CWA ICWA Inter Group I : Commercial and Industrial Laws and Auditing - June 2009

CWA ICWA Inter - Group I • Commercial and Industrial Laws and Auditing • June 2009

This Paper has 55 answerable questions with 0 answered.

I–P6(CIA) Syllabus 2008
Time Allowed : 3 Hours	Full Marks : 100

The figures in the margin on the right side indicate full marks.
Answer Question No. 1 & Question No. 5 which are compulsory and attempt any two from the rest in Section I and any two from rest in Section II
SECTION I (Marks 50)
Marks

The figures in the margin on the right side indicate full marks.

Answer Question No. 1 & Question No. 5 which are compulsory and attempt any two
from the rest in Section I and any two from rest in Section II

SECTION I (Marks 50)

Marks

1.	Comment on the following statements based on legal provisions:			2x7=14
	(a)	An hirer, who obtains possession of a car from its owner under a hire purchase agreement, sells the car to a buyer who buys in good faith and without notice of the right of the owner. The buyer gets good title to the car.			(0)
	(b)	A limited liability Partnership is a body corporate.			(0)
	(c)	A complaint can be filed under Consumer Protection Act within 36 months from the date on which cause of action arose.			(0)
	(d)	Every person is competent to contract.			(0)
	(e)	‘A’ (workman), is laid-off by his employer ‘B’ because of strike in another part of ‘B’s establishment. ‘A’ is entitled to get compensation for lay off under the Industrial Disputes Act, 1947.			(0)
	(f)	A workman while returning home after duty was murdered within the premises of the employer. A’s widow is not entitled to compensation under the Workmen’s Compensation Act 1923.			(0)
	(g)	‘A’ saved life of ‘B’, who was drawing. Latter ‘A’ demanded remuneration from ‘B’ for saving him since saving of life was valid consideration, ‘A’ would succeed.			(0)
2.	(a)	Mr. Paul gave a cheque dated 07.02.2009 for Rs.10,000 to Mr. Roy for payment of Mr. Roy’s Tution fees. Cheque was dishonoured for insufficiency of funds. Mr. Paul is liable for prosecution.		2	(0)
	(b)	Mr. A agreed to purchase 100 bales of cotton from ‘B’ from his large stock. ‘A’ sent his men to take delivery of cotton. On completion of packing of only 70 bales there was accidental fire and entire stock including paced 70 bales were destroyed. There was no Insurance cover. Who will bear the loss?		2	(0)
	(c)	‘A’ executed a guarantee in favour of State Bank of India as Security for a loan to ‘B’. Latter ‘A’ contended that the guarantee was not enforceable as it was not supported by consideration as he was not paid guarantee commission. Is ‘A’s stand correct in law?		2	(0)
	(d)	Is there any time limit for payment of Bonus under Bonus Act?		2	(0)
	(e)	Occupier of a factory in relation to the company means factory Manager of the factory. Answer based on legal provision.		2	(0)
	(f)	Every employee, whose salary is not more than Rs.3500 per month is entitled to Gratuity as per Payment of Gratuity Act. State the legal provision if not correct.		2	(0)
	(g)	State the rights and liabilities of ‘A’ in the following cases;
		(i)	‘A’ is owner of the factory building and also of product ‘A’ authorizes ‘B’ to take an insurance policy on factory building for Rs.2 lacs. ‘B’ procures a policy for Rs.2 lacs on factory and another policy for Rs.2,000 on products. ‘A’ refused to reimburse to ‘B’.	2	(0)
		(ii)	‘A’ authorises ‘B’ to buy 500 pieces of Sunlight soap for him but ‘B’ buys 500 pieces Sunlight and 200 pieces Henko at a total price of Rs.5000. ‘A’ refused to pay to ‘B’.	2	(0)
		(iii)	An Auctioneer advertised in a newspaper that a sale of office furniture will be held at Kolkata on 29.11.2009. ‘A’ came from New Delhi to buy the furniture but the auction was cancelled. Whether ‘A’ can a file a suit against the auctioneer for his loss of time and cost.	2	(0)
3.	(a)	As per provision of Factories Act, every factory is to appoint at least one Welfare Officer – Do you agree? Answer citing rules.		2	(0)
	(b)	A minor can be appointed as agent. – Comment.		2	(0)
	(c)	What is dominant position (Competition Act, 2002)?		2	(0)
	(d)	In an Auction sale, a bid once made can be withdrawn by the Bidder. Comment citing rules.		2	(0)
	(e)	Stipulation as to time of payment is deemed to be essence of a contract of sale.—Comment.		2	(0)
	(f)	As per sales order A is to supply 20MT of sugar to B.A however supplied 22 MT and billed for accordingly. B paid cost of 20MT which was ordered by B. Can A take any action against B?		2	(0)
	(g)	When property passes to the buyer under ‘goods on approval’ or ‘on sale or return’?		2	(0)
	(h)	A Railway company refuses to deliver certain goods to the consignee except upon payment of Rs.2000 being excess/illegal charge. The consignee paid the said amount in order to obtain the goods. Is there any remedy?		2	(0)
	(i)	What is fraud under Indian Contract Act, 1872?		2	(0)
4.	(a)	Write explanatory notes on any four:		4x4=16
		(i)	Effects of ‘coercion’ on a contract;		(0)
		(ii)	Powers of Inspectors (Minimum Wage Act);		(0)
		(iii)	Bailee’s particular lien;		(0)
		(iv)	Recovery of Gratuity;		(0)
		(v)	Seller’s lien.		(0)
	(b)	Mr. B (a broker) by the order of Mr. A purchases 10 Drums of oil for A from Mr. C. Afterwards Mr. A refuses to receive oil. Mr. C sues Mr. B who informs Mr. A but Mr. A repudiates the contract. Although Mr. B defends but failed. Mr. B has to pay cost, damagees and incurs expense. Can B recover any amount from A.		2	(0)

