CA Inter Must To Topics and Questions

CA Inter Must To Topics and Questions ●​ C7

These are some important topics not to be missed. Also, this is ○​ SA 560
not a substitute for complete overall study. These will cover 70 ●​ C9 - 8 to 10 marks
to 80% marks ○​ Cooperative Society - Detail
○​ LLP - Detail
Top Priority ○​ Other entities - Refer revision videos only
●​ C1, 11, 2, 6 (All topics) - 30 to 32 Marks ■​ Hotels
○​ Easy ■​ Cinema Halls
○​ Direct ■​ Clubs
○​ High Scoring ■​ Partnership Firm

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●​ C4 - 12 to 15 marks ■​ Lease
○​ High Weightage Topics Covering 9 to 12 marks ■​ Hospital

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■​ SA 500, SA 501, SA 505, SA 610, Audit Trail ■​ Remaining entities
●​ C3 - 12 to 15 marks ○​ Government Audit - Refer Revision Videos only ​
○​ High Weightage Topics Covering 7 to 9 marks
■​ Cover SA 320 Fully Chapter 5 - 18 to 19 marks

1.
■​ 315, 330, Internal Control, Audit Risk - Cover ●​ Good conceptual understanding of Assertions is required
●​ Special Focus on Topics
all easy and direct questions. That’s it.
○​ Audit of Share Capital
■​ Now we are at 46 to 53 Marks
■​ Application of Securities Premium Account
Chapter 8 - 10 to 12 Marks
●​
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○​ CARO 2020 (3 to 4 marks)
○​ SA 299
■​ Share Issue at Discount
■​ Sweat Equity Shares
■​ Reduction of Capital
○​ 700 (Revision Videos),705,701 ○​ Audit of Borrowings, Trade Receivables, Cash and cash
○​ 706, 710 - Refer Revision Videos Only equivalents, Inventories, Tangible Fixed Assets, Trade
ed
○​ Reporting Requirements under the Companies Act, Payables, Provisions & Contingent Liabilities, Sale, Other
2013 Income, Depreciation, Other Expenses
○​ 54 to 63 Marks ○​ Benami Property
●​ C7 - 10 to 12 Marks ○​ Struck off company
○​ Crypto
○​ SA 570, SA 580, SA 260, SA 265, SA 450
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○​ CSR
○​ 61 to 72 marks
○​ Ratio Disclosure requirements
●​ C10 - Complete Chapter 8 to 10 marks (Revision Video
●​ Special Focus on Latest RTP and MTP
●​ Important questions list provided below.
Plus Question Bank)

○​ Special Focus on Advances - All Topics, Drawing

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power Check out this video on how to study chapter 5-

○​ Special focus on Case Study Based MCQs https://www.youtube.com/live/XWUP4p-t2UQ?si=015fGinMJq8iRA3
○​ Now we are at 69 to 82 marks approx m
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Second Priority
Priority of Descriptive Questions – Sources to Cover

●​ C3 1
st
Priority

○​ Cover Automated Environment from Revision Video ICAI Study Material, Suggested Answers (Last 3 attempts)
●​ C4 Recent RTP, MTP1 and MTP2 (of last 3 attempts)
○​ SA 520 - Selective question based 2nd Priority

Extra Questions from the Question Bank

○​ SA 530 - Selective and question based.
○​ SA 550 - Complete - Refer Revision Video only
MCQs and Case Studies

○​ SA 510 - Complete - Refer Revision Video only ●​ Start from our booklet

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 CA Inter Must To Topics and Questions

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Mock Test Papers

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Neeraj Arora | www.edu91.org ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CA Inter Must To Topics and Questions

 CA Inter Must To Topics and Questions

Important Questions of Chapter 5 Audit of Trade Receivables

Audit of Share capital 7.​ It is important to carry out the Tests of Controls for checking
1.​ ABC Ltd. has issued shares for cash at a premium. Section 52 of effectiveness of internal control over sales as a part of the
the Companies Act, 2013 provides that a Company shall debtors’ audit procedure. In above context, state the points
transfer the amount received by it as securities premium to which need to be considered in respect of trade receivables
securities premium account. Advise the means in which the 8.​ While auditing books of accounts of SOLAR Ltd., you observed
amount in the account can be applied. that an amount due from a debtor for invoice issued on
2.​ Management of D Ltd. has issued shares at a discount to its 31.03.2024 has not been recognized in the books of accounts. As
creditors. Explain the provisions of the Companies Act, 2013 an auditor, you want to ensure that all trade receivable balances
when shares are issued at a discount to creditors ? As an auditor that are supposed to be recorded have been recognized in the
what will be your concern of checking in such a case ?

