COMPANY AUDITOR
1. Who is responsible for the appointment of statutory auditor of a limited company ?
a) Directors of the company b) Members of the company
c) The Central Government d) All of the above
2. Which of the following sections deal with qualifications of the auditor ?
a) Section 226 (1) and section 226(2) b) Section 224 (1) and section 224 (2)
c) Section 226 (3) and section 226(4) d) Section 224(3) & Sec.224
3. Which of the following statement is not true?
a) A partnership firm can be appointed as a statutory auditor of limited company
b) Appointment can be made in the name of the firm
c) Majority of the partners should be practicing in India
d) All partners should be chartered accountants
4. As per the requirements of section 226(3) and 226(4) a person is disqualified from being
appointed as a statutory auditor if he holdsa)
Equity shares or debentures of the company
b) Equity shares carrying voting of the company
c) Shares carrying voting rights of the company
d) Security carrying voting rights of the company
5. The board of directors shall appoint first auditor of a company
a) With in one month of completion of capital subscription state of the company
b) With in one month of the promotion of the company
c) With in one month of the commencement of the business of the company
d) With in one month of incorporation of the company
6. The term of the auditor ship of first auditor would be from the date of appointment till__
a) the conclusion of statutory meeting
b) the conclusion of first annual general meeting
c) the conclusion of next annual general meeting d) the date of removal
7. In case the directions fail to appoint first auditor (s), the shareholders shall appoint them
at…..by passing a resolution
a) a general meeting b) first annual general meeting
c) statutory meeting d) annual general meeting
8. Life Insurance Corporation of India holds twenty five percent of subscribed capital of XYZ
Ltd. The appointment of statutory auditor in XYZ Ltd. Would be by__
a) ordinary resolution b) special resolution c) (a) or (b) d) none of the above
9. ICICI prudential, a life insurance company, holds thirtytwo
percent of subscribed share
capital of Delta Ltd. The statutory auditor of Delta Ltd. would be appointed by__
a) ordinary resolution b) Special resolution c) either of the above d) none
10.Which of the following statement is not true regarding appointment of statutory auditor by
the Central Government?
a) Such powers have been conferred upon it by section 224(3)
b) If a company fails to appoint an auditor at a general meeting
c) If an auditor refuses to accept appointment, the powers of the Central Government can be
exercised.
d) None of the above
11.If a casual vacancy in the office of auditor arises by his resignation it should only be filled by
the company in a……..
a) Board meeting b) extraordinary general meeting
c) General meeting d) annual general meeting
12.For the purposes of section 224(IB) the number of partners of a firm which shall be taken
into account would be as on the date of _
a) completion of audit b) auditor’s report
c) acceptance of audit d) Starting of audit work
13.Which of the following is counted for the purposes of section 224(IB) the number of partners
of a firm which shall be taken into account would be as on the data of ___
a) Joint audit b) Audit to nonprofit
companies
c) Audit of unlimited companies d) All of the above e) (a) and (b) only
14.Mr. Narayan, a Charted Accountant, has nineteen audits, Out of following audits which
audits should he accept to ensure he doesn’t violate provisions of section 224(IB) __
a) Audit of Zeba Ltd. a private company
b) Audit of branch of Pointec Ltd. a foreign company
c) Audit of two branches of Virtue Ltd. an Indian company d) All of them
15.Which audit out of the following would not be regarded as one audit for the purposes of
section 224(IB)?
a) Audit of one branch each of two different companies
b) Joint audit c) Audit head office & branches
d) Audit of one or more branches of a company
16. The auditor of a Government company is appointed by the C & AG. His remuneration is
fixed by__
a) the C & AG b) the shareholders
c) the shareholders at an annual general meeting d) the board of directors
17.The section which contains provisions regarding remuneration of the auditor is_
a) Section 224(9) b) Section224(7) c) Section224(8) d) Section224(6)
18.The authority to remove the first auditor before the expiry of term is with_
a) the shareholders in a general meeting
b) the shareholders in the first annual General meeting
c) the board of directors d) the Central Government
19.Which of the following statements is not correct regarding removal of first auditor before
expiry of the term?
a) He is removed at a general meeting
b) The shareholders are authorized to do so
c) The approval of the Central Government is required for such removal
d) The provisions for such removal are contained in section 224(7)
20.The retiring auditor does not have a right to___
a) make written representations b) get his representations circulated.
c) be heard at the meeting d) speak as a member of the company
21.Who out of the following cannot be appointed as a statutory auditor of the company?
