

Key Terms

Annuity

A sequence of equal periodic payments made at equal intervals of time.

Arithmetic Progression (AP)

A sequence of numbers in which each term after the first is obtained by adding a fixed constant (called the Common Difference, d) to the preceding term. The general term is Tn = a + (n−1)d, and the sum is Sn = n/2 × [2a + (n−1)d].

Geometric Progression (GP)

A sequence of numbers where each term after the first is obtained by multiplying the preceding term by a fixed non-zero constant called the Common Ratio (r). General term: Tn = ar^(n−1). Sum: Sn = a(rⁿ−1)/(r−1) for r ≠ 1.

Comparison Tables

Void vs Voidable Contract: CA Foundation Law Distinction AP vs GP: Sequences and Series for CA Foundation Maths

All 212 Questions

Sum of progression

\displaystyle (a+b)

\displaystyle (a-b)

\displaystyle (a-3b)...n

Find the sum of first twenty-five terms of A.P. series whose

\displaystyle n^{th}

\displaystyle \left(n+\frac{2}{5}\right)

The first and fifth term of an A.P. of

\displaystyle 40

\displaystyle -29

\displaystyle -15

respectively. Find the sum of all positive terms of this A.P

If the common difference of an AP equals to the first term, then the ratio of its

\displaystyle m^{th}

\displaystyle n^{th}

Find the value of

\displaystyle 1+2+3+...+105

The first and last terms of an arithmetic progression are

\displaystyle 5

\displaystyle 905

. Sum of the terms is

\displaystyle 45,955

. The number of terms is

\displaystyle n

terms of an AP is

\displaystyle 3n^2-n

and its common difference is

\displaystyle 6

\displaystyle 1^{st}

\displaystyle 100

\displaystyle 300

which is divisible by

\displaystyle 4

\displaystyle 5

\displaystyle 20^{th}

term of arithmetic progression whose

\displaystyle 6^{th}

\displaystyle 38

\displaystyle 10^{th}

\displaystyle 66

\displaystyle 69

\displaystyle 3

parts which are in A.P. and are such that the product of first two parts is

\displaystyle 483

The number of terms of the series:

\displaystyle 5+7+9+...

must be taken so that the sum may be

\displaystyle 480

If the sum of '

\displaystyle n

' terms of an AP (Arithmetic Progression) is

\displaystyle 2n^2

, the fifth term is ____.

The sum of first

\displaystyle n

\displaystyle 3n^2+5n

. The series is:

\displaystyle n^{th}

term of the series

\displaystyle 9,7,5,...

\displaystyle 15,12,9,...

are same. Find the

\displaystyle n^{th}

\displaystyle 975

in monthly installments, each installment is less than former by

\displaystyle 5

. The amount of

\displaystyle 1^{st}

\displaystyle 100

. In what time will the entire amount be paid?

\displaystyle 975

in monthly installments, each installment is less than formed by

\displaystyle 5

. The amount of

\displaystyle 1^{st}

\displaystyle 100

. In what time will the entire amount be paid?

\displaystyle n

terms of an AP is

\displaystyle (3n^2-n)

and its common difference is

\displaystyle 6

\displaystyle 1^{st}

Insert two arithmetic means between

\displaystyle 68

\displaystyle 260

\displaystyle p^{th}

term of an A.P. is '

\displaystyle q

\displaystyle q^{th}

\displaystyle p

\displaystyle n^{th}

The sum of the series

\displaystyle -8,-6,-4,.........n

\displaystyle 52

. The number of terms

\displaystyle n

\displaystyle K

, for which the terms

\displaystyle 7K+3, 4K-5, 2K+10

are in A.P., is

If the ratio of sum of

\displaystyle n

terms of two APs is

\displaystyle (n-1):(n+1)

, then the ratio of their

\displaystyle n^{th}

\displaystyle p^{th}

term of an AP is

\displaystyle q

\displaystyle q^{th}

\displaystyle p

, then what will be the value of

\displaystyle (p+q)^{th}

How many numbers between

\displaystyle 74

\displaystyle 25,556

are divisible by

\displaystyle 5

\displaystyle 9^{th}

\displaystyle 19^{th}

term of an AP are

\displaystyle 35

\displaystyle 75

, respectively, then its

\displaystyle 20^{th}

\displaystyle n^{th}

term of an AP series is

\displaystyle 7n-2

, then sum of '

\displaystyle n

Find the value of '

\displaystyle x

' for the following data

\displaystyle 1+7+13+19.........+x=225

In an arithmetic progression, the seventh terms is

\displaystyle x

\displaystyle (x+7)^{th}

term is zero. Then

\displaystyle x^{th}

If the second and eight terms of an arithmetic progression (AP) are equal to constant

\displaystyle a

, then the sum of first

\displaystyle n

terms of this AP is equal to

\displaystyle 3^{rd}

term of arithmetic progression is

\displaystyle 7

and Seventh term is

\displaystyle 2

more than thrice of third term. The common difference is

If fourth term of A.P. series is zero, then what is the ratio of twenty-fifth term of eleventh term?

\displaystyle 8^{th}

term of an AP is

\displaystyle 15

, the Sum of the

\displaystyle 15

For what value of

\displaystyle x

\displaystyle x+1, 3x, 4x+2

\displaystyle n^{th}

element of the series

\displaystyle 3,5,7,...

\displaystyle 1+3+5+.........+n

\displaystyle = \frac{n^2}{2}

\displaystyle 2+4+6+.........+50

\displaystyle = 51

then the value of '

\displaystyle n

\displaystyle K

, for which the terms

\displaystyle 7K+3

\displaystyle 4K-5

\displaystyle 2K+10

are in A.P., is

Which term of the AP

\displaystyle 64, 60, 56, 52...

\displaystyle 0

\displaystyle n

terms of an A.P. is

\displaystyle 3n^2+n

\displaystyle p^{th}

If three AM's between

\displaystyle 3

\displaystyle 11

The first and the last term of an AP are

\displaystyle -4

\displaystyle 146

. The sum of the terms is

\displaystyle 7171

. The number of terms is

\displaystyle n

terms of an A.P. is

\displaystyle 3n^2-n

and its common difference is

\displaystyle 6

, then its third term is:

\displaystyle 4

\displaystyle 3

\displaystyle 18

The sum of the first

\displaystyle 3

terms in an AP is

\displaystyle 18

and that of the last

\displaystyle 3

\displaystyle 28

. If the AP has

\displaystyle 13

terms, find sum of the middle three terms?