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financial statements. How will you achieve the stated objective?
3.​ What audit points are to be borne in mind in case of issue of 9.​ CA J is appointed as statutory auditor of Sigma and Beta
“Sweat Equity Shares” by a limited company? Limited for the year 2023-24. During the audit he observed

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4.​ BNP Ltd has reduced its Share Capital to a greater extent in the trade receivables amounting to ₹ 50 crores are reflected in the
year for which you are conducting the audit. State how will you financial statements of the company. He wants to obtain
proceed for verifying the reduction of Capital. sufficient appropriate evidence to conclude that trade
receivables have been valued appropriately. Suggest a few audit

1.
Audit of Borrowings
procedures in this regard.
5.​ The financial statements of XYZ Limited show long-term
borrowings from the banks, financial institutions, leasing, and Audit of Cash and cash equivalents

hire purchase companies. Additionally, the company has issued

u9 10.​ While verifying cash and cash equivalents of a company, CA D
debentures to its 1000 members to raise funds in accordance engagement partner, is very particular that Bank reconciliation
with the provisions of the Companies Act, 2013. The money statement (BRS) prepared by the management in respect of
raised by issuing debentures is also reflected in long-term bank account maintained by the company is proper to rule out
borrowings. As the statutory auditor of XYZ Limited, CA X misstatements in cash and cash equivalents reflected in the
wants to verify that all borrowings on the balance sheet financial statements of the company. The company does not use
represent valid claims by banks or other third parties. Suggest
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net banking and prefers to issue cheques to its creditors and
a few audit procedures in this regard. receives substantial payments locally through account payee
6.​ Droma Shoes Private Limited was established in year 2022-23 cheques. Which aspects need to be taken care of and verified by
for manufacturing of footwear. As funds were needed to carry CA D in respect of BRS?
on its business activities - including for purchase of different
raw materials, incurring of regular expenses like power and
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Audit of Inventories

fuel and payment of wages etc., it had got sanctioned a credit 11.​ As the statutory auditor of Ginni Ltd., you need to verify if the
facility amounting to ₹ 2 crores repayable on demand from a company has valid legal ownership rights over the inventories
bank against primary security of its current assets and recorded in the balance sheet as on March 31, 2024. What audit
collateral security of residential house of one of its directors. procedures should you perform to verify the company’s
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Duly signed guarantee documents by directors in favour of bank ownership of the inventories, including items stored at
also form part of bank’s loan documentation. Account third-party locations?
statement of above facility downloaded from bank’s website 12.​ During the audit of HST Ltd., CA Mukund, the auditor, observed a
shows debit balance of ₹ 1.85 crores as on 31st March, 2023. significant volume of unsold electronic parts as inventory that
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The operations in above credit facility are satisfactory. In this had remained stagnant for more than two years. He noted that
regard: - the company was facing difficulty selling these items due to the
(i) Identify the nomenclature of such credit facility given by changes in the market. Additionally, some parts were damaged,
banks. How would above amount of ₹ 1.85 crores be reflected and and others were discontinued models. CA Mukund also ensured
classified in financial statements of company as on 31.3.23? that the inventory was accurately valued to ensure proper
(ii) Also state specific disclosure requirements of Schedule III of financial reporting. You are required to outline the detailed
Companies Act, 2013 in relation to above audit procedures that are generally undertaken when auditing
such inventories which at the time of observance of physical
counting were noted as being damaged or obsolete

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 CA Inter Must To Topics and Questions

