1211. A company has resorted to heavy sale of stock with a view to pay dividends to shareholders.As an auditor, you should :
A. Justify it
B. Not justify it
C. Ignore it *
D. Report it
1212. A company has earned profits and declared dividends, but does not want to pay dividend due to shortage of cash. If asked, as an auditor, you should suggest that
A. Dividend should be paid
B. Dividend need to be paid
C. After dividends are declared, they must be paid out within 42 days.
D. The dividend must be paid in forty-five days *
1213. You find that company has given loan to its shareholders for purchasing of its shares . would you , as auditor
A. Allow it
B. Not allow it *
C. Ignore it
D. None of the above
1214. Auditor finds that there is a change in the method of valuation of stock; whether he should :
A. Allow it
B. Disallow it
C. Allow it with a note to this effect *
D. Ignore it
1215. In the annual general meeting of a company, the auditor is questioned as why he has signed he balance sheet when assets would not realise the value shown in it . Which of the auditor’s aforementioned arguments is true?
A. Market value of assets has nothing to do with assets
B. Market worth of resources can’t be found out
C. Assets are shown treating it as a going concern *
D. None of the above
1216. The auditor finds that a company has paid interest out of capital .Whether he should :
A. Allow it
B. Not Allow it *
C. Ignore it
D. None of the above
1217. The auditor did not care to check adequacy of provision for bad and doubtful debts whether he can be held :
A. Liable for it *
B. Not liable for it
C. Liable criminally for it
D. None of the above
1218. The auditor resorted to test checking and with the result , he could not disclose certain frauds. whether he can be added:
A. Liable for it *
B. Not liable for it
C. Liable criminally for it
D. None of the above
1219. During the course of an audit , an auditor finds that no vouchers are available fo certain payments. whether he should :
A. Seek proper explanation for it
B. Demand vouchers for it *
C. Ignore it
D. Accept certificate for it
1220. Premium received on issue of shares , later forfeited ,should be transferred to :
A. Capital reserve
B. Shares forfeited account
C. Capital account
D. None of the above