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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(a) Raman & Suman, Chartered Accountants, are the statutory auditors of Santosh Bank Ltd. The bank uses a centralized core banking system (CBS) for processing all transactions such as deposits, withdrawals, interest calculations, and loan repayments. The auditors identify a risk of material misstatement relatin...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(i) Explain under what circumstances should an auditor design and perform tests of controls to obtain sufficient appropriate audit evidence about the operating effectiveness of relevant controls? (ii) Discuss the type and level of audit evidence required to support the auditor’s conclusion. Also explain the level...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(b) An established audit firm, 'ABC & Co.’, is preparing to commence the statutory audit for its long-standing client, Nitin Handlooms Private Ltd. The engagement partner, CA A is overseeing the planning process. Before finalizing the overall audit strategy, he is focusing on the preliminary engagement activities. ...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(i) Identify the three main preliminary engagement activities that CA A and his team must perform as part of the planning process. (ii) Regarding the continuance of the client relationship, list three matters the firm should consider continuing the engagement with the company. (5 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(c) Sameer & Co., Chartered Accountants, are conducting the audit of ABC Ltd. for the year ended 31st March, 2025. While testing accounts payable, the audit team decided to examine the recorded balances appearing in the books to verify the existence and valuation of liabilities. However, the engagement partner poi...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(i) Explain with reference to above, concept of relevance of audit evidence. (ii) State why the auditor should consider both the relevance and reliability of audit evidence while forming his opinion on the financial statements. (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(a) WXY Ltd. is a trading company that maintains a large quantity of inventory in its warehouse. During the year, some inventory items belonging to the company were stored with a third-party transporter due to space constraints. At the same time, the warehouse also contained goods received on consignment basis fro...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(b) During the audit of SITU Bank Ltd, the auditor reviews the loan portfolio and comes across the account of M/s Neem Tree Infrastructure Ltd., which has an outstanding balance of ` 10 crore. The latest valuation report by an RBI approved valuer indicates that the realisable value of the security available against...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(c) An audit firm SPR &Co. is preparing the detailed audit plan for a new client, Rajeshwari Ltd. The overall audit strategy has already been established. The engagement partner emphasises that the plan must be sufficiently detailed to guide the entire engagement team and ensure compliance with Standards on Auditi...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(a) During audit of Kavita Ltd., the auditor performs various audit procedures such as inspection, observation, confirmation, recalculation, reperformance, and analytical procedures. Some information obtained supports management’s assertions, while other information appears to contradict them. The auditor also con...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(b) During statutory audit of Orient Chemicals Ltd., the auditor, CA Raj, obtained an understanding of the company’s internal control system as part of identifying and assessing risks of material misstatement. During the audit, the auditor observed the following: i. The same employee was responsible for record...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(i) The auditor’s objective in respect of such deficiencies. (ii) Auditor's responsibilities regarding communicating deficiencies in internal control to those charged with governance and management. (5 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(c) ABC Ltd. is a government company whose statutory audit is being carried out by auditors appointed on the advice of the Comptroller and Auditor General of India (C&AG). During the audit, the C&AG considered it necessary to conduct a test audit of the company’s accounts. He issued specific directions to the sta...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(a) Wonder Homes Pvt. Ltd. owns a commercial building divided into several apartments that are rented out. During the course of audit, the auditor decides to apply substantive analytical procedures to verify the rental income instead of performing detailed checking of individual rent agreements. The auditor predic...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(i) Explain how the auditor’s approach in the above case represents the use of substantive analytical procedures. (ii) State the circumstances where substantive analytical procedures are more applicable. Also, discuss how analytical procedures can provide persuasive audit evidence in such cases. (5 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(b) As per SQC 1 - “The firm’s system of quality control should include policies and procedures addressing each element.” In this context, describe the essential elements that a firm’s system of quality control should include and explain the importance of communicating these quality control policies and procedures...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(c) Describe the essential contents of the “Basis for Opinion” section in an auditor’s report and explain why this section is important as per the requirements of SA 700 (Revised). (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(a) Sun and Moon Credit Co-operative Society Ltd., a large scale cooperative organisation operates in Maharashtra and engages in providing small loans to its members. During the audit, the auditor observed that the society maintains a Cash Book and Ledger but has not maintained separate registers for loan disburse...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(b) During audit of PQR Ltd., the auditor observed that the company had incurred several types of expenditure in relation to its new manufacturing plant. These included costs for site preparation, installation of equipment, testing of machinery before use, and professional fees paid to engineers. The company had a...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(c) Explain the circumstances under which a professional accountant may depart from specific procedures prescribed in the Standards and describe the documentation and reporting obligations arising from such departures. (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(a) During an audit, the auditor becomes aware that management has imposed a limitation on the scope of the audit after the engagement was accepted. Explain the steps the auditor should take and possible implications on the auditor’s report if sufficient appropriate audit evidence cannot be obtained as per the requ...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(b) Hansa Airways has purchased a new aircraft for its fleet. The aircraft has an airframe and engines, both of which have significant cost in relation to total cost of the aircraft. During audit of the company’s financial statements, the auditor noticed that the company applied a single depreciation rate to the t...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_1_Questions.pdf