A man starts his job with a certain monthly salary and earns a fixed increment every year. If his salary was

\displaystyle 1,500

\displaystyle 4

years of service and

\displaystyle 1,800

\displaystyle 10

years of service, what was his starting salary and what is the annual increment in rupees?

\displaystyle n

terms of two AP's are in the ratio

\displaystyle (3n+5):(5n+3)

then ratio of their

\displaystyle 10^{th}

\displaystyle p^{th}

term of an A.P. is 'q' and the

\displaystyle q^{th}

term is 'p', then its

\displaystyle r^{th}

\displaystyle n

terms of an A.P. be

\displaystyle 2n^2+5n

\displaystyle n^{th}

\displaystyle 20

AMs. are inserted between

\displaystyle 3

\displaystyle 51

then sum of these

\displaystyle 20

The first, second and seventh term of an AP are in G.P. and the common difference is

\displaystyle 2

\displaystyle 2^{nd}

term of A.P. is:

\displaystyle 4^{th}

term of an A.P. is three times the first and the

\displaystyle 7^{th}

term exceeds twice the third term by

\displaystyle 1

. Find the first term 'a' and common difference 'd'.

Find the sum of all natural numbers betn

\displaystyle 250

\displaystyle 1000

which are exactly divisible by

\displaystyle 3

A person puts Rs.

\displaystyle 975

in monthly instalment, each instalment is less than former by Rs.

\displaystyle 5

. The amount of first instalment is Rs.

\displaystyle 100

. In what time will the entire amount be paid?

\displaystyle n

terms of an A.P. is

\displaystyle (3n^2-n)

and its common difference is

\displaystyle 6

, then its first term is:

\displaystyle (x+1)

\displaystyle 3x

\displaystyle (4x+2)

are in A.P. Find the value of

\displaystyle x

Divide 144 into three parts which are in AP and such that the largest is twice the smallest, the smallest of three numbers will be:

\displaystyle 8^{th}

term of an AP is 15, the sum of the 15 terms is

For what value of

\displaystyle x

\displaystyle x+1, 3x, 4x+2

\displaystyle n^{th}

term of the series whose sum to

\displaystyle n

\displaystyle 3n^2+2n

In a G.P., if the fourth term is '3' then the product of first seven terms is

\displaystyle y = 1 + x + x^2 + \dots \infty

\displaystyle x =

\displaystyle \frac{1}{5} + \frac{1}{5^2} + \frac{1}{5^3} + \dots + \frac{1}{5^n}

Find no. of terms of the series

\displaystyle 25, 5, 1, \dots, \frac{1}{3125}

Three numbers in G.P. with their sum 130 and their product 27,000 are:

If the sum and product of three numbers in G.P. are 7 and 8 respectively, then

\displaystyle 4^{th}

term of the series is

\displaystyle 3^{rd}

term of a G.P. is

\displaystyle 2/3

\displaystyle 6^{th}

\displaystyle 2/81

\displaystyle 1^{st}

The sum of series

\displaystyle 7 + 14 + 21 + \dots

\displaystyle 17^{th}

The largest value of

\displaystyle n

\displaystyle 1 + \frac{1}{2} + \frac{1}{2^2} + \dots + \frac{1}{2^{n-1}} < 0.998

The sum of first 8 terms of a G.P is five times the sum of the first 4 terms. Find the common ratio?

\displaystyle 5^{th}

\displaystyle 8^{th}

term is 729. Find its

\displaystyle 11^{th}

\displaystyle 4^{th}, 7^{th}

\displaystyle 10^{th}

terms of a Geometric Progression are

\displaystyle p, q

\displaystyle r

, respectively, then:

Given an infinite geometric series with first term '

\displaystyle a

' and common ratio '

\displaystyle r

'. If its sum is 4 and the second term is

\displaystyle \frac{3}{4}

, then one of correct option is

If for an infinite geometric progression, first term is '

\displaystyle a

', common ratio is '

\displaystyle r

', the sum is 8 and the second term is

\displaystyle \frac{7}{8}

For what values of

\displaystyle X

\displaystyle \frac{-2}{7}, X, \frac{-7}{2}

Find the three numbers in G.P. whose sum is 19 and product is 216.

The sum of the infinite series

\displaystyle 1 + \frac{2}{3} + \frac{4}{9} + \dots

Find the sum to

\displaystyle n

terms of the series:

\displaystyle 7+77+777+\dots

\displaystyle n

\displaystyle P(7, k) = 60 P(7, k-3)

\displaystyle k =

\displaystyle p^{th}

term of a G.P. is

\displaystyle x

\displaystyle q^{th}

\displaystyle y

, then find the

\displaystyle n^{th}

The sum of the series

\displaystyle 0.5+0.55+0.555+\dots

\displaystyle n

The second term of a G.P is

\displaystyle 24

and the fifth term is

\displaystyle 81

. The series is

\displaystyle 1+10^{-1}+10^{-2}+\dots

\displaystyle \infty

In a GP, if fourth term is

\displaystyle 3

then the product of first seven terms is

In a G.P. If the third term of a GP is

\displaystyle \frac{2}{3}

\displaystyle 6^{th}

\displaystyle \frac{2}{81}

, then the first term is

Sum upto infinity series

\displaystyle 1 + \frac{1}{2} + \frac{1}{4} + \frac{1}{8} + \dots + \frac{1}{2^n} + \dots

In a G. P, sixth term is

\displaystyle 729

and the common ratio is

\displaystyle 3

, then the first term of G.P is

In a geometric progression, the second term is

\displaystyle 12

and sixth term is

\displaystyle 192

\displaystyle 11^{th}

The sum of first eight terms of geometric progression is five times the sum of the first four terms. The common ratio is

Which term of the sequence

\displaystyle 2, 4, 8, 16 \dots

\displaystyle 2048

\displaystyle 5^{th}

\displaystyle 8^{th}

terms of a GP series is

\displaystyle 27

\displaystyle 729

. Then find the

\displaystyle 10^{th}

Four Geometric Means between

\displaystyle 4

\displaystyle 972

The sum up to infinity of the series

\displaystyle S = \frac{1}{1 \cdot 2} + \frac{1}{2 \cdot 3} + \frac{1}{3 \cdot 4} + \dots

\displaystyle 3^{rd}

term of a G.P is

\displaystyle \frac{2}{3}

\displaystyle 6^{th}

\displaystyle \frac{2}{81}

, then the first term is

Find the sum to infinity of the following series:

