CA Inter Audit Lec 45 & 46

BA.13

The LFAR is to be submitted before _______every year

• a) 30th April

• b) 31st May

• c) 30th June

• 30th September

BA.10

In case of Frauds involving amount less than INR 1 crores , the auditor should report to the :-

• a)  Central Government

• b) Reserve Bank of India

• c)  Bank’s Board/Audit Committee

• d) Comptroller & Audit General

BA.3

Regulating body in case of banks is:

• a) SEBI

• b)  IRDA

• c) RBI

• d) ICAI

BA.12

The auditor of a nationalised bank is to be appointed by:-

• a) The Bank concerned through its Board of Directors

• b) Shareholders in Annual General Meeting

• c) Comptroller & Auditor General of India

• Ministry of Corporate Affairs

BA.7

A Ltd. has been assigned a Cash Credit limit of INR 20 lacs as against its Book Debts furnished as security. What kind of Security creation is it?

• a) Pledge

• b) Mortgage

• c) Assignment

• d) Set-off

BA.19

You are part of an engagement team conducting statutory audit of branch of a nationalized bank. It is noticed that branch has sanctioned a cash credit limit for meeting working capital requirements to a proprietary firm. The proprietor has also mortgaged his residential house in the city by depositing title deed with branch. Keeping in view above, consider the following table: -

Column X Column Y

(1) Stocks of firm (A) Primary Security

(2) Residential house (B) Secondary security

(3) Mode of security creation for residential house (C) Registered Mortgage

(4) Debtors of firm (D) Equitable Mortgage

(5) Mode of security creation for stocks and debtors (E) Collateral security

(F) Hypothecation

Identify the most appropriate combination by matching Column X with Column Y: -

• a) 1-A, 2-B,3-D,4-A,5-C

• b) 1-A,2-E,3-D,4-A,5-F

• c) 1-A,2-B,3-C,4-B,5-D

• d) 1-A,2-E,3-D,4-B,5-D

Incs.29.2

Appointment of M/s RGL has been challenged by a shareholder in the Bank’s Annual General Meeting stating that the appointment should have been made by the shareholders in the bank’s AGM.

 

Their appointment as auditors of the bank throws some questions for the bank’s management. New Indian bank has exposure to crop loans as many branches are located in the rural area. While conducting the audit, the auditors are faced with the question of classification of non-performing advances.

 

Also, New Indian bank has lot of Credit cards issued to its clients, some of which are overdue for long.

While conducting the audit, the auditors came across various peculiarities relating to Bank Audits like classification of NPA’s, reporting etc. to name a few.

        "The matters which the banks require their auditors to deal with in the Long Form Audit Report is to be specified by

• a) Banking Regulation Act, 1949

• b) Central Government

• c) Comptroller and Auditor General of India

• d) Reserve Bank of India"

Incs.29.1

      "As per the provisions of relevant enactments, please advise who can appoint auditors of a Nationalised bank.

• a) Board of Directors of the Bank

• b) Reserve Bank of India

• c) Comptroller and Auditor General of India

• d) Central Government"

Incs.34.3

"Which of the following types of Audit Report do PK & Associates will have to issue to comply with the requirements as laid down by RBI circulars as narrated by CA Raman to the Engagement team ?

• a) Statutory Audit Report

• b) Tax Audit Report.

• c) LFAR

• d) GST Audit Report."

Incs.34.4

He tells the engagement team about various reports they would be required to issue after the conclusion of audit as the Statutory auditors such as the Statutory Report , LFAR , etc. During the course of the audit , the audit team suspects a fraud having been committed in the Bank branch involving an amount of INR 2.5 crores and they report of the same to the Bank’s Board of Directors (BOD) but receive no reply against it from them and therefore proceed further as per their legal obligation as the Statutory auditors.

         "In the given case , what should be CA Raman’s legal obligation & reporting requirement w.r.t. the fraud noticed by the team during the course of the audit ?

• a) Report the nature of amount & parties involved in the fraud in his audit report .

• b) Ask for the matter to be disclosed in the Board’s Report by the BOD..

• c) Forward the reply received from the BOD to the Central Government along with his report and his comments upon the reply received.

• d) Forward his Report with a Note to the Central Govt. stating the non-receipt of any observations from the BOD."