Audit
MTP
January_2026
(c) XYZ Ltd. finalized its financial statements for the year ended 31st March 2025. Audit is in progress and the auditor is expected to issue the report in July, 2025. On 10th April 2025, a major debtor of the company was declared insolvent and the company realised that the amount due from this debtor as on 31st M...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) Audit risk means the risk that the auditor gives an inappropriate audit opinion when the financial statements are materially misstated. Audit risk is a function of the risks of material misstatement and detection risk. Audit risk is a technical term related to the process of auditing; it does not refer to t...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) The identity of the entity’s related parties, including changes from the prior period. (ii) The nature of the relationships between the entity and these related parties; and (iii) Whether the entity entered into any transactions with these related parties during the period and, if so, the type and purpose ...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) Identify, account for, and disclose related party relationships and transactions in accordance with the applicable financial reporting framework; (ii) Authorise and approve significant transactions and arrangements with related parties; and (iii) Authorise and approve significant transactions and arrangemen...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(c) It is important for auditor to identify scope of the engagement. Only a well identified scope can lead to establishment of a sound audit strategy. There are many characteristics of engagement defining its scope. Some of characteristics are as under: -  Applicable financial reporting framework applicable to ...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(a) Audit procedures - To establish the existence of trade payables and other current liabilities as at the period- end
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) Check whether there are controls in place to ensure that any purchase/ expense invoice does not get recorded more than once and payable balances are automatically recorded in the general ledger at the time of recording of expense. (ii) Obtain accounts payable ageing report and trace its balances to the gener...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(v) Review a trend line of purchases/ expenses and accounts payable, or a comparison of the two over time, to see if there are any unusual trends. Make inquiries about reasons for changes in trends from the management. Verification of liabilities is as important as that of assets because omission, understatement...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(b) Engagement Team Discussions: All personnel performing an engagement, including any experts contracted by the firm in connection with that engagement are known to be the “Engagement Team”. The engagement team should hold discussions to gain better understanding of the bank and its environment, including inter...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) Errors that may be more likely to occur; (ii) Errors which have been identified in prior years; (iii) Method by which fraud might be perpetrated by bank personnel or others within particular account balances and/or disclosures; (iv) Audit responses to Engagement Risk, Pervasive Risks, and Specific Risks;
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(v) Need to maintain professional skepticism throughout the audit engagement; (vi) Need to alert for information or other conditions that indicates that a material misstatement may have occurred (e.g., the bank’s application of accounting policies in the given facts and circumstances). Advantages of such a discu...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) Specific emphasis should be provided to the susceptibility of the bank’s financial statements to material misstatement due to fraud, that enables the engagement team to consider an appropriate response to fraud risks, including those related to engagement risk, pervasive risks, and specific risks. (ii) It f...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) the overall audit strategy (ii) the audit plan and (iii) any significant changes made during the audit engagement to the overall audit strategy or the audit plan, and the reasons for such changes. The documentation of the overall audit strategy is a record of the key decisions considered necessary to pro...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(a) Inspection involves examining records or documents, whether internal or external, in paper form, electronic form, or other media, or a physical examination of an asset. Inspection of records and documents provides audit evidence of varying degrees of reliability, depending on their nature and source and, in th...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(b) Going concern is one of the fundamental accounting assumptions. The enterprise is normally viewed as a going concern, that is, as continuing in operation for the foreseeable future. It is assumed that the enterprise has neither the intention nor the necessity of liquidation or of curtailing materially the scale...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(c) Audit of Receipts: The audit of receipts is neither all pervasive nor as old as audit of expenditure but has come to stay in some countries. Such an audit provides for checking;
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) whether all revenues or other debts due to government have been correctly assessed, realised and credited to government account by the designated authorities; (ii) whether adequate regulations and procedures have been framed by the department/agency concerned to secure an effective check on assessment, collec...
