University of Mumbai 2006 B.A Economics Auditing & Costing - Question Paper

Auditing & Costing
April 2006
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 should be part of ans.
ans both the parts in the identical answer-book.
part I-(Auditing)
Q.1 (a) What do you mean by Vouching? 10
How would you vouch the followings?

(i)Cash Sales
(ii)Travelling Expenses
(b) Distinguish ranging from Auditing and Investigation. eight
Q.2 (a) What is test checking? explain its advantages and disadvantages. eight
(b) elaborate the objectives of verification? eight
Q.3 (a) discuss the terms "Internal Control","Internal Check" and "Internal Audit". eight
(b) elaborate the rights of a Company Auditor? eight
Q.4 (a) explain the procedure for Removal of a Company Auditor. eight
(b) Scrutinise and comment on the subsequent Ledger Accounts. In the Books of ADD Ltd. eight
Plant and Machinery A/c.

Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
01-01-2005 To Balance b/fd. 12,50,000 31-03-2005 By Sale of Machinery A/c. 3,00,000
01-06-2005 To Bank A/c. 6,50,000 31-10-2005 By Asset Discarded A/c. 1,50,000
01-07-2005 To Bank A/c. 50,000 31-12-2005 By Balance c/fd. 15,00,000
(Installation)
19,50,000 19,50,000

Provision for Depreciation on Plant and Machinery A/c.

Dr. Cr.
Date Particulars Rs. Date Particulars Rs.
31-03-2005 To sale of Machinery A/c 2,40,000 01-01-2005 By Balance b/fd. 6,30,000
31-10-2005 To Asset Discarded A/c 1,45,000 31-12-2005 By P & L A/c. 1,22,500
31-12-2005 To Balance c/fd. 3, six 7, 500
7,52,500 7,52,500


Q.5 Write short notes on any 4 of the followings:- 16
(a) Errors of Principle

(b) Auditing in Computer Environment.

(c) Appointment of an Auditor in Casual Vacancy.

(d) Audit in Depth.

(e) Qualified Audit Report.

(f) Concept of actual and Fair View.
part II — (Cost Accounting)
Q.6 20
Details Process A Process B Process C
Rs. Rs. Rs.
Indirect Material 1,00,000 18,750 16,550
Direct Wages 56,250 35,000 44,900
Direct Expenses 51,250 6,875 11,500
Value of Opening Stock per Unit 25 31 40
Scrap Value per Unit 13.50 11.25 21.00
Units Units Units
Output 9,750 9,625 8,000
Stock of Process Output:
01-01-2005 1,500 1,375 2,000
31-12-2005 1,250 2,000 1,000
Percentage of Wastage two five 10

10,000 units of Direct Material were introduced in Process A at the rate of Rs. five per unit. The percentage of wastage is calculated on the number of units entering the process concerned. From the above info of `DE' Enterprises prepare :(1) Process Accounts,

Earning:   Approval pending.