Suggested Hints to the Practice Paper

1 (a)
As per Guidance Note on Treatment of Reserve Created on Revaluation of Fixed Assets, issued by ICAI, Revaluation Reserve is not a realised gain and hence cannot be so adjusted.
1 (b)
Refer AS-29 regarding Onerous Contracts
1 (c)
Discuss in light of AS-10, AS-28 and AAS-9
1 (d)
Refer AS-18
2 (a)
Section 224 (8) deals with mode of fixation of remuneration but does not specify the mode of recovery of the remuneration. Further, as a matter of professional ethics it is not proper to link the delivery of the audit report conditional upon the receipt of audit fees. Auditor’s Right to Lien may also be discussed.
2 (b)
Refer Notification No.1.CA(37)/70
2 (c)
See Clause 10 Part One Schedule I
2 (d)
Refer Notification No.1.CA. (153) 86
3 (a)
Refer AAS-6
3 (b)
Refer Chapter on Audit of Indirect Taxes
4 (a)
Refer Chapter on Audit of NBFCs
4 (b)
Refer Chapter on Investigations
5 (a)
Refer Guidance Note On Section 227 (3) (E) And (F) Of The Companies Act, 1956
5 (b)
Refer Chapter on EDP Audit
6 (a)
Refer Chapter on Bank Audit
6 (b)
Refer Chapter on Audit of General Insurance Companies
7 (a)
Refer Chapter on The Company Audit
7 (b)
Refer CARO, 2003
8 (a)
Refer Chapter on Other Aspects – Corporate Governance Clause 49
8 (b)
Refer Chapter on Audit of PSUs
8 (c)
Refer Chapter on Audit of Cooperative Societies
8 (d)
Refer AS-18
8 (e)
Refer Chapter on Audit of Members of Stock Exchanges