\displaystyle 1 - 1 + 1 - 1 + \dots \infty

Find the product of:

\displaystyle (243), (243)^{\frac{1}{6}}, (243)^{\frac{1}{36}}, \dots \infty

The sum of the first eight terms of a G.P. is five times the sum of the first four terms; then the common ratio is:

For what values of

\displaystyle x

\displaystyle -\frac{2}{7}, x, -\frac{7}{2}

\displaystyle a^{\frac{1}{x}} = b^{\frac{1}{y}} = c^{\frac{1}{z}}

\displaystyle a,b,c

\displaystyle x, y, z

\displaystyle m

terms of the series

\displaystyle 1+11+111+\dots

\displaystyle m

terms, is equal to:

If the AM and GM of two numbers is

\displaystyle 6.5

\displaystyle 6

If AM and HM for two numbers are

\displaystyle 3

\displaystyle 3.2

, respectively. GM will be:

\displaystyle n^{th}

term of the series

\displaystyle 3 + 7 + 13 + 21 + 31 + \dots

\displaystyle x

\displaystyle 8

\displaystyle y

are in G.P. and the numbers

\displaystyle x

\displaystyle y

\displaystyle -8

are in A.P. The values of

\displaystyle x

\displaystyle y

respectively shall be

\displaystyle a^x = b^y = c^z

\displaystyle a, b, c

are in G.P., the

\displaystyle x, y, z

\displaystyle x, y

\displaystyle z

are the terms in G.P., then the term

\displaystyle x^2 + y^2, xy + yz, y^2 + z^2

\displaystyle a^x = b^y = c^z = e^{1/2}

\displaystyle a, b, c

\displaystyle x, y, z

The sum of the first two terms of an infinite geometric series is

\displaystyle 15

and each term is equal to the sum of all the terms following it, then the sum of the series is

\displaystyle \sum n^3

Three numbers are in AP and their sum is

\displaystyle 21

\displaystyle 1, 5, 15

are added to them respectively, they form a G.P. The numbers are

The sum of three numbers in G.P. is

\displaystyle 70

. If the two extremes by multiplied each by

\displaystyle 4

and the mean by

\displaystyle 5

, the products are in AP. The numbers are

\displaystyle a, b, c

\displaystyle x, y, z

are in GP, then the value of

\displaystyle x^{(b-c)} y^{(c-a)} z^{(a-b)}

The sum of the series

\displaystyle 1 + 11 + 111 + \dots

\displaystyle n

The sum of the following series

\displaystyle 4 + 44 + 444 + \dots

\displaystyle n

Find the sum of the series.

\displaystyle 243 + 324 + 432 + \dots

\displaystyle n

Find the sum of n terms of the A.P., whose

\displaystyle n^{th}

\displaystyle 5n + 1

The sum of first three terms of a G.P. is

\displaystyle \frac{21}{2}

and their product is 27. Which of the following is not a term of the G.P., if the numbers are positive?

Insert 4 numbers between 2 and 22 such that the resulting sequence is an Arithmetic Progression (A.P.).

Find the sum of series

\displaystyle 1 + \frac{1}{2} + \frac{1}{4} + \dots

The common difference of the arithmetic progression

\displaystyle \frac{1}{3}, \frac{1-3b}{3}, \frac{1-6b}{3}, \dots

\displaystyle x, 2x + 2

\displaystyle 3x + 3

are in the geometric progression, then the fourth term of the progression is

The sum of all natural numbers between 200 and 600 those are divisible by 13 is

The sum of first two terms of a geometric progression is 14 and its infinite sum i.e. sum up to infinity is 32. What is the common ratio of the progression?

The third term of a geometric progression is 5. Then the product of first five terms is

The sum of infinity of the series

\displaystyle \frac{1}{2} + \frac{1}{6} + \frac{1}{18} + \frac{1}{54} + \dots

A GP series consists of 2n terms. If the sum of the terms occupying the odd places is

\displaystyle S_1

and that of the terms in even places is

\displaystyle S_2

, the common ratio of the progression is?

Sum up to infinity of series.

\displaystyle 1 + \frac{1}{2} + \frac{1}{3} + \frac{1}{4} + \frac{1}{8} + \frac{1}{9} + \frac{1}{16} + \frac{1}{27} + \dots

\displaystyle 5^{th}

term of G.P. is

\displaystyle 32

\displaystyle 8^{th}

term of G.P. is

\displaystyle 8

\displaystyle 6^{th}

term of G.P. is

\displaystyle n

terms of an AP is

\displaystyle 2n^2

\displaystyle 5^{th}

\displaystyle 2+6+10+14+.........+x=882

then the value of

\displaystyle x

\displaystyle 6^{th}

\displaystyle 13^{th}

term of an A.P are

\displaystyle 15

\displaystyle 36

respectively the A.P is

\displaystyle n^{th}

term of the sequence

\displaystyle -1, 2, -4, 8, \dots

The first term of an A.P. is

\displaystyle 100

and the sum of whose first

\displaystyle 6

\displaystyle 5

times the sum of the next

\displaystyle 6

terms, then the c.d. is:

If the sum of five terms of AP is

\displaystyle 75

. Find the third term of the series.

The sum of the first two terms of a GP is

\displaystyle 5/3

and the sum of infinity of the series is 3. The common ratio is

\displaystyle T_p=q

\displaystyle T_q=p

\displaystyle T_{p+q}=

The ratio of sum of first

\displaystyle n

natural numbers to sum of cubes of first

\displaystyle n

natural numbers is

The sum of three numbers in a geometric progression is

\displaystyle 28

\displaystyle 7

\displaystyle 2

\displaystyle 1

are subtracted from the first, second and the third numbers respectively, then the resulting numbers are in arithmetic progression. What is the sum of squares of the original three numbers?

\displaystyle 17^{th}

term of an AP series if

\displaystyle 15^{th}

\displaystyle 21^{st}

\displaystyle 30.5

\displaystyle 39.5

\displaystyle (b+c-a), (c+a-b), (a+b-c)

\displaystyle a, b, c

In a geometric progression, that

\displaystyle 3^{rd}

\displaystyle 6^{th}

terms are respectively 1 and

\displaystyle -1/8

\displaystyle (a)

and common ratio are respectively.

Find the sum of n terms of the A.P., whose

\displaystyle n^{th}

\displaystyle 5n + 1

The sum of first three terms of a G.P. is

\displaystyle \frac{21}{2}

and their product is 27. Which of the following is not a term of the G.P., if the numbers are positive?