[ -0.004192273132503033, -0.018532946705818176, 0.01824229396879673, -0.0017293259734287858, -0.057126399129629135, -0.04425092786550522, 0.008459326811134815, 0.0009933928959071636, -0.031353045254945755, 0.08301897346973419, 0.0171305313706398, 0.006141934543848038, 0.01234851498156786, -0...
Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(v) review of systems and procedures to see that the internal procedures adequately secure correct and regular accounting of demands collection and refunds and pursuant of dues up to final settlement and to suggest improvement. The basic principle of audit of receipts is that it is more important to look at the gen...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(a) The nature and extent of audit procedures necessary to obtain sufficient appropriate audit evidence regarding opening balances depend on such matters as: • The accounting policies followed by the entity. • The nature of the account balances, classes of transactions and disclosures and the risks of material m...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(b) As per SA 210 “Agreeing the Terms of Audit Engagements”, in order to establish whether the preconditions for an audit are present, the auditor of Wing Ltd, CA G shall: (1) Determine whether the financial reporting framework is acceptable; and (2) Obtain the agreement of management that it acknowledges and u...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) For the preparation of the financial statements in accordance with the applicable financial reporting framework; (ii) For the internal control as management considers necessary; and (iii) To provide the auditor with: • Access to all information such as records, documentation and other matters; • Additional...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(c) Standard on Auditing (SA) 705 “Modifications to the Opinion in the Independent Auditor’s Report” deals with the auditor’s responsibility to issue an appropriate report in circumstances when, in forming an opinion in accordance with SA 700 (Revised) “Forming an Opinion and Reporting on Financial Statements”, the ...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) The auditor concludes, based on the audit evidence obtained, that the financial statements as a whole are not free from material misstatement; or (ii) The auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements as a whole are free from material misstatement.
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(a) The auditor cannot obtain absolute assurance that financial statements are free from material misstatement because the process of audit suffers from certain inbuilt or inherent limitations. Preparation of financial statements involves making many judgments by management. These judgments may involve subjective ...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) Obtain a listing of fixed deposits opened during the period under audit along with the applicable interest rate and the number of days for which the deposit was outstanding during the period. (ii) Verify the arithmetical accuracy of the interest calculation made by the entity by recomputing i.e. multiplying t...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(v) Also, obtain a copy of Form 26AS (TDS withholding by the bank/ financial institution) and reconcile the interest reflected therein with the calculation shared by client.