a) Erstwhile director b) Internal auditor c) Relative of a director d) Only (b) and (c)
22.A statutory auditor has a right of access at all times to
a) Books and accounts of a company b) Books, accounts and documents of the company
c) Books, accounts and vouchers of the company
d) Notices and documents of the company
23.The auditor has a right toa)
Obtain information and explanation
b) Obtain information and explanation from the employees and officers
c) Obtain information and explanation necessary for the purpose of audit
d) Both (b) and (c)
24.The principal auditor, as per clarification issued by the ICAI, does not have any right toa)
Inspect working papers of the branch auditor b) Visit branches
c) Seek information necessary for audit purposes
d) Incorporate the branch audit report in his audit report
25.Under which of the following section auditor has a duty to enquire into six specified matters
and report by exception?
a) Section 227(4A) b) Section 227 (IA) c) Section 227 (2) d) Section 227(3)
26.The auditor has to enquire, under section 227 (IA) into different aspects, related to shares
allotted for cash for the purpose of auditor includea)
Shares against whose allotment cash has actually been received
b) Shares allotted for consideration other than cash
c) Shares allotted against a debt payable d) All of them
27.Right to visit branches has been given to the auditor under which section?
a) Section 222(3) b) Section 228(2) c) Section 228(4) d) Section 228(3)
28.Which of the following statements with regard to rules regarding exemption from branch
audit is not true?
a) A branch office of a company can be granted exemption on the basis of quantum of
activity criterion
b) If a satisfactory arrangement of scrutiny check of the books of account of a branch office
of a manufacturing company has been made, it can be exempted form branch audit
c) Cost consideration should be considered as an important factor/ground for exemption
from branch audit
d) The auditor should state in his audit report that branch office is exempted by virtue of
quantum of activity or any other basis
29.The branch auditor is appointed by –
a) Shareholders in an annual general meeting b) Shareholders in general meeting
c) Board of directors in board meeting d) Any of the above
30.Auditor of a ……company does not have right to visit foreign branches of the company
a) Unlimited liability b) Manufacturing c) Banking d) Nonprofit
making
31.Special audit is conducted at the order of the Central Government. Which section gives such
powers?
a) Section 233(A) b) Section 233A c) Section 242(A) d) Section 242A
32.Who among the following can be appointed as special auditor by the Central Government?
a) The statutory auditor b) chartered accountant in practice
c) Any chartered accounted who is not in practice d) Both (a) and (b)
33.The scope of the audit including reference to the pronouncements of the ICAI, which the
auditor adheres to, generally is communicated to the client in the ____
i) auditor’s report ii) engagement letter iii) representation letter
a) i) only b) Both (i) and (ii) c) Both (i) and (iii) d) All the above
34.If any director is disqualified from being appointed under section 274(1) (g), the auditor
should mention this fact in his audit report. For this purpose, how does he determine their
eligibility :
a) He obtains a representation from each director
b) He obtains a management representation
c) He enquiries from Registrar of Companies d) Any one of the above
35.As per the ‘Statement on Qualification in Auditor’s Report’s issued by the ICAI, the auditor,
Under section 227(3) has to gave a statement of fact on_
a) proper books of account b) accounting standards
c) cess payable under section 441A d) None of the above
36.The date on auditor’s report should not be__
a) the data of AGM
b) later than the date on which the accounts are approved in board’s meeting
c) earlier than the date on which the accounts are approved by the management
d) Both (a) and (b)
37.Section 227(2) of the Companies Act, requires the auditor to give his report to the members
of the company on certain matters. Which of the following is not included in the above?
a) Accounts examined by him
b) Every balance sheet and profit and loss account laid before a general meeting during his
tenure
c) Every document that is a part of or ‘annexed to’ the balance sheet
d) Every document which is attached to the profit and loss account
38.When restrictions that significantly affect the scope of the audit are imposed by the client,
the auditor generally should issue which of the following opinion?
a) Qualified opinion b) Disclaimer of opinion c) Adverse opinion
d) Unqualified report with ‘an emphasis of matter’ paragraph;
39.Which of the following report not result in qualification of the auditor’s opinion due to a
scope limitation?
a) Restrictions the client imposed b) Reliance on the report of other auditor
c) Inability to obtain sufficient appropriate evidential matter
d) Inadequacy of accounting records
40.The inventory consists of about one per cent of all assets. The client has imposed restriction
on auditor to prohibit observation of stock take. The auditor cannot apply alternate audit
procedures.
