Previous Exam Trend Analysis
Year Question No. Chapter Name Marks Dec-19 a b c d a b c d e i ii iii iv v a b c a b c d a b c I-9
Year Question No. Chapter Name Marks d e i ii iii iv v a b Dec.20 a b c d a b c d e i ii iiiiv v a b c a b c d ab I-10
Year Question No.
c d e i ii iii iv v a b June21 a b c d a b c d e i ii iii iv v a b c a b c d a b
Chapter Name Marks
I-11
Year Question No.
c d e i iiiii iv v a b Dec.21 a b c d a b c d e i ii iii iv v a b c a b c d I-12
Chapter Name Marks
Year Question No.
Chapter Name
Marks
a b c d e i ii iii iv v iii iv June22 a b c d a b c d e i ii iii iv v a b c a b c d a I-13
Year Question No.
Name Marks bc d ei ii iii iv v iii iv Dec. 2022 a b c d a b c d e iii iii iv v a b c a b c I-14
Chapter
Year Question No. Chapter Name Marks d a b c d e i ii iii iv v iii iv I-15
Chapter-wise Comparison with Study Material
Chapter No. Name of Chapter of Scanner Study Material Chapter No. Name of Chapter in ICSI Study Material ----
I-17
Chapter No. Name of Chapter of Scanner Study Material Chapter No. Name of Chapter in ICSI Study Material I-18
9
CHAPTER
ACCOUNTS, AUDIT AND AUDITORS
SHORT NOTE ON TRUE AND FAIR VIEW
Que. 1: Write a Short Note on: True and Fair View. (December 2011) (4 Marks) Or
Every financial statement of the company must give true and fair view of the state of affairs of the company at the end of the financial year. (June 2019) (5 Marks)
Ans.:
True and Fair view in respect of financial statement means
9.1
SHORT NOTE ON APPOINTMENT OF COST AUDITOR
Que. 2: Write a Short Note on: Appointment of Cost Auditor. (June 2012) (4 Marks)
Ans.: Appointment of Cost Auditor [Section 148(3)]:
Further Rule 14 of Companies(Audit & Auditors), Rules, 2014 provides that:
9.2
a iii b i.e.
SHORT NOTE ON INTANGIBLE ASSETS
Que. 3: Write a Short Note on: Intangible Assets (June 2013) (4 Marks)
Ans.:
SHORT NOTE ON APPROVAL AND SIGNING OF BALANCE SHEET & PROFIT AND LOSS ACCOUNT
Que. 4: Write a Short Note on: Approval and Signing of the balance sheet and profit and loss account. (December 2013) (4 Marks) Or
Financial Statement shall be signed only by the Chairperson of the company. Explain (June 2015) (4 Marks) Or
Ritesh was appointed as a Director, Finance of a listed company. During his meeting with the statutory auditor, he represented that since Chief Financial Officer (CFO) who is a Chartered Accountant has already finalized the financial statements, he as well as the Board of directors doesn’t have any responsibilities insofar as preparation of financial statements are concerned. (December 2022) (5 Marks)
Ans.:
Approval and signing of financial statement [Section 134(1)]:
9.3
-
SHORT NOTE ON QUALIFICATION AND DISQUALIFICATION OF AUDITORS
Que. 5: Write a short note on: Qualification and disqualification of auditors. (June 2014) (4 Marks)
Ans.:
Qualifications:
Disqualification:
Section 141(3) of the Companies Act, 2013, read with Rule 10 prescribed the following persons shall not be eligible for appointment as an auditor of a company, namely:
9.4
i ii -
POWER OF DIRECTORS TO APPROVE THE FINANCIAL STATEMENT
Que. 6: The power of directors to approve the financial statement can be delegated to a committee of director or some of the directors. Comment. (June 2010) (4 Marks)
Ans.:
Approval and signing of financial statement [Section 134(1)]
Thus, to approve the same the financial statement cannot be delegated to a committee of directors or some of the Directors.
