Description

Audit – I
April 2023 Examination

Q 1. As an Auditor of Royal Ltd what will you check to verify cash transactions: (10
Marks)
Ans 1.
Introduction
An accounting measure may be described because of the organization’s rules and policies in
reporting incomes and fees. The two main accounting methods are cash accounting (generally
used by individuals) and accrual accounting (traditionally used by firms).
In most cases, conventional accounting concepts need accrual accounting. Cash accounting
involves reporting earnings and costs as they are received and paid through cash outflows and
inflows. Accrual accounting consists of writing them as they are incurred and earned through
purchases and sales on credit scores, accounts payable, and
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Q2. Go through the following transactions and write down the audit steps you will
conduct to audit of the fixed Assets purchased by the company KATA Ltd. (10 Marks)
1. Land and Building of Rs.20,00,000/-
2. Building of Rs. 30,00,000/-
3. Goodwill worth Rs. 10,00,000/-
4. Plant and Machinery of Rs. 5,00,000/-.
5. Furniture, Fittings and Fixture of Rs. 3,00,000/-
Ans 2.
Introduction
The audit is a necessary period utilized in accounts that explains the examination and
verification of an employer’s financial records. It is to make sure that monetary statistics are
represented accurately and fairly.
Moreover, audits are accomplished using expert individuals to ensure that financial
statements are organized and consistent with applicable accounting standards. The three
number one financial statements

Q3. As an expert auditor please write down the general consideration with respect to
the below mentioned areas.

a. Wages of seasonal labourers. (5 Marks)
Ans 3a.
Introduction
If we are interested in turning into an auditor, we may additionally benefit from what their
job entails. Auditors are specialists who audit an organization or individual’s accounting
procedures and financial transactions. Legal parameters make it compulsory for organizations
to patriate in audits to avoid discrepancies

b. Salaries of employees? (5 Marks)
Ans 3b.
Introduction
The auditor needs to confirm the salary check-in and compare it with the transactions within
the cash book.
He needs to look into the monthly general bills book and trust the payment cheque drawn.
There may be some changes in payments, which can be because of an increase in dearness