Insert 4 numbers between 2 and 22 such that the resulting sequence is an Arithmetic Progression (A.P.).

Find the sum of series

\displaystyle 1 + \frac{1}{2} + \frac{1}{4} + \dots

The common difference of the arithmetic progression

\displaystyle \frac{1}{3}, \frac{1-3b}{3}, \frac{1-6b}{3}, \dots

\displaystyle x, 2x + 2

\displaystyle 3x + 3

are in the geometric progression, then the fourth term of the progression is

The sum of all natural numbers between 200 and 600 those are divisible by 13 is

The sum of first two terms of a geometric progression is 14 and its infinite sum i.e. sum up to infinity is 32. What is the common ratio of the progression?

The third term of a geometric progression is 5. Then the product of first five terms is

The sum of infinity of the series

\displaystyle \frac{1}{2} + \frac{1}{6} + \frac{1}{18} + \frac{1}{54} + \dots

A GP series consists of 2n terms. If the sum of the terms occupying the odd places is

\displaystyle S_1

and that of the terms in even places is

\displaystyle S_2

, the common ratio of the progression is?

9. Which of the following need not be included by the audit team as a part of audit documentation during handling of their respective assignments?

10. Financial events or conditions that may cast significant doubt on the entity's ability to continue as a going concern does not include

11. Which kind of audit report will the auditor issue, if the use of going concern basis of accounting is appropriate, but a material uncertainty exists and adequate disclosure of the material uncertainty is made in the financial statements by the management?

12. If the auditor is of the opinion that the written representations are not reliable, what kind of audit opinion should be issued by him?

13. M/s DEF & Associates have been appointed as the statutory auditor of JKL Ltd. for the first time for the financial year 2024-25. The engagement partner, CA D, is briefing his engagement team about the need of Engagement Standards and Quality Control Standards in the areas of financial statement audits and in other types of assurance services. Out of the following which one point is not correct about why standards are needed?

14. RDB & Co. have been appointed as statutory auditors of INA Group of Hotels. This is the first time the firm is auditing an industry in food & beverage. The engagement partner, CA R, and other key members of the engagement team have undertaken the activity of development of an audit plan of INA Hotels after thorough understanding the Hotel's business and its environment. As per SA 300, description of which of the following matters is not a part of developing an audit plan?

Question 1 (a) CA Rashmi is the auditor of ABC Ltd. for the financial year ending 31/03/2024. The audit report for the year was signed by her on 19/04/2024. On 25/4/2024, the company received a communication from the Central Government that an incentive amount of ` 5 crores pertaining to financial year 2023-24 was approved. It was paid to the company before the end of April 2024. The financial statements of the company were not yet issued to the shareholders. The Board of Directors wished to include the incentive amount in the financial statements and requested the auditor to issue a fresh audit report for the year ended 31/03/2024. Analyze the issue involved and give an overview of the auditor's responsibility in such a situation. (4 Marks) (b) Auditors cannot normally examine all the information available to them as it would be impracticable to do so and using audit sampling will produce valid conclusions. Samples should be selected in such a manner that it is representative of the population from which the sample is being selected. Which sample selection method is used in the following two cases? Identify and explain them briefly. (i) Auditor divided the trade receivables in three groups: balances above ` 20 lakhs, balances between ` 10 lakhs to ` 20 lakhs and balances below ` 10 lakhs. He selected different percentages of items from each group. (ii) Auditor uses the sample of 50 consecutive cheques to test whether the cheques are signed by authorized signatories, rather than picking 50 single cheques throughout the year. (4 Marks) 10

Question 2 (a) CA B, was the auditor of Star Limited. He wanted to ensure that the company had correctly reconciled its bank accounts and also wanted to understand whether and how far the internal control system was operating in the company. What kind of test of control was CA B performing? What are the other procedures that can be applied while undertaking test of controls? (4 Marks) (b) Alfa Limited has availed bank overdraft facility from a nationalized bank. The company received balance confirmation certificate for bank overdraft balance as on 31.03.2024 from the bank. Particulars Amount (`) Bank overdraft balance as per Bank Certificate 25,66,200/- Bank overdraft balance as per Ledger 26,45,300/- How will you vouch/verify borrowings from Bank taken by Alfa Limited? (4 Marks) (c) Schedule III of the Companies Act, 2013 prescribes disclosure of certain ratios as a part of Additional Regulatory Information. Mention any 3 ratios that should be disclosed along with the Rules relating to disclosure of these ratios. (3 Marks) (d) The engagement partner, of a firm of auditors, is explaining to his audit team, undergoing practical training, the inter relationship between audit strategy and audit plan. Discuss the points which the engagement partner will explain to his team in this regard. (3 Marks)

Question 3 (a) CA Amit is the auditor of LMN Ltd. While conducting the audit, he wanted to analyze the different components of internal control of the company. Identify and explain which component of internal control he is trying to understand in the following two cases: - (i) Whether controls in LMN Ltd. are operating as intended and they are modified as appropriate for change in conditions. (ii) Whether there exists proper segregation of duties in the company and the person responsible for recording a transaction is different from the person authorizing it. (4 Marks) (b) M/s. PK & Company, Chartered Accountants, are the statutory auditors of JC Limited. CA Tarun, partner of M/s. PK & Company, was entrusted to supervise AUDITING AND ETHICS and verify the inventory items as on 31.03.2024. During the process of verification, a large chunk of draft inventory sheets were accumulated and then a final inventory sheet was prepared. The audit assistant has kept all these drafts and the final inventory sheet in the audit file. Is the approach of the audit assistant correct? Which papers/ documents may not be included in the audit documentation? (4 Marks) (c) K Ltd. is availing cash credit limit of ` 25 crores from LMN Bank Ltd. The drawing power of the company range between ` 22 crores and ` 25 crores during the year 2023-24. The limit availed by the company remained less than ` 20 crores during all the days of the financial year 2023-24. The company has not deposited any amount in the cash credit account and there are no other credits to this account during the last two quarters. How will this account be classified in the books of LMN Bank Ltd. as on 31-03-2024? Explain. (3 Marks) (d) You are the statutory auditor of NP Ltd. Looking at the huge size of similar transactions, you directed your team members to use statistical sampling. One of the team members, Mr. Q, wants to select samples based upon his personal experience & knowledge as he is not aware of statistical sampling. You are required to explain to Mr. Q why the use of statistical sampling method is more scientific and appropriate. (3 Marks)