Que. 7: It is not obligatory for every company to preserve its books of account. Comment. (June 2012) (5 Marks)
9.5-
9.6
Ans.: Preservation of Books of Account [Section 128(5)]:
Regulation 9 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 provides following for preservation of documents:
BOOKS OF ACCOUNT
Que. 8: Where a company has a branch office, whether in India or abroad, the original books of account, records, etc of the branch office will have to be maintained in the registered office of the company.
Ans.:
(June 2013) (5 Marks)
As per Section 128(1) of the Companies Act, 2013
As per Rule 4(1) of the Rules,
Que. 9: A director has absolute right of inspection of books of account. Comment.
(December 2013) (4 Marks)
a b
Ans.:
Inspection of books of account [Section 128(3)]: -
Que. 10: Books of account have to be kept only at the registered office of the company. As a corporate consultant give your comments in this regard (June 2021) (3 Marks)
Ans.: within seven days of such decision
e-form AOC 5
NOTES ON ACCOUNTS
Que. 11: Mention the importance of ‘notes on accounts’. Will it convey meaning to stakeholders? (December 2014) (4 Marks)
Ans.:
“Notes on Account”
9.7
SECRETARIAL AUDIT
Que. 12: Explain the provisions of Companies Act, 2013 relating to ‘secretarial audit’. State whether ‘secretarial audit’ is mandatory for all companies.
(June 2015) (4 Marks) Or
Explain with reference to the provisions of Companies Act, 2013, the meaning and importance of ‘secretarial audit’. Which companies are required to get the ‘secretarial audit’ conducted?
(December 2015) (4 Marks) Or
Who will appoint Secretarial Auditor of the Company: Board of directors or shareholders? What is the duty of Board of Directors towards secretarial auditor and audit report?
Ans.:
As per Section 204 of the Companies Act, 2013
(June 2018) (4 Marks)
As per Rule 8 of the Companies (Meeting of Board & its Powers) Rules, 2014,
As per Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014:
9.8
-
For the purposes of Section 204(1) of the Companies Act, 2013, the other class of companies shall be as under:
Explanation
Note: Inserted by Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2020 Dated 03rd January, 2020 Amendment effective from on or after 1st April, 2020.
Secretarial Audit Report Form MR-3.
Que. 13: Chief Financial Officer (CFO) of a conglomerate is of the view that secretarial audit is mandatory for all the companies. He has approached you to determine whether secretarial audit is applicable in case of the following companies :
INTERNAL AUDIT
Que. 14: Answer the following by explaining the provisions of the Companies Act, 2013 relating to internal audit:
(i) Whether a private company is mandatory required to appoint an internal auditor? Who may be appointed as internal auditor?
(ii) Who may be appointed as Internal Auditor? Whether practicing company secretary (PCS) can be appointed as an internal auditor?
(June 2015) (4 Marks)
9.9
a b c
Amount (` crore) Name of the Company Status of the Company Paid-up share capital Turnover Helo Ltd. Listed 49 120 Jam Ltd. Unlisted 38 500 Butter Pvt. Ltd. Subsidiary of Jam Ltd. 7 26 Advise the CFO. (June 2021) (5 Marks) Ans.:
9.10
Ans.:
As per Rule 13 of the Companies (Accounts) Rules, 2014, makes following provisions relating to internal audit:
(
a) Every Listed Company.
(
b) Every unlisted public company having:
(
c) Every Private Company having—
Keeping in view of the above provisions:
ii As per Section 138 of the Companies Act, 2013:
-
i iiiii iv
iii
i
a b c
9.11
Que. 15: Advise whether the internal auditor is required to be appointed in the following scenarios :
Can the following persons be appointed as internal auditor ?
(i) President (HR)
(ii) DGM (Finance).
(June 2021) (5 Marks)
Ans.: -
Que. 16: Perfect Pvt. Ltd. wishes to appoint its Secretary, Satish, as an internal auditor. Referring to the provisions of Companies Act, 2013 . Advice the Company.
Ans.:
(June 2018) (4 Marks)
Thus, Perfect Pvt. Ltd. can appoint Secretary, Mr. Satish as an internal auditor of the Company.
Que. 17: Ranveer, Chief Financial Officer (CFO) of the company has made the following observations with respect to the appointment of an internal auditor.
