3. |
(a) |
Following are the data available from a company which has both domestic & export sales. The company is subject to Cost audit. Prepare a statement of export profitability. |
8 |
| |
Production | | 10,000 | Units |
Sales |
Domestic | | 9,000 | units @ Rs.22 per unit |
Export | | 1,000 | units @ Rs.17 per unit |
Raw materials consumed | Rs. | 90,000 | |
Imported component used only for Export quality | Rs. | 3,000 | |
Direct Labour | Rs. | 10,000 | |
Factory Overhead | Rs. | 15,000 | |
Administrative Overhead | Rs. | 5,000 | |
Export Packing | Rs. | 3,000 | |
Freight and Packing for Domestic Sales | Rs. | 4,500 | |
Handling at Port | Rs. | 500 | |
Opening W.LP | Rs. | 10,000 | |
Closing W.LP | Rs. | 5,000 | |
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|
|
|
For export an imported component is to be used at a cost of Rs.3/- per unit. The indigenously produced component that is used for domestic sales and included in raw material consumption is Rs.4/- per unit.
Draw back on the 1,000 units exported is Rs.1,000 |
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|
(b) |
It is said that “Cost Audit” is “Efficiency Audit”. Explain this statement. What is the evidence from the Cost Audit Report that Cost Audit is “Efficiency Audit”? |
7 |
4. |
(a) |
The profits as per Financial A/c’s of XYZ Cement Ltd. for the year 2002-2003 was Rs.1,34,27,516. the profit as per the Cost Accounting Records for the same period was more.
You are required to prepare reconciliation statement and arrive at the profit, as per the cost Accounts. The following details have been collected from the Financial Accounting schedule and cost Accounting . |
8 |
| |
| Figures in Rs. |
| Financial A/cs | Cost A/cs |
Value of stock: |
Opening W.LP Opening Finished Goods Closing W.LP Closing Finished Goods Interest income form Inter corporate deposits Donations given Value of Cement taken for own consumption Cost of power drawn from own Wind Mill. At EB Tariff At Cost |
29,52,315 2,48,37,410 41,72,635 3,67,51,410 6,14,250 4,75,250 3,75,920
— 34,10,420 |
23,45,720 2,72,16,930 36,35,345 4,15,24,148 — — 3,45,200
48,58,415 — |
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|
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(b) |
The management of a very big Public Sector Company suspects omn the existence of “ghost workers “. You, as an Internal Auditor of the company are required to formulate a system of internal Control for Payment of wages and salaries. |
7 |
Section—II (50 marks) |
5. |
(a) |
Indicate whether the following statements are ‘True’/’False’. You need not give any justification in defence of your answer:
(i) | Physical verification is not a part of Stock Audit conducted by a bank. |
(ii) | The management of ICWAI is entrusted to Department of Company Affaira. Govt. of India. |
(iii) | In India, standard Auditing Practices (SAPs) are issued by ICWAI. |
(iv) | A copy of the cost Audit Report must be attached to Company’s Income Tax Return. |
(v) | No Professional qualifications are prescribed for a Management Audit. |
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1x5=5 |
|
(b) |
Fill up the blanks with appropriate words:
(i) | The extent and efficiency of _______ determined the scope of the Auditor’s work. |
(ii) | A Cost Accountant may be appointed as a _______ under the Insurane act. |
(iii) | Management Audit requires _______ approach. |
(iv) | Corporate image and _______ are closely related concepts. |
(v) | An auditor can be held liable under the _______ law if he intentionally makes a false statement in his report. |
|
1x5=5 |
|
(c) |
Match the statement under column (A) with the appropriate statement under column (B)
| A | | B |
(i) | Propriety Audit | (a) | An audit for the management |
(ii) | Efficiency Audit | (b) | Evaluates the performance efficiency |
(iii) | Operational Audit | (c) | Verifies if activities are in accordance with the system |
(iv) | Performance Audit | (d) | To ensure optimum return |
(v) | Compliance audit | (e) | An audit of execution action |
|
1x5=5 |
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(d) |
Write short note on “Environment Pollution” |
5 |
6. |
what is the role of the audit Committee as per SEBI guidelines and as stipulated in Section 292A of the Companies act? |
15 |
7. |
Prepare a list of precautions and safeguards a Cost accountant should take before issuing a certificate to a client. |
15 |
8. |
(a) |
List the tasks that can be performed by a Cost Accountant in practice in the following areas:
(i) | Direct Tax Laws; |
(ii) | Central Excise. |
(iii) | Banks and Financial Institutions |
|
3x3=9 |
|
(b) |
The following transactions are extracted from Stores Bin Card relating to a component during the year 2002-2003: |
6 |
| |
Date | Receipts (units) | Issues (units) | Balance (units) |
1.4.2002 18.4.2002 10.1.2003 16.3.2003 23.3.2003 Total consumption |
200 — — 200 — — |
— 100 50 — 250 400 |
200 100 50 250 — — |
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|
|
Calculate the Inventory Turnover Ratio. |
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__________ |