CS Final :: Secretarial Management and System Audit : June 2005

Roll No…………………
Time allowed : 3 hours		Maximum marks : 100
Total number of questions : 7		Total number of printed pages : 3
PART—A
(Answer ANY TWO questions from this part.)

Comment on the following :

(a)

(i)	Though having successfully qualified in a rigorous examination and gaining experience on hand in the profession while dealing with relevant matters, there is a need for the ‘continuing education’ for a Company Secretary.
(ii)	Multi-disciplinary partnership firms consisting of Company Secretaries, Chartered Accountants and Cost Accountants are imperative to meet global competition.

(3 marks each)

(b)

The role of a Company Secretary goes much beyond the Companies Act, 1956.

(6 marks)

(c)

A professional should command and not demand respect.

(4 marks)

(d)

Code of conduct is an effective tool for sustainable professional growth and credibility.

(4 marks)

(a)

Discuss the points of scrutiny by a Company Secretary in practice during the course of secretarial audit where persons resident outside India have acquired the following securities issued by an Indian company on rights basis :

—	Equity shares;
—	Preference shares; and
—	Convertible debentures.

(4 marks)

(b)

How would you verify the statutory compliances in respect of

(i)	shifting of registered office of a company from Mumbai to Pune ?
(ii)	contracts relating to allotment of shares ?

(4 marks each)

(c)

What steps would you take while giving certificate as contemplated by clause 47(c) of the listing agreement ?

(6 marks)

(d)

“Though a company has to register transfer of its securities in the name of the transferee on lodgment of proper documents, there are certain exceptions under clause 12 of the listing agreement.” Discuss.

(2 marks)

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P.T.O

( 2 )

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(a)

Discuss briefly the contents and format of the ‘due diligence certificate’ to be given by the lead merchant banker to the SEBI along with the draft offer document. Specify the documents which are required to be annexed.

(10 marks)

(b)

Mention the ‘audit checks’ which are to be exercised by a Secretary in whole-time practice in respect of the information provided in the annual return against the item ‘capital structure of the company’ and ‘Board of directors’ before signing the said return.

(6 marks)

(c)

What is the significance of the search report in respect of the records maintained by the Registrar of Companies (ROCs) vis-a-vis borrowings from the financial institutions ?

(4 marks)

PART—B

(Answer Question No.7 which is compulsory and any two of the rest from this part.)

Critically examine any four of the following :

(i)	Management audit requires a business doctor to find the symptoms and to diagnose the company’s ailment at the right time to take corrective action. The approach to management audit needs to be formulated accordingly.
(ii)	“Operational audit is a new phase of internal audit technique.” While management audit is an audit of the management, operational audit is an audit for the management.
(iii)	External auditor has no right to comment on the work of the internal auditor, nor there is a need for any interaction between the two.
(iv)	The application of statistical sampling techniques by an auditor before expressing an opinion needs careful consideration of certain important factors and exercise of judgement almost at every stage by the auditor.
(v)	A plethora of reports and returns are generated/received by managers at different levels daily, weekly, etc., from the operating and functional departments. Hence, there is hardly any necessity for a separate department/system for ‘management information’.

(5 marks each)

(a)

Draft an internal control questionnaire to evaluate purchase functions.

(10 marks)

(b)

Design an internal audit programme to assess the efficiency of share transfer department.

(6 marks)

(c)

Discuss the principal areas for review by a cost auditor in respect of overheads and indirect expenditure.

(4 marks)

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Contind...

( 3 )

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(a)

Write notes on the following :

(i)	Organisational need for management audit
(ii)	Cost Audit (Report) Rules, 2001.

(5 marks each)

(b)

Distinguish between management audit, financial audit and internal audit.

(10 marks)

(a)

Is systems audit an evaluation of adequacy of controls ? Briefly discuss the controls which are to be reviewed.

(8 marks)

(b)

Discuss the objectives of information systems auditing.

(6 marks)

(c)

“Computer systems have affected how auditors carry out their basic functions of evidence collection and evidence evaluation.” Elucidate.

(6 marks)

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