COMPANY AUDIT - MARCH 2018 (MCQS)

T.Y B.COM

SEMESTER - 6

COMPANY AUDIT

(CA)

MCQS - MARCH 2018

1. The subsequent auditor appointed in company by members shall hold office from the conclusion of first annual meeting till the conclusion of its ________ annual general meeting subject to ________ at eveny AGM.

A) Subsequent, ordinary resolution 

B) fifty, board ratification

C) Sixth, ratification

D) subsequent, special resolution

2. The amount of dividend including interim dividend shall be deposited in schedule bank in a separate account within how many days from the date of cl ecI aeration of such dividend as per Section 123 (4)?

A) 05 Days

B) 07 Days

C) 10 Days

D) 15 Days

3. To protect interest of debenture holders, the company shall execute a debenture trust deed not later than _______ after the allotment of debentures.

A) 1180 Days 

B) 60 Days

C) 90 Days

D) 30 Days

4. Remuneration of Auditor includes

A) Fees to auditor

B) Expenses if any incurred by auditor for audit

C) Cost of any facility provided to him

D) All of the above

5. Unpaid or Unclaimed dividend account of company is transferred to __________. 

A) outstanding & Unpaid dividend Fund

B) investor Protection & Education Fund

C) investor Education & Protection Fund 

D) Unpaid & Outstanding dividend Fund

6. Dividend cannot be paid out of ________

A) Money provided by the Central or State Government as a guarantee

B) Profits of previous years after providing depreciation

C) Securities Premium Account

D) Current year profits of company after providing depreciation

7. In case of joint stock companies, audit is __________  while investigation is  _________. 

A) Discretionary, Mandatory

B) Non-Mandatory Compulsory

C) Compulsory, Optional  

D) Optional, Compulsory

8. Criminal liability of auditor occurs when  _________

A) a case is filed against an auditor in civil court.

B) failure to exercise reasonable care and skill.

C) It results an offence against the statutory provisions specifically laid down.

D) None of the above

9. Qualification of an Investigator should be  _________. 

A) Chartered Accountant

B) Cost Accountant

C) Company secretary

D) None of the above

10. Services not to be render by an auditor as per section 144 includes

i Accounting and book keeping

ii. Internal audit

iii Actuarial services

iv. Management services

A) ii and iii

B) i, ii, iii and iv

C) i, ii and iii

D) i and ii

11. According to section 141 (1) of the Companies Act, 2013, a person shall be eligible for appointment as ______ of a company only if he/she is a ________. 

A) an auditor, Independent

B) a director, Chartered Accountant

C) a director, Independent

D) an auditor, Chartered Accountant

12. Which of the qualities an investigator must possess in Business Investigation work ?

A) Tactfulness

B) Patience

C) Quick understanding

D) All of the above

13. The authorized share capital can be verified with reference to the amount shown in the ________of the company.

A) memorandum of association

B) minutes of the AGM

C) prospectus

D) articles of association

14. Investigation is concerned with _________. 

A) Conclusive Evidence

B) Substantive Evidence

C) Both, A,B

D) None of the above

15. A person is disqualified to be appointed as an auditor of company whose relative is holding any security of or interest in the company having face value of ________. 

A) Rs. 5000

B) Rs.  75,000

C) Rs. 10,000 

D) Rs. 1,10,000

16. investigation is conducted

A) As and when required

B) Regularly

C) every 3 to 5 years

D) Yearly

17. For declaration of dividend out of reserves, after withdrawal from reserves, balance of reserves should not be less than  ________ as per latest audited financial statements.

A) 15% of paid up Capital

B) 15% of free reserve

C) 15% of free and special reserve

D) 15% of special reserve

18. important points to be consider while recommending dividend

i. Provisions of Memorandum and Article of Associations

ii. Provisions of Companies Act 2013

iii. Significance of Legal Decisions

A) i and iii

B) i and ii

C) ii and iii

D) i, ii and iii

19. in case of appointment of an auditor of a company other than Government company, who will fix remuneration?

A) Shareholders in general meeting 

B) Central Government

C) State Government

D) None of the above

20. Mr. Balvant, a practicing chartered account is providing management consultancy services to X LTD. he _________ be appointed as an auditor of X LTD.

A) can

B) can, on recommendation of shareholders

C) can on recommendation of audit committee

D) can not 

21. The first auditor of a company, other than a government company shall be appointed by the _________ within ______ days from the date of registration of the company.

A) board of directors, 60

B) Shareholders, 30

C) board of directors, 30

D) shareholders, 60

22. In the case of resignation of an auditor, he has to file a statement of purpose of resignation within a period of _____ from the date of resignation with the company and _________ indicating the reason and other facts as may be relevant.

A) 45 days, Audit Committee

B) 30 days, SEBI

C) 7 days, ROC & SEBI

D) 30 days, ROC

23. An auditor is treated as an _______ of the company under various provisions of the Companies Act, 2013. 

A) employer

B) officer

C) agent

D) employee

24. The auditor appointed under section 139 may be removed from his office ________ only by a special resolution of the company, after obtaining the previous approval of the _________. 

A) before the expiry of his term, Central Government

B) at the expiry of his term, Audit Committee.

C) befor the expiry of his term, Audit committee

D) at the expiry of his term, board of director.

25. Appointment of subsequent auditor under section 139 (5) shall be made by CAG within _______ days from the commencement of financial year,

A) 60 days

B) 30 days

C) 90 days

D) 180 days

26. An auditor purchased goods worth Rs.4,50,000 on credit from a company being audited by him, the company allowed him one month's credit, which is normally allowed to all known customers he will be ___________ as an auditor.

A) qualified by passing special resolution

B) disqualified

C) disqualified by passing special resolution

D) qualified

27. Where a dividend has been declared by a company but has not been paid or claimed within thirty days from the date of the declaration, the company shall transfer the total amount of dividend to a special account to be opened in any scheduled bank to be called

A) Unpaid and Deferred Dividend Account

B) Deferred Dividend Account

C) Unpaid Dividend Account

D) Outstanding Dividend Account

28. Tenure of first auditor shall be from the date of appointment till the conclusion of ________. 

A) first Annual Year

B) A first board Meeting

C) sixth AGM

D) first AGM

29. Mr. Ashok is a member of the ICAl, does not hold a Certificate of practice. His appointment as an auditor is _______. 

A) Valid 

B) Invalid 

C)  to be approved by Board of Directors

D) to be approved by Shareholders at AGM

30. For which purpose, security premium received on issue of shares, can not be used

A) for distribution dividend

B) for writing off premium payable on the redemption of preference share

C) for writing off the discount on issue of debentures

D) for writing off the preliminary expenses of the company

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