Question 4 (a) EFG Ltd. has appointed M/s. MN & Co., Chartered Accountants, as the statutory auditors for the year 2024-25. CA N, the engagement partner, completed his risk assessment procedure. However, he is concerned about the management of human resources to be employed to conduct the audit. For this purpose, he wants to establish an overall audit strategy for setting the 20

Question 5 (a) M/s. PP & Co, a firm of Chartered Accountants, has been auditing the books of accounts of KALI Ltd. for the past 3 years. The company has recently made some major changes in its business policies. While planning to start the audit for the 4th year i.e. for financial year 2024-25, the audit manager of the firm, as per the routine practice, handed over the previous years' audit programme as it is to the audit team with the instructions to adhere unfailingly to the said audit programme. Evaluate the decision of the audit manager with reference to the use of audit programme. (4 Marks) (b) The management of D. Ltd. have engaged an actuary-expert to ascertain actuarial valuation of gratuity for provision to be made in the accounts. As an auditor of D. Ltd., you plan to use the report of the said expert as audit evidence for ascertaining appropriate valuation of provisions. As an auditor, what will you do to evaluate the competence, capabilities, objectivity and an understanding of the work of the actuary-expert who has carried out actuarial valuation of gratuity? (4 Marks) (c) Z and Associates are the auditors of Realton Ltd., an export oriented unit, which specializes in manufacturing oil extraction plants. Since many complex processes are involved, they are digitizing their operations. They are restructuring their business models which are driven by technology. Since most of the operations of the company are automated, Z and Associates are planning to do Digital Audit. Explain the use of digital technology in the conduct of an audit. (3 Marks) (d) Mr. J is an articled clerk with a big Chartered Accountants' firm. He is a part of the engagement team which is conducting the audit of a company for the first time. They are assigned with the work of preparing the draft audit engagement letter. Mr. J is not sure how to go about with this work. Explain what is Audit Engagement Letter and what are its contents? (3 Marks)

Question 6 (a) You are the auditor of Plus Bank Limited. The bank has made following provisions for the year ended on 31.03.2024: Particulars Amount (` in crores) Provision for Bad Debts 66 Provision for Sub-standard Assets 78 Provision for Expenses 24 Provision for Income Tax 55 You are in the process of verifying the provisions and contingencies of the bank. What audit approach and procedures will you adopt to verify the above? (4 Marks) OR (a) CA Vasu was appointed as the statutory auditor of M/s. Pizza Limited for the financial year 2023-24. While reviewing the internal controls, he observed that the company has entered into many transactions with firms in which the directors are interested. The company's specified procedure was by-passed in such transactions. CA Vasu considered it as a significant deficiency in internal control over related party transactions. He communicated this deficiency to Those Charged With Governance (TCWG) as under, "Controls over significant transactions with related parties are weak." In view of the above, please explain: (i) What is meant by deficiency in internal control? AUDITING AND ETHICS (ii) As per SA 265, whether the significant deficiency communicated by CA Vasu to TCWG is appropriate? Explain. (4 Marks) (b) CA P is a professional accountant in service. In terms of employment and professional relationships with employer he has to be alert to the possibility of inadvertent disclosure of any information outside the employing organization. However, in view of disclosure required by law, CAP had to divulge the information and documents as evidence in course of legal proceedings. Whether CA P has violated any fundamental principle governing professional ethics in this case? Explain. (4 Marks) (c) During the audit of accounts for the year ended 31.03.2024, the auditor of FD Limited wanted confirmation from a Trade Receivable, which was outstanding for more than six months, amounting to ` 4,25,000/-. The auditor sent a Confirmation letter to the party requesting them to respond directly to him, whether or not they agree with the amount outstanding from them. That trade receivable confirmed to the auditor of FD Limited, that they were required to pay an amount of ` 4,20,000 to FD Limited as per their books of accounts. State and explain the type of Confirmation Request sent by the auditor and the course of action that he should take on the confirmation received from the trade receivable. (3 Marks) (d) P Financial Services Ltd. (PFSL) is a leasing & hire purchase company. You, as an auditor of PFSL, are in the process of examining finance lease agreements executed by them for equipment given on lease. Which points shall be noted by you while examining a particular finance lease agreement entered into by PFSL in respect of a leasing transaction? (3 Marks)

1. Which of the following would not form part of the explanation given by CA P to Rahul?

3. How will you categorize the information pertaining to F.Y. 2022-23 in relation to extract found?

5. Control "TARGET" will be categorised in which of the following?

8. CA F performed which of the following analytical procedure to obtain the audit evidence with respect to the overall reasonableness of purchase quantity and price of raw material?

11. ABC Traders offered its warehouse as security for the loan. HFC Bank created a charge on the warehouse. Which form of security has been created and whether bank is required to get stock audit done of cash credit account of ABC Traders ?

14. In case any intangible asset is not in active use by the entity, the auditor should check whether: -

Question 2 (a) XYZ Ltd., a manufacturing company engaged in the production of various types of yarn, is planning to expand its operations into a new geographical market and also add new products. Company has prepared prospective 14

2. Which of the statements included by Rahul in revised draft engagement letter is incorrect?

4. Which of the audit procedure performed (before finalizing the audit report of M/s. Fox India Limited) by Rahul is not as per SA 560?

7. Do you agree with all the ways suggested by CA Z to CA F?

10. Is the bank's decision not to apply NPA and income recognition norms to account of SJ Ltd. valid under regulatory guidelines?

13. Which of the following statements is not correct about Limited Liability Partnership (LLP)? 8 SUGGESTED ANSWER

6. Which of the procedures performed by CA F is suitable for satisfaction of concern regarding borrowing?

9. Whether the asset classification of account of X Limited is correct?

12. Whether correct classification and provisioning norms have been applied in the account of Precision Engineering?

15. Management of ECX Systems Limited acknowledged that going concern assumption will not be suitable while preparing financial statements and informs the auditor that the fact of uncertainty related to going concern would suitably be disclosed in the notes of accounts. How should the auditor address this while preparing Independent Auditor's Report? AUDITING AND ETHICS