13.​ Zed Limited is engaged in the manufacturing and export of income: Interest income from fixed deposit, Dividend income
shoes. The statutory auditor of the company wants to and Gain/(loss) on sale of investment in mutual funds.
reasonably ensure that only the inventories recorded in the
financial statements are exclusively owned by the company and Audit of Depreciation and Amortisation

do not include any inventories that belong to third parties but 21.​ Depreciation and amortisation expense generally constitute an
includes inventories owned by the company but lying with third entity's significant part of overall expenses and have direct
party. Advise the auditor on the audit procedures to be impact on the profit/loss of the entity. What are the attributes,
performed to achieve this assurance. the Auditor needs to consider while verifying Depreciation and
amortisation expense.
Audit of PPE

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14.​ Mr. Vaayu is appointed as the auditor of PRISM Limited for the Audit of Other Expenses

year 2023-24. He wants to ensure that the PPE has been valued 22.​ M/s SS & Associates have been appointed as statutory auditors
appropriately and as per generally accepted accounting policies of Green Limited, a company engaged in the business of

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and practices and also that PRISM Limited has valid legal manufacturing of hardware products. They are analyzing the
ownership rights over the PPE claimed to be held by the monthly trends for other expenses like rent, power and fuel,
company and recorded in the financial statements. Explain how repairs, etc. and are also verifying attributes of such types of
the auditor will verify the same. expenses. List down the attributes for verifying such expenses.

1.
Audit of Provisions and Contingent Liabilities Disclosure Requirements

15.​ CA Q, the auditor of XYZ Ltd, while conducting audit observes 23.​ Proceedings have been initiated against False Limited for
that the company has made various provisions in the books of
u9 holding benami property under the Benami Transactions
account. What are the audit procedures that CA Q will follow to (Prohibition) Act, 1988 (45 of 1988) and the rules made
verify the existence, completeness, and valuation of the thereunder, but such property is not recorded in books of
provisions made ? accounts. As a consultant to the company, what will you advice
to the company as far as disclosure requirements are
Audit of Sale of Products and Services concerned in relation to said proceedings?
16.​ You are part of engagement team conducting audit of an entity 24.​ B Ltd. is covered u/s 135 of the Companies Act, 2013 i.e.
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engaged in manufacturing business. State few audit procedures Corporate Social Responsibility (CSR). What matters (other
you would undertake to perform to verify that recorded sales in than the amount spent, amount not spent, amount required to
financial statements represent goods actually sold during the be spent etc.) shall be disclosed by the company with regard to
period and recorded sales are not overstated. CSR activities done by the company?
17.​ While checking sales of the client, the auditor has to ensure 25.​ Mercury Ltd. is a company engaged in the manufacture of floor
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that all sales are accurately measured as per applicable mats. The company sells its goods on credit. The debtors
accounting standards and correctly journalized, summarized, balance as on 31.03.2024 amounted to ₹ 20 cr. What is the
and posted. Explain the audit procedures to ensure the same. disclosure requirement as per Schedule III to the Companies
18.​ Discuss the audit procedures generally required to be Act 2013, with respect to the ageing schedule of debtors of the
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undertaken by the auditor while auditing Goods sent out on Sale company?
or Return Basis. 26.​ What are the required disclosures for cash & Cash equivalents
to be made by the company as per Schedule III (Part I) to
Companies Act, 2013?
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Audit of Other Income

19.​ ABC limited appointed XYZ & Company, Chartered Accountants, 27.​ Following is an extract of notes to accounts of financial
as a Statutory Auditor of the Company for the year 2023-24. statements of STU Private Limited listing some ratios. Discuss,
CA X, partner of XYZ & Company, was looking after the audit whether disclosure, given in following manner meets
of other income of the company which consists of interest requirements of Schedule III of the Companies Act, 2013.
income on fixed deposits. As a Statutory Auditor how would CA X Ignore other ratios which are not listed in extract given below:
verify interest income on fixed deposits for the year 2023-24?
20.​ As a Statutory Auditor of the company list out audit procedure Name of ratio 31.3.2024 31.3.2023

required to be undertaken for the recognition of following other

Current ratio 2.50 2.30

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 CA Inter Must To Topics and Questions

Inventory turnover ratio 3.00 6.00

Trade receivables turnover ratio 1.75 5.00
Net profit ratio (in%) 13% 10%

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Neeraj Arora | www.edu91.org ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CA Inter Must To Topics and Questions