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ECO – 12 STUDY PLAN

BACHELOR'S DEGREE PROGRAMME

Term-End Examination 2017

ELECTIVE COURSE: COMMERCE

ECO-12: ELEMENTS OF AUDITING

Time: 2 hours

Maximum Marks: 50 (Weightage 70%)

Note: Attempt any five questions. All questions carry equal marks.

As you have to attempt only 5 questions, it is not necessary to complete each and every block. Some must study section are suggested. So plan you study accordingly. Don’t forget to study current year’s assignment.

Block – 1 (Part A: One Question expected from this Section – 10 Marks) – Must Study

1. Define the term “Auditing”. What are its primary and secondary objectives?

2. Explain the various qualities of a good auditor.

3. List out various types of audit (Two lines about each). Mention six advantages of audit.

4. What is continuous audit? Mention its advantages and limitations.

5. Mention 5 differences between:

a)      Accountancy and Auditing

b)      Auditing and Investigation

c)       Continuous and periodical audit

Block – 1 (Part B: One Question expected from this Section – 10 Marks)


1. What is Internal Control? Mention its objectives. What the essentials of a good internal control system?

2. What is internal audit? Mentions its four objectives. Distinguish between Internal audit and Statutory audit.

3. What is internal check? What are its Objectives? What are the essentials of a good internal check system?

4. Explain the internal check system as regard to cash purchases and cash sales. (Similar points can be used for all cash receipts and cash payments)

5. What points should be considered before commencing audit?

5. Write short notes on:                                Very Very Important

a)      Routine checking

b)      Audit note book

c)       Audit working papers

d)      Test checking

e)      Audit programme

Block 2 – Vouching, verification and Valuation

Vouching  - One Question expected from this section

1. What is Vouching? What are its objectives? Explain the importance of vouching.

2. What is voucher? Mention its various types. What points should be taken into consideration before vouching?

3. How would you vouch Cash sales and cash received from debtors? (Same points can be used for any cash receipts)

4. How would you vouch cash purchases and cash paid to creditors? (Same points can be used for any cash payments)

Verification and valuation of assets and liabilities – (1-2 Questions expected from this section)

1. What is goodwill? State the various methods of valuation of goodwill, and explain one of these with an example.

2. What is verification and valuation of assets? State the auditor’s duties is respect to valuation of assets.

3. How would you verify and value the following?                            (5 Points only)

a)      Freehold property

b)      Leasehold property

c)       Patents

d)      Trade marks and copy rights

e)      Contingent liabilities

f)       Cash and bank balance

g)      Stock in hand

h)      investments

Block 3 (Part A: One Question from this section is coming every year, Expected similar trend – 10 Marks) – Must Study

1. Mention the qualification and disqualification for appointment as an auditor.

2. Explain how a company auditor is appointed and Removed?

3. Explain the rights and duties of a company auditor.

4. Write a brief note on the status of an auditor.

5. Explain the preliminaries before commencement of the audit of a company.

Block 3 (Part B: One Question from this section is coming every year, Expected similar trend)

1. What is divisible profit? Can dividend be declared out of past capital and revenue profits? Comment.

2. Distinguish between Partnership audit and Company audit.

3. Mention the auditor’s duties in respect of the following: (Study 5 points only)

a)      Issue of shares at par

b)      Issue of shares at a premium

c)       Issue of shares at a discount

d)      Issue of Bonus shares

e)      Issue  and Redemption of preference shares

f)       Forfeiture and re-issue of forfeited shares

g)      Unclaimed dividend

Block 4 (Most Important Block: 15 to 20 marks question can be expected from this block) – Must Study

1. Define Auditors’ Report. Explain in brief the requisites of good auditor's report.

2. What are various types of Audit reports (Clean and Qualified Mainly)? Discuss the forms and contents of audit report.

3. What is Qualified report? Under what circumstances a auditor can qualify his report? Give a specimen of such report.

4. What is Cost audit? Mention its objectives, Importance and Limitations (5 Points are sufficient).

5. What is Management audit? Mention its objectives, Importance and Limitations (5 Points are sufficient).

6. Distinguish between:                                (5 Points are sufficient)

a)      Audit report and Audit certificate

b)      Cost audit and Management audit

c)       Cost Audit and Financial Audit

7. Short Notes:

a)      Financial Audit

b)      Propriety Audit

c)       Efficiency Audit


d)      Management Audit Report

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