Question 3 (a) ABC & Co., a Chartered Accountant firm, has been appointed as the statutory auditors of Pen Private Limited for the F.Y. 2023-24. During audit, one of the team members, Mr. R noticed that Pen Private Limited has purchased software amounting to ` 2.00 crore and the said software is not an integral part of the related hardware. Mr. R further observed that Pen Private Limited has conducted some research of an internal project work amounting to ` 1.00 crore. Pen Private Limited, following Indian GAAP, has presented the aforesaid details in the Balance Sheet as on 31st March, 2024 as follows: Property, Plant, and Equipment ` - Software 2.00 crore - Research 1.00 crore Mr. R approached the engagement partner with above details and enquired about the correctness of the presentation made by Pen Private Limited in terms of Schedule III to the Companies Act, 2013. Mr. R further wanted to ensure that all additions to Intangible assets during the year 2023-24 have been recorded appropriately in the financial statements of Pen Private Limited. Guide Mr. R. (5 Marks) (b) Projects India Limited (PIL) is engaged in manufacturing and trading of disposable glasses and plates used in social gatherings/functions. XYZ & Co., Chartered Accountants, is the statutory auditor of PIL for the F.Y. 2023-24. Analytical procedures carried out by the audit team, headed by CA Z, indicate that company's business is going downward and PIL could achieve only 50% of total revenue of F.Y. 2022-23. Management has not taken any steps to increase the revenue or add new products or customers to stabilize the revenue and profitability. Also the suppliers are demanding cash payment at the time of purchase of raw material. Before finalizing the audit report, audit in charge asked for a cash flow forecast from management for the next AUDITING AND ETHICS 12 months from the end date of financial statements. Keeping in view the above facts, answer the following: (i) What can be the likely purpose of CA Z in the above situation? (3 Marks) (ii) State any two audit procedures in relation to the cash flow forecast likely to be performed by CA Z. (2 Marks) (c) Singh & Associates, while carrying out statutory audit of Rubber Industries Limited, observed that debtors are not making payments invoice wise. As the debtors constitute sixty percent of the total assets, so auditors requested management to provide external confirmations of all the debtors outstanding for an amount exceeding ` 1.00 Lac. However, management resisted and no external confirmations were made available. Auditor firm has decided to disclaim an opinion on the financial statements and seek your guidance on amendments that should be made in the "Basis for Opinion" section and elements required by SA 700 (Revised) which need not to be included in the auditor's report. Guide them suitably. (4 Marks)

Question 6 (a) CA P was consulted by one of his friends, Mr. Robin. Robin informed him that he wants to enter in education sector and invest in one of the schools being operated in the city. The operations of the school will be managed by Robin only and the proposed investment will be made once CA P confirms the revenue figures given to him (Robin) by existing management of the school. CA P said that main source of revenue to school is fee from students and that will be verified. What special steps are involved in the verification of fees collected from students? (5 Marks) (b) Oval Enterprises Limited (OEL) is under legal obligation to represent its current year's financial statements along with the previous year's financial statements (comparative financial statements). Karan & Associates, Chartered Accountants, has been appointed as the statutory auditor for the year. CA Karan noticed that the last year's financial statements contain an adverse opinion for the financial statement as a whole due to a misstatement AUDITING AND ETHICS in the evaluation and disclosure of the debtors. Guide CA Karan for his duty regarding the treatment and addressing the issue while drafting his audit report. What disclosures he is required to make in this regard? (5 Marks) (c) Identify and explain the fundamental principles being referred to in the following cases. (i) Professional accountants should act diligently and in accordance with applicable technical and professional standards while providing professional services. (2 Marks) (ii) A professional accountant shall not knowingly be associated with reports where he believes that the information contains a materially false or misleading statement. (2 Marks) OR (c) In an automated environment, there are generally four types of audit tests available. As a senior auditor, it's crucial to guide your team in selecting the appropriate audit tests based on the situation. Explain the types of audit tests commonly used in an automated setting and provide insights on how to determine when and which tests to apply, emphasizing the role of professional judgment in making these decisions. (4 Marks)

Question 1 (a) AP & Co., Chartered Accountants, are appointed as statutory auditor of Heavy Industries Limited, a listed company engaged in manufacturing of electric vehicles, for the F.Y. 2023-24. As per the recent guideline issued by the regulatory authority, every listed company is required to maintain the digital database of all those personnel who could access the books of the company to avoid Insider Trading. In case of non-compliance, hefty fines may be imposed on the company. CA P is the engagement partner from auditor firm for the audit of Heavy Industries Limited. During planning, CA P planned that he would inquire from in-house IT Head of the company about the maintenance of the digital database to identify and assess the risk of non- compliance with regulatory guidelines. In the light of above facts, explain : (i) Whether CA P is required to consider about the maintenance of digital database while framing audit strategy ? (3 Marks) (ii) Whether the procedures planned by CA P are in line with SA-300 ? (2 Marks) (b) Fashion Garments Limited (FOL) is a company engaged in the manufacturing and sale of ready-made garments. The products manufactured by FGL cater to clothing requirements of men, women and kids section. Pearl & Associates, Chartered Accountants, is the statutory auditor of FGL. Partner CA Pearl asked her audit assistant to go through the segment information disclosed and presented in the financial statements. Assistant is new to the audit engagements and seeks her guidance on what is the key responsibility of the auditor in relation to segment information. What should CA Pearl guide the assistant on the said matter ? (2 Marks) What audit procedures should CA Pearl perform to ensure that methods used by the management to present segment information are in accordance with the applicable financial reporting framework ? (3 Marks) AUDITING AND ETHICS (c) Spare Parts Limited received an input from internal auditors that internal controls implemented by the company appears to be reasonable but not so strong that any fraudulent activity can be prevented or timely detected by such controls. Accordingly a qualified person should head the internal controls department. CA Raj has been appointed as an Internal Control Head of the company. His scope of work includes development of internal controls in various departments/areas of the company. On his joining, he studied the various verticals and after identifying the important areas (prone to fraud) implemented strong controls in those areas. In his meeting with senior management and statutory auditors, he assured that satisfactory control environment exists and fraud cannot happen. Whether existence of a satisfactory control environment can be considered as an absolute deterrent to fraud ? (4 Marks)

Question 4 (a) PQR & Co., Chartered Accountants, has been appointed as statutory auditor of MGM Ltd. The financial statements of the company have material amount outstanding as debtors. Ageing of debtors is being done by the internal auditors and is given by them in their monthly report. This issue was also discussed with the management. The engagement partner from PQR & Co. decided to give the age wise debtors as per the report of internal auditor due to shortage of time. After the audit report was released, the engagement partner realized that the disclosure of the debtors is misleading and the ageing was not done by the internal auditor on correct principles due to which the provision made against old debtors was wrong. The engagement partner held the internal auditor responsible for this. Is he correct in making statement that the internal auditor is responsible for false provisioning? What considerations PQR & Co. should have undertaken before relying on the work of internal auditor? (5 Marks) (b) Identify and explain the assertions that the auditor will check by performing the following audit procedures- (i) Employee benefit expenses do not include the cost of any unauthorised personnel. 22

1. ______ is conducted to ensure that the various programmes, schemes, and projects where large financial expenditure have been incurred are run economically and are yielding results expected of them.