a) unqualified opinion b) qualified opinion c) disclaimer of opinion d) adverse opinion
41.If in the above question, the inventory consisted of about ten per cent of total assets, other
conditions remaining same, the auditor should issue __
a) unqualified opinion b) qualified opinion c) disclaimer of opinion d) adverse opinion
42.The auditor has serious concern about the going concern of the company. It is dependent
on company’s obtaining a working capital loan from a bank which has been applied for. The
management of the company has made full disclosure of these facts in the notes to the
balance sheet. The auditor is satisfied with the level of disclosure. He should issue_
a) unqualified opinion b) unqualified opinion with reference to notes to the accounts
c) qualified opinion d) disclaimer of opinion
43.Which of the following is true about explanatory notes?
a) These are given by the directors of the company
b) These are given to adhere to requirements of section 211.
c) These are given by auditors of the company in auditor’s report d) All of the above
44.The client changed method of depreciation from straight line to written down value method.
This has been disclosed as a note to the financial statements. It has an immaterial effect on
the current financial statements. It is expected, however, that the change will have a
significant effect on future periods. Which of the following option should the auditor
express?
a) Unqualified opinion b) Qualified opinion c) Disclaimer of opinion d) Adverse opinion
45.Which of the following is not true regarding requirements under section 227(3) (f) of the
Companies Act, 1956?
a) The auditor has to satisfy himself whether any of the directors of the company, whether
public or private, are disqualified from being appointed as directors as per section 274(1) (g).
b) Section 274(1) (g) is applicable to appointment of directors both in public and private
companies but reporting is limited to only those directors of a company who are also
directors of a public company
c) The auditor requires every director to submit a written representation in respect of each
public company, of which the is a director, as to whether such company has defaulted in
terms of provisions of sections 274(1) (g)
d) The disqualification should be considered on the date of audit report.
46.The management of a company, to which AS3.
is not applicable, does not include statement
of cash flows in its annual report. The auditor should expressa)
Unqualified opinion b) Qualified opinion c) Adverse opinion
d) Any of these depending upon materiality and pervasiveness and adequacy of disclosure
47.In case the auditor gives a disclaimer of opinion in the audit report which of the following
paragraph(s) of a standard unqualified audit report are modified?
a) Scope paragraph b) Opinion paragraph
c) Scope and opinion paragraphs d) Introductory, scope and opinion paragraph
48.A departure from recognized accounting principle is disclosed in a note to the financial
statements. The auditor should
a) issue a standard unqualified audit report b) issue a qualified report
c) issue an unqualified report with ‘emphasis of matter’ paragraph d) disclaim opinion
49.AB & Co, chartered accountant, have been requested by their client XYZ Ltd. not to confirm
accounts receivables because of concerns about creasing conflicts with customers over
amounts owed. The auditors were satisfied concerning receivables after applying alternative
audit procedures AB & Co.’s auditors report likely contained
a) Qualified opinion b) Disclaimer of opinion
c) Unqualified I opinion with an explanatory paragraph d) Unqualified opinion
50.The auditor should state the reasons for his reservations in audit report and should try to
quantify the effect on them. This should be done in case he has expressed _
i) a qualified opinion ii) an unqualified opinion with emphasis of matter paragraph
iii) an adverse opinion iv) a disclaimer of opinion
a) i) only b) i) and (iv) only c) i), iii) and (iv) only d) All of the above
51.Companies exempted from application of CARO, 2003 does not include_
a) a banking company b) an insurance company
c) a private limited company with paid up capital and reserves not more than fifty five lakh
d) a licensed company
52.Under CARO, 2003, the auditor’s report should include report about maintenance of proper
recording relating to____
a) Fixed assets and cost b) Fixed assets, cost and investments
c) Fixed assets , cost investments and inventories d) Fixed assets, cost and inventory
53.Under CARO, 2003 the auditor is required to report on __
a) arrears of cumulative preference dividends
b) Preferential allotment of shares to related party
c) disposal of fixed assets and its effect on going concern.
d) unsecured loans granted to related party.
