DCM3202 PRINCIPLES AND PRACTICE OF AUDITING JAN-FEB 2026

Description

SESSION	JAN 2026
PROGRAM	BACHELOR OF COMMERCE
SEMESTER	VI
COURSE CODE & NAME	DCM3202 PRINCIPLES AND PRACTICE OF AUDITING

 

Assignment Set – 1

 

Q.1. Answer the following: a) Explain the limitations of financial audits. b) Explain the meaning and types of audit evidence. (5+5 = 10 Marks)

Ans 1.

1. a) Limitations of Financial Audits

A financial audit is the independent audit of financial statements to ascertain whether they present a true and fair view of financial standing. While it’s an important task, auditing has several significant limitations the users of the financial statements that have been audited must be aware of.

An audit, in the first place, is conducted through a limited examination of data rather than thorough verification of each transaction. Auditors employ sampling techniques and this implies

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Q.2. Describe the procedures an auditor should follow while verifying and valuing fixed assets of a business enterprise. (10 Marks)

Ans 2.

Fixed assets are tangible items owned by an organisation for use in operations rather than for resale. They are a part of the verification process and an integral part of review of the balance sheet since fixed assets usually make up a significant percentage of organisational assets. The auditor must verify both the existence and the proper valuation for fixed assets.

Physical Verification Procedures

The auditor needs to inspect a representative sample of fixed assets, to ensure their existence and

 

Q.3. Write brief notes on: a) Internal Check. b) Benefits of Audit Programme. (5+5 = 10 Marks)

Ans 3.

1. a) Internal Check

Internal check is a system of organization in which the performance of a person is automatically monitored continuously by a different person during the course of their duties. The primary objective of internal checking is to detect and prevent errors and frauds at the time of their execution, by dispersing related duties among different employees so that nobody is in complete control of any operation from beginning to end.

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Assignment Set – 2

 

Q.4. Discuss the qualifications and disqualifications of an auditor of a Public limited company. (10 Marks)

Ans 4.

The appointment of a competent and independent auditor is crucial to the reliability of the financial reporting system. It is the Companies Act, 2013, as well as the Chartered Accountants Act, 1949 both govern the qualifications and who is not qualified to serve as the statutory auditor of any public limited corporation in India.

Qualifications of an Auditor

Section 140 of the Companies Act, 2013 specifies that only the Chartered Accountant holding a

 

Q.5. Analyse the chief points to keep in mind while undertaking the Audit of Clubs. (10 Marks)

Ans 5.

The clubs are non-profit organizations created mostly to support activities that are social, cultural, recreation or sports activities for their members. Audits for clubs differ in comparison to the audit of commercial entities in several important ways, due to their unique organisational structure in terms of sources of money, and the type of transactions. The auditor who is performing the audit of a club must be familiar with the specific aspects of the club.

Governing Documents and Legal Framework

The auditor needs to first look over all the Memorandum of Association, Articles of Association

 

Q.6. Elaborate on the challenges in auditing the books of local bodies. (10 Marks)

Ans 6.

Local bodies, such as municipal councils, municipal corporations panchayats, urban development authorities, and port trusts perform important public duties and are charged with large public budgets. The auditing of the financial statements of local bodies presents distinctive challenges which differ from those who audit commercial companies or other public sector organizations.

Multiple Regulatory Frameworks

Local authorities are subject to an extensive web of state and federal laws Local authority