4. Mr. B, an Articled Clerk responsible for the audit procedures concerning inventory, found that the inventory amounting to ` 38 lakhs, after excluding ` 2 lakhs of inventory that was held by PQ Ltd. as a consignee, has been recognized in the Balance Sheet. Which of the following assertions related to inventory are applicable in this situation? (I) Occurrence (II) Completeness (III) Rights & Obligations (IV) Measurement

Question 5 (a) Z Ltd. engaged ABC & Co., Chartered Accountants, to conduct its statutory audit for the F.Y. 2023-24. The audit team developed an overall audit strategy and plan to address the risk. During the audit, several significant changes occurred, including the discovery of a material misstatement in inventory valuation and changes in the scope of audit procedures due to an unexpected acquisition by Z Ltd. The audit documentation for Z Ltd. should reflect these changes but the auditor of a company failed to document the audit strategy and the audit plan. As a senior auditor of the firm briefly outline what should be included in the documentation of audit strategy and audit plan and how should the audit documentation address significant changes made during the audit engagement. (5 Marks) (b) SRP Limited appointed M/s JK & Co. as its statutory auditors. Auditors while carrying out the audit observed that company has entered into a complex transaction having material effect on the financial statements. In order to have realistic information on the said transaction (relevant to the audit), audit team decided to take assistance from those charged with governance. Two of the team members were discussing as to who can be 26

2. While conducting an audit against provision of funds, the statutory auditors, M/s Rama & Associates must check

5. Mr. C, an Articled Clerk responsible for the audit procedures regarding the share capital, found that during the year under audit, PQ Ltd. had issued sweat equity shares amounting to ` 10 Lakhs. Which of the following statements regarding the issue of sweat equity shares are correct? (I) It can be issued to employees. (II) It can be issued to directors. (III) It can be issued at a discount. (IV) It should be of a class of shares already issued by PQ Ltd.

Integrated Case Scenario - III M/s DG and Associates, Chartered Accountants, have been appointed as the statutory auditor of HT Private Limited for the financial year 2024-25. CA Mr. D, engagement partner, and a team comprising of three articled clerks has been assigned the task of conducting the audit of HT Private Limited for F.Y. 2024-25. In the initial stages of conducting an audit of HT Private Limited, CA Mr. D decided to evaluate internal control operating in the company. To gather information required for evaluation of internal control, CA Mr. D asked his team members to suggest a method which would help in gathering information so that internal control of the company can be evaluated. First team member of the team suggested that they should follow a method, in which a series of instructions and/or questions are required to be followed and/or answered by the audit team and the answers to these instructions are usually Yes, No or Not Applicable. These instructions are framed having regard to the desirable elements of control. The second team member of team suggested a method in which a complete and exhaustive description of the internal control system as found in operation is recorded by the auditor. The third team member of team suggested a method in which comprehensive series of questions concerning internal control were required to be answered which would provide information about internal control. Based on the above facts, answer the following Q. Nos 9 to 12: 9. In initial stage of conducting audit of HT Private Limited, CA Mr. D decided to evaluate internal control of the company. Evaluation of internal control is very important part of

3. Which type of the expenditure audit covers the scrutiny of the expenditure incurred on the construction of stockyard by the company which is considered as infructuous and avoidable by CA Rama?

6. Mr. D, an Articled Clerk, was performing audit procedures related to Reserves and Surplus in PQ Ltd. tell him that which statement are correct in respect of Reserves and Surplus? (I) Reserves are the amounts appropriated out of profits for commitment. (II) Securities premium is a capital reserve. (III) A debit balance in the statement of profit and loss account shall be shown as a negative figure under the head 'surplus'. (IV) All reserves can be used to augment the working capital of the Company.

11. The method suggested by second team member in which a complete and exhaustive description of internal control in operation is recorded. This method is known as

14. Which of the following statement is incorrect with regard to written representations?

4. Aspects of laws, regulations and contractual agreements that may affect the financial statements, including non-compliance. (b) Computation of Drawing power of S Ltd. for the month of March 2025: Value of stocks ` 50,000 Less: creditors for goods ` 15,000 Value of Paid stocks ` 35,000 Less: Margin @ 20% ` 7,000 Drawing power (

7. Mr. E, an Articled Clerk, was not sure about which items should be considered as intangible assets in PQ Ltd. According to AS-26, which of the following items should not be recognized as intangible assets? (I) Internally generated Goodwill (II) Compact disk in the case of computer software (III) Copyrights (IV) Computer software for computer-controlled machine tools that cannot operate without that specific software, which is an integral part of the related hardware.

10. The method suggested by first team member according to which, a series of instructions and/or questions which a member of the auditing staff must follow and/or answer. When he completes instruction, he initials the space against the instruction. This method is called as

13. ABC Ltd. is undergoing an audit, and the auditors are evaluating the reliability of different types of audit evidence. External evidence is generally considered to be more reliable than internal evidence. The following is NOT an example of internal evidence:

15. Which of the following statements is inappropriate?

4. Standards on Related Services (SRSs) which apply in agreed upon procedures to information, compilation engagements and other related service engagements. AUDITING AND ETHICS The purpose of issue of these standards is to establish high quality standards and guidance in the areas of financial statement audits and in other types of assurance services.