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) Check names entered in the Students Fee Register for each month or term, with the respective Class Registers, showing names of students on rolls and test amount of fees charged; and verify that there operates a system of internal check which ensures that demands against the students are properly raised. (ii) ...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(v) See that free studentship and concessions have been granted by a person authorised to do so, having regard to the Rules prepared by the Managing Committee. (vi) Confirm that fines for late payment or absence, etc. have been either collected or remitted under proper authority. (vii) Confirm that hostel dues wer...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(a) Some examples of circumstances where the auditor may consider it necessary to include an Emphasis of Matter paragraph. • An uncertainty relating to the future outcome of exceptional litigation or regulatory action. • A significant subsequent event that occurs between the date of the financial statements and...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(b) For additions during the period under audit, obtain a listing of all additions from the management and undertake the following procedures:
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) For all material additions, verify whether such expenditure meets the criterion for recognition of an intangible asset as per AS 26. (ii) Ensure that no intangible asset arising from research (or from the research phase of an internal project) should be recognised. Expenditure on research (or on the research...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(c) The auditor has no obligation to perform any audit procedures regarding the financial statements after the date of the auditor’s report. However, when, after the date of the auditor’s report but before the date the financial statements are issued, a fact becomes known to the auditor that, had it been known to ...
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(i) Discuss the matter with management and, where appropriate, those charged with governance. (ii) Determine whether the financial statements need amendment and, if so, (iii) Inquire how management intends to address the matter in the financial statements. OR
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Inter_P5_Audit_Auditing_and_Ethics_January_2026_MTP_Series_2_Question.pdf
Audit
MTP
January_2026
(c) Professional skepticism refers to an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence. In this situation, several observations such as contradictory sales invoices, altered document...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(a) DOX Limited, a service provider company engaged in providing courier services pan-India as well as internationally, has appointed an internal auditor, Mr. G, in accordance with requirements of the Companies Act, 2013 during financial year 2023-24. The company’s annual turnover during year 2022-23 and 2023-24 ha...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(b) Up and High Private Limited has started its export business during the year 2023-24. The company was catering to domestic market only in past years. CA H, statutory auditor of the company, is of the view that the company has understated its revenue by ` 50.00 lacs in the year 2023-24 by not complying with requ...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(i) Discuss responsibilities of statutory auditor to communicate with management in the above situation in accordance with SA 450. Also explain the usefulness of such communication. (ii) If management refuses to correct misstatement as communicated by the statutory auditor, how should he proceed? (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(c) Prudent Enterprises Private Limited has incurred and fully spent for the first time Corporate Social Responsibility (CSR) expenditure amounting to ` 14.50 lacs in pursuance to provisions of section 135 of Companies Act, 2013. The expenditure was spent for women empowerment programmes through an implementing ag...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(d) CA Tripad (engagement partner) based at New Delhi is external auditor of Lap of Nature, a firm, since last three years. The firm is engaged in business of providing tourism services including holiday packages to its club members. It has also provided auditor including his team members free holiday for a week e...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(a) Mention any four financial events or conditions that, individually or collectively, may cast significant doubt on the entity’s ability to continue as going concern. (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(c) The auditor carries out his work by obtaining audit evidence through performance of audit procedures. However, there are practical and legal limitations on ability of auditor to obtain audit evidence. Give one example each for such practical and legal limitations. (3 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(d) Goods and Services Tax Network (GSTN) is a not for profit, limited by shares, company. Its 50% shareholding is with Union Government and 50% with different State Governments. The company provides IT infrastructure and services to various stakeholders including governments and tax payers. The company is i...