Answers
1. b 2. a 3. c 4. d 5. d
6. b 7. a 8. b 9. a 10. b
11. c 12. c 13. e 14. d 15. a
16. b 17. c 18. a 19. c 20. d
21. b 22. c 23. d 24. a 25. b
26. d 27. c 28. b 29. b 30. b
31. c 32. b 33. b 34. a 35. c
36. c 37. d 38. a 39. b 40. a
41. c 42. b 43. a 44. a 45. d
46. a 47. c 48. b 49. c 50. a
51. c 52. c 53. a
1. Who is responsible for the appointment of statutory auditor of a limited company ?
a) Directors of the company b) Members of the company
c) The Central Government d) All of the above
2. Which of the following sections deal with qualifications of the auditor ?
a) Section 226 (1) and section 226(2) b) Section 224 (1) and section 224 (2)
c) Section 226 (3) and section 226(4) d) Section 224(3) & Sec.224
3. Which of the following statement is not true?
a) A partnership firm can be appointed as a statutory auditor of limited company
b) Appointment can be made in the name of the firm
c) Majority of the partners should be practicing in India
d) All partners should be chartered accountants
4. As per the requirements of section 226(3) and 226(4) a person is disqualified from being
appointed as a statutory auditor if he holdsa)
Equity shares or debentures of the company
b) Equity shares carrying voting of the company
c) Shares carrying voting rights of the company
d) Security carrying voting rights of the company
5. The board of directors shall appoint first auditor of a company
a) With in one month of completion of capital subscription state of the company
b) With in one month of the promotion of the company
c) With in one month of the commencement of the business of the company
d) With in one month of incorporation of the company
6. The term of the auditor ship of first auditor would be from the date of appointment till__
a) the conclusion of statutory meeting
b) the conclusion of first annual general meeting
c) the conclusion of next annual general meeting d) the date of removal
7. In case the directions fail to appoint first auditor (s), the shareholders shall appoint them
at…..by passing a resolution
a) a general meeting b) first annual general meeting
c) statutory meeting d) annual general meeting
8. Life Insurance Corporation of India holds twenty five percent of subscribed capital of XYZ
Ltd. The appointment of statutory auditor in XYZ Ltd. Would be by__
a) ordinary resolution b) special resolution c) (a) or (b) d) none of the above
9. ICICI prudential, a life insurance company, holds thirtytwo
percent of subscribed share
capital of Delta Ltd. The statutory auditor of Delta Ltd. would be appointed by__
a) ordinary resolution b) Special resolution c) either of the above d) none
10.Which of the following statement is not true regarding appointment of statutory auditor by
the Central Government?
a) Such powers have been conferred upon it by section 224(3)
b) If a company fails to appoint an auditor at a general meeting
c) If an auditor refuses to accept appointment, the powers of the Central Government can be
exercised.
d) None of the above
11.If a casual vacancy in the office of auditor arises by his resignation it should only be filled by
the company in a……..
a) Board meeting b) extraordinary general meeting
c) General meeting d) annual general meeting
12.For the purposes of section 224(IB) the number of partners of a firm which shall be taken
into account would be as on the date of _
a) completion of audit b) auditor’s report
c) acceptance of audit d) Starting of audit work
13.Which of the following is counted for the purposes of section 224(IB) the number of partners
of a firm which shall be taken into account would be as on the data of ___
a) Joint audit b) Audit to nonprofit
companies
c) Audit of unlimited companies d) All of the above e) (a) and (b) only
14.Mr. Narayan, a Charted Accountant, has nineteen audits, Out of following audits which
audits should he accept to ensure he doesn’t violate provisions of section 224(IB) __
a) Audit of Zeba Ltd. a private company
b) Audit of branch of Pointec Ltd. a foreign company
c) Audit of two branches of Virtue Ltd. an Indian company d) All of them
15.Which audit out of the following would not be regarded as one audit for the purposes of
section 224(IB)?
a) Audit of one branch each of two different companies
b) Joint audit c) Audit head office & branches
d) Audit of one or more branches of a company
16. The auditor of a Government company is appointed by the C & AG. His remuneration is
fixed by__
a) the C & AG b) the shareholders
c) the shareholders at an annual general meeting d) the board of directors
17.The section which contains provisions regarding remuneration of the auditor is_
a) Section 224(9) b) Section224(7) c) Section224(8) d) Section224(6)
18.The authority to remove the first auditor before the expiry of term is with_
a) the shareholders in a general meeting
b) the shareholders in the first annual General meeting
c) the board of directors d) the Central Government
19.Which of the following statements is not correct regarding removal of first auditor before
expiry of the term?
a) He is removed at a general meeting
b) The shareholders are authorized to do so
c) The approval of the Central Government is required for such removal
d) The provisions for such removal are contained in section 224(7)
20.The retiring auditor does not have a right to___
a) make written representations b) get his representations circulated.
c) be heard at the meeting d) speak as a member of the company
21.Who out of the following cannot be appointed as a statutory auditor of the company?
