T.Y B.COM
SEMESTER - 6
COMPANY AUDIT
(CA)
MCQS - FEBRUARY 2017
1. In case of company other than accompany whose accounts are subject to audit by an auditor appointed by CAG, a casual vacancy in the office of auditor arises by his resignation it should only be filled by the company in a
a) Auditors meeting
b) Board meeting
c) General meeting
d) Annual general meeting
2. Which of the following can be appointed as company auditor
a) Any officer or employee of the company
b) Body corporate
c) Firm of which all the partners are chartered accountants practicing India
d) (b) and (C) above
3. Any auditor appointed to fill a casual vacancy shall hold office
a) Till the end of the accounting period during which he is appointed
b) Till the end of the immediately succeeding accounting period during which ne is appointed
c) Till the conclusion of the next annual general meeting
d) Till the date of termination as mentioned in the letter of appointment
4. Fraud can be committed by way of
a) Misappropriation of goods
b) Defalcation of cash
c) Manipulation of accounts
d) All of the above
5. A auditor purchased goods worth Rs.20,000 on credit from C Ltd. of which he is auditor.
a) Disqualification will be attracted
b) He can adjust against his fees
c) Declaration for the same should be given
d) Disqualification will not be attracted
6. Company shall create Debenture Redemption Reserve equivalent to at least _________ through the debenture issue before debenture redemption commences
a) 20 Percent
b) 25 Percent
c) 50 Percent
d) 15 Percent
7. Following are some of the stage of an investigation
1. Plan work to be done and timings
2. Obtain and agree instructions from the client
3. Make report
4. Collect necessary information
What is the correct sequence of above ?
a) 1,2,3,4
b) 2,1,3,4
c) 1,2,4,3
d) 2,1,4,3
8. The auditor of a Government company is appointed by the CAG. His remuneration is fixed by
a) The CAG
b) The shareholders in a general meeting
c) The shareholders at an annual general meeting
d) The board of directors
9. The application money payable on a share should not be less than the following percentage of the face value of share:
a) 5%
b) 10 %
d) 25 %
c) 20 %
10. For which purpose can the premium received on share not be used?
a) For writing off the discount on company's debentures
b) For writing off the preliminary expenses of the company
c) For distributing Dividend
d) For providing for the premium payable on the redemption of preference shares
11. XYZ is a firm of chartered accountants having three partners, all of whom are in full-time practice. What is the total number of companies for which the firm can act as auditor at a given point of time ?
a) 40
b) 30
c) 60
d) 20
12. Statutory duties of a company auditor are determined by the:
a) Memorandum of Association
b) Companies Act, 2013
c) Articles of Association
d) Agreement between company and auditor
13. Misfeasance may be defined a :
a) Duty to take care
b) Breach of duty or Trust
c) Negligence without any loss or damage
d) Loss or damage without any negligence
14. Dividend can not be paid out of-
a) Profit of current year without providing for the depreciation
b) Profit of past years after depreciation
c) Out of money provided by central government
d) Out of free reserves
15. The remuneration of an auditor of a company may not be fixed by the shareholders in case of -
a) The first auditors
b) The auditors appointed in any casual vacancy caused by resignation
c) The retiring auditors who are re-appointed
d) The auditor appointed in place of the retiring auditors
16. When the remuneration of the re-appointed auditor is not fixed by way of resolution at the general meeting
a) The amount fixed for the previous year is considered as the remuneration for the current year
b) Remuneration of the previous year is increased by 10% in the current year
c) No remuneration shall be given
d) It is decided in the separate general meeting
17. The first auditors of a company are appointed
a) By the shareholders in their first meeting to be held within 90 days of the incorporation of the company
b) By the shareholders within 30 days of their first meeting held after the commencement of business by the company
c) By the directors in the first meeting of the Board of Directors to be held within 30 days of the incorporation of the company
d) Through the appointments clause in the memorandum of association
18. According to section 139(1) of the Companies Act, 2013 every company shall at the first annual general meeting, appoint an individual or a firm as an auditor who shall hold office
a) From the conclusion of the meeting until the beginning of the next annual general meeting
b) From the conclusion of the meeting until the conclusion of the next accounting year,
c) From the beginning of the accounting year until the end of the accounting year
d) From the conclusion of that meeting till the conclusion of its sixth annual general meeting.
19. investigation means ______.
a) Special Audit
b) Cost Audit
c) Tax Audit
d) Statutory Audit
20. Unclaimed amount of dividend to be transfer to ________.
a) Investor Education Account
b) Investor Education and Protection Fund
c) Investor Safeguard Account
d) Investor Protection Account
21. Maximum period of redemption of debenture other than infrastructure company is __________
a) 20 years
b) 15 years
c) 30 years
d) 10 years
22. If Company declare dividend out of reserves, amount withdrawn from reserves should not exceed __________ paid up capital & reserves.
a) 10%
b) 15%
c) 5%
d) 20%
23. The amount of dividend shall be deposited in a scheduled bank in a separate account within days from the date of declaration of such dividend.
a) 5
b) 7
c) 60
d) 30
24. 'Teeming And Lading' is a technique, exercised by the staff of the client with motive of:
a) Misappropriation of goods
b) Defalcation of cash
c) Falsification of accounts
d) None of above
25. In case of Government Companies appointment or re-appointment of the Auditor(s) is done by
a) State Government
b) Board of Directors of the Company
c) Central Government
d) Comptroller and Auditor General
26. Which of the following statement is FALSE
a) The auditor shall be given a reasonable opportunity of being heard before being removed.
b) Removal of auditor before expiry of his term shall require special resolution and previous approval of Central Government
c) The auditor who has resigned shall file within a period of 30 days from the date of resignation, a statement in the prescribed form with the company and registrar of companies
d) Central Govt. can remove the auditor in Board meeting.
27. Which of the following is NOT the right of an Auditor
a) Right to visit branches
b) Right to access Books of Accounts
c) Right to receive Notice of the Board Meeting
d) Right to obtain information & explanation
28. Which of the following is NOT correct for an outgoing auditor being removed by Company
a) He may ask Co. to send written representation to the Shareholders
b) If a copy of written representation is not send, he may insist on being heard orally in general meeting.
c) He may ask for indemnification from Company for loss of audit fees.
d) He can attend the meeting and address to Shareholders in AGM in
which he was to be removed.
29. Which of the following statement is correct for Investigation
a) Investigation is carried out at regular interval
b) Investigation is compulsory for Joint Stock Company
c) It is not necessary that investigator must be chartered accountant
d) It is compulsory that investigator must be chartered accountant
30. Which of the following statements is not correct regarding removal of rust 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 directors are not authorized to do so
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