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(a) Suniti, a CA student, is part of an engagement team conducting audit of a company TIM Private Limited. According to audit programme, she is responsible for verifying purchases and PPE items appearing in books of accounts from records/bills of company. Besides, she has also been entrusted responsibility to...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(i) One purchase bill amounting to ` 5.00 lacs pertaining to TIM Industries has been entered in books of TIM Private Limited. (ii) The management has refused to provide a written representation relating to physical verification of inventories during the year. She has brought it to knowledge of engagement partner ...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(b) CA B is statutory auditor of Boom Payments Bank for year 2023-24. During the year, banking regulator has imposed restrictions on Bank from accepting new deposits due to non-compliance in conducting KYC in large number of accounts and violation of rules aimed at preventing money laundering. There is material un...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(c) Auditor shall develop an audit plan that includes description of audit procedures. Specify requirements in this regard. (3 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(d) What is meant by audit documentation? What are objectives of an independent auditor in accordance with SA 230? (3 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(a) You are part of engagement team conducting audit of an entity engaged in manufacturing business. State few audit procedures you would undertake to perform to verify that recorded sales in financial statements represent goods actually sold during the period and recorded sales are not overstated. (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(b) While performing statutory audit of Contra Industries Private Limited, a company engaged in manufacturing and assembling of LED lights, CA Varun has decided to attend physical inventory count process of the company on 30th and 31st March, 2024. The inventories are lying at three different locations - two such ...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(c) The auditor should decide whether relevant information is properly disclosed in the financial statements. Explain with reference to scope of audit. (3 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(d) SQC 1 dwells upon engagement quality control review (EQCR) as part of system of quality control in a firm. Why is such a review required? For which type of engagements EQCR is mandatory? What should be approach of firm for engagements for which EQCR is not mandatory? (3 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(a) WTE Private Limited is engaged in business of manufacturing a product liable to GST @ 5%. The input raw materials for manufacturing this product are liable to GST @ 12% and 18%. As a result, at the end of financial year, ITC on inputs amounting to ` 60 lacs is accumulated in Electronic Credit ledger and refunda...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(b) The objective of an auditor in accordance with SA 315 is to identify and assess risks of material misstatement at financial statement level and assertion level. Which specific activities an auditor is required to perform for the purpose of identifying and assessing risks of material misstatement? (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(c) You have been appointed as an auditor of ABC Hotel, a three star hotel, for Financial Year 2022-23. As an auditor what are the special points that need to be considered in verifying the Inventories in the nature of food and beverages? (3 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(d) Professional Behaviour is one of the fundamental principles governing professional ethics. Explain its meaning. Also, give example of a situation where a Chartered Accountant fails to follow this principle. (3 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(a) CA Z is appointed as statutory auditor of BETA Private Limited for the year 2023-24. There exists an internal audit function in the company headed by its Chief Internal Auditor, CA K. Valuation of trade receivables of company is assessed as area of higher risk by statutory auditor. He wants to take direct as...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(i) assign checking of accuracy of aging of trade receivables to Chief Internal Auditor? (ii) assign evaluation of adequacy of provision based on aging of trade receivables to Chief Internal Auditor? (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(b) The audit of Government expenditure is one of the major components of Government audit. Briefly explain the basic standards set in relation to audit of Government expenditure. (4 Marks) OR
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(c) Cinescreen Multiplex Ltd. is operating cinemas in different locations in Mumbai and has appointed you as an internal auditor. What are the areas that need to be verified in relation to receipts from sale of Tickets? (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(d) Given below is a table containing Column A and Column B. Column A contains description of certain controls in an automated environment. Complete Column B by stating appropriate type of control. Column A (Description of control in an automated environment) Column B (Type of control) Reasonableness checks ...