a) Erstwhile director b) Internal auditor c) Relative of a director d) Only (b) and (c)
22.A statutory auditor has a right of access at all times to
a) Books and accounts of a company b) Books, accounts and documents of the company
c) Books, accounts and vouchers of the company
d) Notices and documents of the company
23.The auditor has a right toa)
Obtain information and explanation
b) Obtain information and explanation from the employees and officers
c) Obtain information and explanation necessary for the purpose of audit
d) Both (b) and (c)
24.The principal auditor, as per clarification issued by the ICAI, does not have any right toa)
Inspect working papers of the branch auditor b) Visit branches
c) Seek information necessary for audit purposes
d) Incorporate the branch audit report in his audit report
25.Under which of the following section auditor has a duty to enquire into six specified matters
and report by exception?
a) Section 227(4A) b) Section 227 (IA) c) Section 227 (2) d) Section 227(3)
26.The auditor has to enquire, under section 227 (IA) into different aspects, related to shares
allotted for cash for the purpose of auditor includea)
Shares against whose allotment cash has actually been received
b) Shares allotted for consideration other than cash
c) Shares allotted against a debt payable d) All of them
27.Right to visit branches has been given to the auditor under which section?
a) Section 222(3) b) Section 228(2) c) Section 228(4) d) Section 228(3)
28.Which of the following statements with regard to rules regarding exemption from branch
audit is not true?
a) A branch office of a company can be granted exemption on the basis of quantum of
activity criterion
b) If a satisfactory arrangement of scrutiny check of the books of account of a branch office
of a manufacturing company has been made, it can be exempted form branch audit
c) Cost consideration should be considered as an important factor/ground for exemption
from branch audit
d) The auditor should state in his audit report that branch office is exempted by virtue of
quantum of activity or any other basis
29.The branch auditor is appointed by –
a) Shareholders in an annual general meeting b) Shareholders in general meeting
c) Board of directors in board meeting d) Any of the above
30.Auditor of a ……company does not have right to visit foreign branches of the company
a) Unlimited liability b) Manufacturing c) Banking d) Nonprofit
making
31.Special audit is conducted at the order of the Central Government. Which section gives such
powers?
a) Section 233(A) b) Section 233A c) Section 242(A) d) Section 242A
32.Who among the following can be appointed as special auditor by the Central Government?
a) The statutory auditor b) chartered accountant in practice
c) Any chartered accounted who is not in practice d) Both (a) and (b)
33.The scope of the audit including reference to the pronouncements of the ICAI, which the
auditor adheres to, generally is communicated to the client in the ____
i) auditor’s report ii) engagement letter iii) representation letter
a) i) only b) Both (i) and (ii) c) Both (i) and (iii) d) All the above
34.If any director is disqualified from being appointed under section 274(1) (g), the auditor
should mention this fact in his audit report. For this purpose, how does he determine their
eligibility :
a) He obtains a representation from each director
b) He obtains a management representation
c) He enquiries from Registrar of Companies d) Any one of the above
35.As per the ‘Statement on Qualification in Auditor’s Report’s issued by the ICAI, the auditor,
Under section 227(3) has to gave a statement of fact on_
a) proper books of account b) accounting standards
c) cess payable under section 441A d) None of the above
36.The date on auditor’s report should not be__
a) the data of AGM
b) later than the date on which the accounts are approved in board’s meeting
c) earlier than the date on which the accounts are approved by the management
d) Both (a) and (b)
37.Section 227(2) of the Companies Act, requires the auditor to give his report to the members
of the company on certain matters. Which of the following is not included in the above?
a) Accounts examined by him
b) Every balance sheet and profit and loss account laid before a general meeting during his
tenure
c) Every document that is a part of or ‘annexed to’ the balance sheet
d) Every document which is attached to the profit and loss account
38.When restrictions that significantly affect the scope of the audit are imposed by the client,
the auditor generally should issue which of the following opinion?
a) Qualified opinion b) Disclaimer of opinion c) Adverse opinion
d) Unqualified report with ‘an emphasis of matter’ paragraph;
39.Which of the following report not result in qualification of the auditor’s opinion due to a
scope limitation?
a) Restrictions the client imposed b) Reliance on the report of other auditor
c) Inability to obtain sufficient appropriate evidential matter
d) Inadequacy of accounting records
40.The inventory consists of about one per cent of all assets. The client has imposed restriction
on auditor to prohibit observation of stock take. The auditor cannot apply alternate audit
procedures.