Particulars
Existing employee of the company who is a Chartered Accountant having experience of doing internal audit in past
Association of Chartered Accountants, Azad Nagar specialized in internal audits
Observations made by Ranveer
Cannot be appointed
Amount
Name of the Company Status of the Company Paid-up Capital Turnover Outstanding loans and borrowings Lala Ltd. Listed 49 195 99 Dilo Ltd. Unlisted public 23 200 56 Craft Ltd. Unlisted public 50 123 65 Wood Pvt. Ltd. Private 55 186 89
(` crore)
a b c
be
Can
appointed
9.12
B Pvt. Ltd. (a company owned and managed by Chartered Accountants engaged in the business of providing internal audit services)
Can be appointed
Examine, whether the observations are in accordance with the provisions of the Companies Act, 2013 ? (December 2022) (3 Marks)
Ans.:
SECRETARIAL AUDIT v. INTERNAL AUDIT
Que. 18: Distinguish between: ‘Internal Audit’ and ‘Secretarial Audit’. (June 2017) (4 Marks)
Ans.:
Points
Meaning
Who can be appointed?
Employee can be appointed or not?
Form
AUDIT COMMITTEE
Internal Auditor may or may not be an employee of the Company.
Form MR-3.
Que. 19: Explain the provisions of Companies Act, 2013 relating to constitution of an audit committee. What role does the audit committee play in the management of a company? (June 2015) (4 Marks)
of Distinction Secretarial Audit Internal Audit
--
-
-
With the scenarios described below, examine whether any of the following companies is required to constitute Audit Committee as per provisions of the Companies Act, 2013 ?
Name
Constitution of Audit Committee [Section 177(1)]:
As per Rule 6 of the Companies (Meetings of Board & Its Powers) Rules, 2014
Composition of Audit Committee [Section 177(2)]:
Role of an Audit Committee:
9.13 Or
capital
Turnover
Aggregate outstanding loan, debenture and deposits (` in crore) A Ltd. (Unlisted) 8 75 55 B Ltd. (Listed) 10 75 11 CA Pvt. Ltd. 8 110 11 D Ltd. (Unlisted) 10 51 5 (June 2022) (4 Marks) Ans.:
of Company Paid up
(` in crore)
(` in crore)
i ii iii
9.14
In light of provisions of Section 177 of Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014,
Que. 20: RPK Ltd. is an unlisted Company having INR 9 crore as paid-up Capital as INR 52 crore as long term loan. The directors of the company would like to know from you the answers for the following questions :
(1) Would the company be liable to constitute an audit committee?
(2) If the company is listed after a fresh issue of shares to the tune of INR 50 crore, in such a situation, would the company be liable to constitute Audit Committee?
(3) What is the quorum for meetings number of meetings to be held in a year by the audit Committee? (December 2019) (1 + 1+ 2= 4 Marks)
Ans.:
Section 177(1) of the Companies Act, 2013 read with rule 6 of the Companies (Meetings of the Board and its Powers) Rules, 2014
Number of Meetings and Quorum :
i.
In reference to above mentioned provisions of Section 177 of the Companies Act, 2013:
(Note: For answer of (iii) & (iv) above, it is assumed that RPK Limited is Listed Entity)
Que. 21: Approval of the Audit Committee to a related party transaction can be granted by passing a circular resolution. Discuss. (June 2021) (5 Marks)
Ans.: -
Thus, the approval of Audit Committee to a related party transaction can be granted by passing omnibus approval.
9.15 ii
i ii iii iv
i ii iii
9.16
FINANCIAL STATEMENT
Que. 22: Consolidation of financial statements is mandatory for all companies including unlisted companies and private companies. Comment.
(June 2017) (5 Marks)
Ans.:
RESTRICTION ON STATUTORY AUDITORS TO TAKE UP OTHER ASSIGNMENTS IN THE COMPANIES (SECTION 144)
Que. 23: A statutory auditor of a private limited company is restricted to take up any other assignment in the companies. Comment.