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Inter_P5_Audit_Auditing_and_Ethics_May_2024_MTP_1_Questions.pdf
Audit
MTP
May_2024
(e) An engagement partner takes overall responsibility for maintaining audit quality in an audit engagement in accordance with SA 220. What are his objectives in taking and emphasizing such responsibility? (3 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(a) DEF Ltd. is a profit-oriented company engaged in the FMCG sector. During the audit for the financial year ended 31st March 2025, the auditor observed that the company’s profit before tax from continuing operations has been highly volatile over the past few years due to fluctuations in input costs and competiti...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(b) OPQ Ltd. is a widely held company engaged in manufacturing activities. The management of the company is responsible for preparation of financial statements. The shareholders of the company are not involved in day-to-day operations. Downloaded From www.castudynotes.com Join Us on Telegram http://t.me/canotes_i...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(c) CA A is the statutory auditor of AB Ltd., a company engaged in manufacturing high-precision industrial components used in the automobile sector. The company has experienced significant fluctuations in its gross profit ratio and raw material consumption during the current year as compared to previous years. ...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(a) Zetta Manufacturing Ltd. is engaged in the production of textile machinery components. During the course of audit, the auditor observed fluctuations in the purchase quantity and prices of raw materials as compared to previous years. The management has provided data relating to consumption, stock composition, a...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(b) N Ltd., a manufacturing company, has availed a Cash Credit Facility of ` 1 crore from XY Bank Ltd. As per the latest stock statements submitted for the quarter ended 31st March 2025, the Drawing Power (DP) is ` 80 lakh. The outstanding balance in the cash credit account as on the balance sheet date is ` 75 lakh...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(c) QRS & Associates, a firm of Chartered Accountants, is handling multiple audit engagements across diverse industries. One of its clients, Nova Manufacturing Ltd., is engaged in heavy engineering, whereas another client, Sparkle Retail Ltd., operates a chain of consumer retail outlets with a high volume of transa...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(a) Raghav Mehra & Co., Chartered Accountants, were appointed as the statutory auditors of Jeep Manufacturing Limited for the financial year 2024–25. The company is engaged in large-scale production of automobile components and Downloaded From www.castudynotes.com Join Us on Telegram http://t.me/canotes_ipcc maint...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(i) Examine whether the approach of CA Raghav Mehra is correct. (ii) State the audit procedures that should be performed regarding opening balances in such cases. (5 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(b) Arvind & Associates, Chartered Accountants, were appointed as auditors of Stellar Appliances Ltd. for the financial year ended 31st March 2025. During the course of audit in June 2025, the auditor observed that the company operates in a rapidly changing market environment and there were frequent post year-end ...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(c) Nature Charitable Trust runs a multi-specialty hospital in Noida. The hospital earns revenue from patients, donations, subscriptions, government grants and income from investments. During the audit for the year ended 31st March 2025, the auditor, CA A, observed the following: • The hospital maintains a p...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(a) FGH & Co., Chartered Accountants, have been appointed as the statutory auditors of Alpha Ltd., a company engaged in manufacturing electrical equipment. The company follows a strict reporting schedule and requires continuous interaction with auditors during the audit process. During audit planning, the engag...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(b) RS & Co., Chartered Accountants, were appointed as statutory auditors of Zifi Infra Ltd., a listed company engaged in infrastructure development. During the course of audit, it was observed that: • The audit partner, CA R, had a close personal relationship with the CFO of the company. • The firm had also ...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(c) “Before the commencement of audit, the joint auditors should discuss and develop a joint audit plan”. Discuss the points to be considered in developing the joint audit plan by the joint auditors. (4 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(a) Explain the objective of the auditor to express an appropriately modified opinion as per SA 705 – Modifications to the Opinion in the Independent Auditor’s Report. Also, discuss the circumstances under which the auditor is required to issue a qualified opinion. (5 Marks)
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(b) CD Manufacturing Ltd., engaged in the production and trading of consumer goods, has significant inventories comprising finished goods and goods held for resale. During the course of audit for the financial year ended 31st March 2025, the auditor observed that inventory includes certain slow-moving and obsolete ...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(c) YZ Limited is engaged in the business of manufacturing electrical equipment. During the course of audit for the financial year 2024–25, CA R, the auditor, observed that while certain expenses like rent, power and fuel were subjected to monthly trend analysis, a large number of other expenses such as travelling...
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Inter_P5_Audit_Auditing_and_Ethics_May_2026_MTP_Series_2_Questions.pdf
Audit
MTP
May_2026
(a) YZ & Co., Chartered Accountants, were appointed as auditors of Shree Ltd. for the financial year 2024–25. The auditor proposed to sign the audit report on 30th June 2025. Management provided written representations dated 10th June 2025 and refused to update them closer to the date of the auditor’s report, s...
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