a) unqualified opinion b) qualified opinion c) disclaimer of opinion d) adverse opinion
41.If in the above question, the inventory consisted of about ten per cent of total assets, other
conditions remaining same, the auditor should issue __
a) unqualified opinion b) qualified opinion c) disclaimer of opinion d) adverse opinion
42.The auditor has serious concern about the going concern of the company. It is dependent
on company’s obtaining a working capital loan from a bank which has been applied for. The
management of the company has made full disclosure of these facts in the notes to the
balance sheet. The auditor is satisfied with the level of disclosure. He should issue_
a) unqualified opinion b) unqualified opinion with reference to notes to the accounts
c) qualified opinion d) disclaimer of opinion
43.Which of the following is true about explanatory notes?
a) These are given by the directors of the company
b) These are given to adhere to requirements of section 211.
c) These are given by auditors of the company in auditor’s report d) All of the above
44.The client changed method of depreciation from straight line to written down value method.
This has been disclosed as a note to the financial statements. It has an immaterial effect on
the current financial statements. It is expected, however, that the change will have a
significant effect on future periods. Which of the following option should the auditor
express?
a) Unqualified opinion b) Qualified opinion c) Disclaimer of opinion d) Adverse opinion
45.Which of the following is not true regarding requirements under section 227(3) (f) of the
Companies Act, 1956?
a) The auditor has to satisfy himself whether any of the directors of the company, whether
public or private, are disqualified from being appointed as directors as per section 274(1) (g).
b) Section 274(1) (g) is applicable to appointment of directors both in public and private
companies but reporting is limited to only those directors of a company who are also
directors of a public company
c) The auditor requires every director to submit a written representation in respect of each
public company, of which the is a director, as to whether such company has defaulted in
terms of provisions of sections 274(1) (g)
d) The disqualification should be considered on the date of audit report.
46.The management of a company, to which AS3.
is not applicable, does not include statement
of cash flows in its annual report. The auditor should expressa)
Unqualified opinion b) Qualified opinion c) Adverse opinion
d) Any of these depending upon materiality and pervasiveness and adequacy of disclosure
47.In case the auditor gives a disclaimer of opinion in the audit report which of the following
paragraph(s) of a standard unqualified audit report are modified?
a) Scope paragraph b) Opinion paragraph
c) Scope and opinion paragraphs d) Introductory, scope and opinion paragraph
48.A departure from recognized accounting principle is disclosed in a note to the financial
statements. The auditor should
a) issue a standard unqualified audit report b) issue a qualified report
c) issue an unqualified report with ‘emphasis of matter’ paragraph d) disclaim opinion
49.AB & Co, chartered accountant, have been requested by their client XYZ Ltd. not to confirm
accounts receivables because of concerns about creasing conflicts with customers over
amounts owed. The auditors were satisfied concerning receivables after applying alternative
audit procedures AB & Co.’s auditors report likely contained
a) Qualified opinion b) Disclaimer of opinion
c) Unqualified I opinion with an explanatory paragraph d) Unqualified opinion
50.The auditor should state the reasons for his reservations in audit report and should try to
quantify the effect on them. This should be done in case he has expressed _
i) a qualified opinion ii) an unqualified opinion with emphasis of matter paragraph
iii) an adverse opinion iv) a disclaimer of opinion
a) i) only b) i) and (iv) only c) i), iii) and (iv) only d) All of the above
51.Companies exempted from application of CARO, 2003 does not include_
a) a banking company b) an insurance company
c) a private limited company with paid up capital and reserves not more than fifty five lakh
d) a licensed company
52.Under CARO, 2003, the auditor’s report should include report about maintenance of proper
recording relating to____
a) Fixed assets and cost b) Fixed assets, cost and investments
c) Fixed assets , cost investments and inventories d) Fixed assets, cost and inventory
53.Under CARO, 2003 the auditor is required to report on __
a) arrears of cumulative preference dividends
b) Preferential allotment of shares to related party
c) disposal of fixed assets and its effect on going concern.
d) unsecured loans granted to related party.
Answers
1. b 2. a 3. c 4. d 5. d
6. b 7. a 8. b 9. a 10. b
11. c 12. c 13. e 14. d 15. a
16. b 17. c 18. a 19. c 20. d
21. b 22. c 23. d 24. a 25. b
26. d 27. c 28. b 29. b 30. b
31. c 32. b 33. b 34. a 35. c
36. c 37. d 38. a 39. b 40. a
41. c 42. b 43. a 44. a 45. d
46. a 47. c 48. b 49. c 50. a
51. c 52. c 53. a
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