Ans.: As per Section 144 of the Companies Act, 2013,
(June 2017) (5 Marks)
SECTION 144 OF COMPANIES ACT, 2013
Que. 24: Answer the following with regard to appointment of auditor : (i) X, a practising chartered accountant holds shares in ABC Ltd. The nominal value of shares is ` 50,000. Whether ABC Ltd. can appoint him as auditor ?
9.17
(ii) A, a practising chartered accountant has business relationship with XYZ Hotels Ltd. The hotel used to provide services to A frequently on the same price as charged from other customers. Whether XYZ Hotels Ltd. appoint A as its auditor ?
(iii) X, a chartered accountant is working as a General Manager Accounts with ABC Ltd. Could X be appointed as auditor in ABC Ltd. ? (December 2021) (5 Marks)
Ans.: i ii iii
NOT APPLICABILITY OF ROTATION OF STATUTORY AUDITOR ON CERTAIN COMPANIES
Que. 25: Appointment and rotation of statutory auditor is mandatory for One Person Company (OPC) and Small Company. Comment. (June 2018) (4 Marks)
Ans.:
under Section 139(2) and Rule 5 which is applicable to
-
9.18
EXEMPTION FROM PREPARATION OF CONSOLIDATION OF FINANCIAL STATEMENT
Que. 26: Reels India Ltd., is a wholly owned subsidiary of Wheels India Ltd. The auditor of Wheels India Ltd. has intimated the Board of directors that the company will not be required to prepare consolidated financial statements if provisions of Section 129 of Companies Act, 2013 are complied with. As a company secretary give your comments in this regard.
(December 2019) (3 Marks)
Ans.: As per Section 129(3) and 129(4) of the Companies Act, 2013: Exemption from preparation of Consolidation of Financial Statement: -
Reels India Ltd.
PRACTICAL QUESTIONS RELATING TO ACCOUNTS, AUDIT AND AUDITORS
Que. 27: The Board of Directors of Grow More Limited; a public company, has duly delegated its power to approve the financial statement of the company for the year 2014-2015 to a committee of directors. The said committee considered the financial statement and approved the same before the financial statement were handed over to the statutory auditor of the company. Will you accept such approval of financial statement? (June 2012) (5 Marks)
Ans.:
Que. 28: An auditor of a company signed the balance sheet, profit and loss account and schedules/notes and furnished the auditor’s report on the same date on which the reports were signed by the directors on behalf of the Board. On the director raised objection stating that the audit cannot be completed and certified in a day. Do you agree with directors and if not, why? (December 2012) (5 Marks)
Ans.:
Que. 29: Director of the company along with another director were prosecuted under for their failure to file return, annual accounts and audited balance sheet required to be laid before the Annual General Meeting. The director moved the court to quash the prosecution initiated by the ROC. As a Company Secretary in Practice advice in the matter. (December 2013) (4 Marks)
Ans.:
Kishan Prasad Palaypu v. Registrar of Companies [(2008) 83 SCL 376 (AP)]. -
9.19 ,
Que. 30: Vir is a director in DJA Limited (the company). The company holds 75% shares of MRN Limited. Vir wants to inspect the books of MRN Limited. Examining the provision of the Companies Act, 2013 advice whether Vir, the director of DJA Limited can be allowed to inspect the books of MRN Limited. (June 2015) (4 Marks)
Ans.:
As per Section 128(3) of the Companies Act, 2013, -
In the given case,
Que. 31: Manohar, the auditor of Belle Limited appointed by the company in its last general meeting has resigned from the office of auditor of the company for some personal reasons.
Referring to the provisions of the Companies Act, 2013, answer the following:
(
a) Who is the competent authority to accept and approve the resignation?
(
b) State the manner in which the vacancy caused by Manohar’s resignation shall be filled in. (December 2015) (4 Marks) Or
Shyam was appointed as the statutory auditor of Ram Ltd. a Non-Government company at the Annual General Meeting held on 30th September, 2021. He has resigned after 2 months as he wanted to discontinue the practice and surrendered his Certificate of Practice and joined a Multinational Company. Explain how the new auditor will be appointed by Ram Ltd. and the conditions to be complied with in this regard. (June 2022) (3 Marks)
9.20
-
