Auditguru Auditguru Frequently Asked Questions(FAQ) Auditguru Auditguru

Soft Copy of Notes will be provided for all our courses till lockdown.
Due to complete lockdown our services will be restricted

 Meet Us Here
Rohit AgrawalRohit Agrawal asked 1 year ago
3 Answers
RaviRavi Staff answered 1 year ago

14. An educational institute was collecting fees from their students by cash/ cheque / draft and through net banking. Institute follows the policy to account for the fees received in the year of receipt only and for the cheques or drafts received but not deposited in bank or credited in bank account, should be shown in reconciliation statement. The internal auditor of branches noticed that at some branches only the fees received up to 25th March are accounted for in the same year and the receipts after that date are carried forward to be accounted for in the next financial year. The fees collected in these branches between 25th to 31st March amounted to Rs. 15 lakhs for the year 2017-18 and the collection for the financial year ended 31st March 2018 amounted to Rs. 115 crores. The auditor was of the view that it will not give a true and fair view on institute’s revenue for the year. What do you think should be the next step of the auditor?
(a) The branches have accounted for those receipts in the next financial year so the auditor can ignore
the observation.
(b) Auditor should report the matter in Executive Summary paragraph and highlight it as significant
internal control lapse.
(c) Internal auditor can discuss the matter with the management to take a strict action against the
branches not following institute’s policy.
(d) Auditor should get the accounts modified and report the matter in action taken report.

15 lakhs in 115 crore is 0.13 % it is not material so there is no need for qualification , answer should be “b”  

Rohit AgrawalRohit Agrawal answered 1 year ago

sir,this was not the question i was referring to question 14 of mock test paper 1

RaviRavi Staff answered 1 year ago

MTP-1 New Course Q14 is same as i have pasted above. Please tell me key words of question you are referring to.

Call Back Request