SECTION II (Marks 50) (Auditing)

SECTION II (Marks 50)
(Auditing)

Idle facilities.

(0)

Comment on the following statements based on legal provision:

2x7=14

(a)

It is mandatory that provisions of Audit Committee is applicable to all the companies.

(0)

(b)

When assets are revalued, the increase or decrease in value of fixed assets need not be shown in the Balance Sheet but should be adjusted in the Profit & Loss Account.

(0)

(c)

When Chairman of a Company is also a Mg. Director, the Companies Act provides the constitution of Board of Directors.

(0)

(d)

While auditing in computerized environment , overall objective and scope of audit remains same as for auditing in non–computerised environment.

(0)

(e)

Auditor’s primary responsibility is to detect errors and frauds.

(0)

(f)

An information system audit is entirely similar to that of financial audit.

(0)

(g)

Management emphasizes on problem identification rather than problem solving.

(0)

(a)

What are the limitation of Management audit?

(0)

(b)

State in brief the important points that should be considered by an Auditor while conducting vouching.

(0)

(c)

State the components of Audit risk.

(0)

(d)

State what aspects should be checked while conducting audit of ‘Bills receivables’.

(0)

(e)

Auditors are to observe certain standards in field work and reporting under GAAP/GAAS – Explain.

(0)

(a)

Under certain circumstances the accounts of Branches may not be audited. Comment citing rule position.

(0)

(b)

How as an Auditor you will verify the ‘Sales Tax/VAT?’

(0)

(c)

As an Auditor, how you will audit in the case of data processing through computer service centre?

(0)

(d)

Explain how the following are dealt with under CARO:

(i)	Transactions in which Directors are interested;

(ii)	Internal Audit System.

2+2

(0)

(e)

Find out the difference between Indias’ GAAP & US GAAP is respect of:

(i)	Pre–operative Expense;

(ii)	Foreign currency transactions.

2+2

(0)

(a)

State the basic items which the Auditor should be familiar to under stand the computer system used by the Clients.

(0)

(b)

How you will conduct the:

(i)	Physical verification of Fixed Capital Assets;

(ii)	Idle facilities.

2+2

(0)

(c)

How Internal Audit become an important Management tool . ___ Answer with reasons.

(0)

(d)

(i)

Ray & Bose, Chartered Accountants, who were appointed as Auditor for Financial Year 2008–09 were removed during the month of December 2008. Whether the said Auditor can claim any compensation?

1+1+4

(0)

(ii)

Statutory Auditor of the company is legally bount to attend the AGM of the company. State correct position.

(0)

(iii)

Auditor has no liability under Companies Act. 1956. Do you agree? Answer citing Rules.

(0)

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