University of Mumbai 2006 B.A Economics Auditing

Auditing & Costing
March 2007
Time: three HoursMarks: 100
NB:
ques. Nos. one and six are compulsory and ans any 2 from the remaining fromeach part.
Figures to the right indicate full marks.
Working notes should form part of ans.
ans both the parts in the identical answer-book.
part I-(Auditing)
Q.1 (a) Distinguish ranging from Verification and Vouching. 10
(b) How would you vouch the followings ? eight

(i)) Advertisement Expenses.
(ii)Cash Sales.
Q.2 (a) define 4 cases in which an Auditor must qualify his Audit Report. eight
(b) discuss the disclosure requirements of Schedule VI of the Companies Act, 1956, relating to contingentliabilities eight
Q.3 (a) discuss various techniques of an audit. eight
(b) explain the procedure for removal of a company auditor. eight
Q.4 (a) elaborate the qualifications and disqualifications of a company auditor? eight
(b) Scrutinise and comment on the subsequent ledger accounts: eight
(i) In the books of Bhumika Computers Ltd.

Dr. Salaries Account Cr.
Date
2006 Particulars Amount
Rs. Date
2006 Particulars Amount
Rs.
April, 10 To Bank (March) 10,000 Sept. 30 By Profit and Loss A/c 60,000
May, eight To Bank (April) 10,000
June, 10 To Bank (May) 10,000
July, 10 To Bank (June) 10,000
Aug, 10 To Bank (July) 10,000
Sept, 10 To Bank (Aug.) 10,000
Total 60,000 Total 60,000

(ii)In the books of M/s. Paresh & Sons Ltd.

Dr. Interest on Investment Account Cr.
Date
2006-07 Particulars Amount
Rs. Date
2006-07 Particulars Amount
Rs.
April,1 To Interest Accrued June, 30 By Bank 2,400
on Investment 1,200 Sept., 30 By Bank 1,600
March 31 To P & L A/c 6,600 Dec., 31 By Bank 2,400
March, 31 By Interest Accrued
on Investment 1,400
Total 7,800 Total 7,800

Q.5 Write short notes on any 4 of the followings:- 20
(a) Secret Reserves.
(b) Casual vacancy in the office of the auditor.

(c) Teeming and Lading.

(d) Impact of EDP on Auditing.
(e) Internal check.
(f) Importance of Internal Audit.
part II — (Costing).
Q.6 Mr. Raj Contractors and Builders have found a contract for constructing a Housing Complex. The contract work commenced on first July, 2003 and was completed on 31st January, 2006. The year ending of the company is 31st March. The contract price was Rs. 800 lacs. 20
The Contractee agrees to pay 90% of the value of the work done as certified by the Architect immediately. A machine costing Rs. 60,00,000 was specially bought and used for the contract. The residual value of the machine as on 31st January, 2006 was Rs. 29,00,000. Depreciation is to be effected on a straight line basis.

Earning:   Approval pending.