Question 2 (a) Mention any three standards issued under authority of ICAI Council which are collectively known as 'Engagement Standards'. (3 Marks) Also mention the purpose of issue of these standards. (2 Marks) (b) Give five examples of operating events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern. (5 Marks) (c) TS Ltd. has raised funds by issuing fully convertible. debentures. These funds were raised for the expansion and diversification of the business. The company had clearly outlined in its board resolution that these funds will be used for business expansion and diversification purposes only. However, the company utllised these funds for repayment of long-term loans and advances rather than for the intended purpose of business growth and expansion. State the reporting responsibility of the auditor under paragraph 3, clause (x) of the Companies Auditor's Report Order, 2020 (CARO 2020). (4 Marks)

Question 5 (a) As per SA 299 "Joint Audit of Financial Statements", joint audit basically implies pooling together the resources and expertise of more than one firm of auditors to render an expert job in a given time period which may be difficult to accomplish acting individually. Explain by stating any five advantages of joint audit. (5 Marks) (b) The Management of Sun Shine Ltd. has provided the auditor with a written representation regarding its. responsibilities for the preparation of the AUDITING AND ETHICS financial statements. In addition to this, the auditor may request other written representations about the financial statements. Mention such other representations which may supplement but do not form part of the written representation relating to management's responsibilities regarding preparation of financial statements. (5 Marks) (c) Compute the Drawing power for Cash Credit limit granted to S Ltd. by Trust Bank for the month of March 2025 from the following information: Particulars Amount in (`) Value of stocks 50,000 Value of debtors (including debtors of 5,000 for an invoice dated 17.11.2024) 45,000 Value of creditors for goods 15,000 Sanctioned limit 45,000 Margin on stock is 20% and on debtors is 50%. Note: Debtors older than 3 months are ineligible for calculation of D.P. (4 Marks)

2. Which assertion concerning the bifurcation of employee expenses into various heads is being verified by CA B?

5. Undue dependence on the fees from GHB Ltd. creates which threat of independence for the auditors?

8. CA I, who is in charge of audit of NAND Co-operative Society, wants to ensure that the society has contributed for charitable purposes within the limits prescribed. How much is the society allowed to contribute for charitable purposes ?

Question 1 (a) M/s YZW & Co., Chartered Accountants, have been appointed as the statutory auditors of First Health Private Limited for the financial year 2024-25. CA Y is the engagement partner for this assignment. First Health Private Limited operates in the business of hospitals and pharmaceuticals, with 60 hospitals and 200 pharmacy stores across the country. The company has a turnover of ` 680 crores and PAT of ` 32 crores in the current year. While verifying the assertions about book debts, CA Y was informed about the availability of the client's ledger invoices, debit notes, and credit notes as audit evidence. CA Y accepts these documents as audit evidence, considering them to be "available." (i) Is this decision correct, based on the meaning of the term "available"? (3 Marks) (ii) Also, explain how an auditor should select the most appropriate evidence when testing the accuracy of any assertion to form an opinion. (2 Marks) (b) Mention the types of control in an automated environment. (1 Mark) Identify the type of control in the following table in Column B against Column A which contains areas where controls are to be implemented in an automated environment. Column A Column B Access security ? Sequence number checks ? Data centre and network operations ? Mandatory data fields ? (4 Marks) (c) M/s BPA & Associates, Chartered Accountants, was appointed as the auditors of Nissan Ltd., a company with PAN-India presence, for the financial year 2023-24. The audit report was issued on August 20, 2024. Following the AUDITING AND ETHICS issuance of audit report, CA P instructed junior team member Mr. Y to assemble the final audit file and prepare the Completion Memorandum. (i) Explain the meaning and significance of a Completion Memorandum. (2 Marks) (ii) Team Member Y completed the assembly of the final audit file in March 2025 and handed it over to CA P. Was team member Y correct in his approach? (2 Marks)

Question 4 (a) CA Pari is conducting the audit of Heavy Ltd., a company with large number of customers which are generally small retail shop owners. While verifying sundry debtors, CA Pari assesses the risk of material misstatement (ROMM) as low and internal control is operating effectively. With reference to SA 505 (External Confirmations): (i) Which type of confirmation request is most likely to be used by CA Pari in this scenario? (1 Mark) (ii) What are the conditions necessary for using such a confirmation request effectively? (4 Marks) (b) M/S ABC & Co., Chartered Accountants, have been appointed as the statutory auditors of DEF Ltd., which is a listed company, for the Financial Year 2024-25. CA X, a seasoned Chartered Accountant with over 15 years of experience has been assigned as the engagement partner for this audit. CA X takes responsibility for maintaining overall quality on this audit engagement in accordance with SA 220. What do the actions of engagement partner and appropriate messages to the other members of the engagement team, in taking responsibility for the overall quality on audit engagement emphasize? (5 Marks) AUDITING AND ETHICS (c) While auditing the accounts of PQR Ltd., a member of the audit team wants to carry out test of controls for checking the effectiveness of internal control over sales as a part of debtor's audit procedure. State any four points that need to be considered in respect of trade receivables. (4 Marks)

1. Since it became impracticable for CA B, on 31 March, 2024, to attend physical inventory counting at the warehouse and also became impossible to perform alternative audit procedures to obtain sufficient appropriate audit evidence regarding the existence and conditions of inventory, CA B shall:

4. Due to tight deadlines, CA B has insufficient time to properly perform or complete the relevant duties and he has to sign off clean audit report. Which fundamental principle governing professional ethics is disregarded by him ?

7. The securities premium account of PAWAN Ltd. cannot be applied for which of the following purposes ?

Question 3 (a) LMN Ltd., a mid-sized manufacturing company, generates revenue primarily through the sale of consumer electronics in domestic and international market. The company reported sales of ` 2 crores in the Financial Year 2024-25. The company generates revenue through sale of standard electronics devices, 48

Question 6 (a) T Ltd. has appointed NFO & Co., Chartered Accountants, as statutory auditors. Since inventory is a material component of the financial statements, CA F plans to attend the physical inventory counting. Provide any five matters that CA F should consider when planning their attendance at the physical inventory counting. (5 Marks) (b) M/S PQ & Co., Chartered Accountants have been appointed as statutory auditors of CBD Multiplex Cinema Ltd. The audit team started the audit and verified the ledger and other books of accounts for the F.Y. 2024-2025. However, one of the team members is of the view that the internal control mechanism of the company should also be verified. Can you guide the audit team about the areas that will be covered in verifying the internal control mechanism? (5 Marks) (c) The auditor shall take into consideration the reporting objectives of the engagement so as to plan timing of different audit procedures and also nature of communications while establishing audit strategy. Give any four instances of reporting objectives. (4 Marks) OR (c) As an auditor of Star Ltd., a company covered under Section 135 of the Companies Act, 2013, what matters should auditor verify to ensure that proper disclosures regarding Corporate Social Responsibility (CSR) activities is made in Additional Information to notes to account. Mention any four such matters. (5 Marks)

3. With reference to reporting on the internal financial controls system under the Companies Act, 2013, which of the following does not fall within the nature of responsibility of GHB Ltd?

6. In case of difference of opinion between the joint auditors, what course of action can M/s. KRISH & Co. take while issuing the audit report?

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