Audit Paper Review | Audit Paper Analysis May 2026 | Check Pinned Comment

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[00:00:00]Yes. Hi guys.

[00:00:05]Uh 1 minute. I'm just checking whether the live is proper or not.

[00:00:12]>> Yes.

[00:00:13]>> Perfect.

[00:00:18]So the first thing the MCQ paper was solved completely with answers. Fantastic paper. those who really learned conceptually the application of the subject correctly very practical paper easy for them the MCQs sorry if at all any of you felt the paper was difficult which means I'll show you certain statements I will link it with directly the marathon not even with the you know material all that fine fine anyhow uh let me directly start the paper answers so the questions were very easy technically they're not they are not difficult MCQ paper was not at all difficult if at all you are feeling difficult It's purely because probably somewhere your conceptual understanding was not up to the mark because those who really learned conceptually the application of the e auditing like provisions for them it's very simple breeze now look at so they're asking special mention accounts borrower A SMA zero borrower B SMA zero up to 30 days of default it is SMA 0 31st day to 60th day it's SMA 1 61st day to 90 days it is SMA 2 and beyond 90 90 days on 91st Okay, it is treated as NPA. That's it.

[00:01:30]Okay, so it's a option number A. Next, now here they're asking interest on advances by term deposit NSA life insurance. Even though amount is not recovered, you can recognize it on acral basis. You can recognize on acral basis until adequate margin is available.

[00:01:47]Okay. So here the answer is option B.

[00:01:49]Interest on secured advances may be recognized on acural basis when adequate margin exist and on bills purchased only portion of discount earned up to 31st mark should be recognized and rediscounting charges should not be netted off. This is the option in your in your question paper probably MCQ yes or no like um uh the option might be varying okay just you cross check with that next consortium you know what happens in consortium suppose lead bank is there they are collecting EMI and they are not transferring the EMI to the member bank the member bank will classify the borrower account as NPA even though the borrower limited so classify as NPA until this bank actually recovers the shares. Therefore the answer is option number C. The next one, which of the following details are required to be disclosed? You know, if you see the marathon, the very first topic I discussed in items of financial statements is um additional regulatory information. In that I specifically insisted on struck off companies, what to be disclosed? I even told this is the way question can come. I specifically told exactly the same they have they have asked you know with respect to struck off companies what you should disclose. You should disclose name of the company, nature of the transaction, balance, outstanding relationship. Only four points 1 2 3 five which means 1 2 3 5 option number B. Okay, next one. Next one. This is regarding a quality control. Which of the following need not be documented? No need to document.

[00:03:16]Observations about efficiency of audit.

[00:03:18]First of all, this we won't do. How efficiently our team did the audit. That is never a part of quality control checking. Okay. So this you don't have to document. Option number C. Next coming to which of the following does not fall within the responsibility of company regarding IFC internal financial controls which do not come under IFC responsibility. Look at okay uh board of directors have to appoint an expert to state IFC were commenurated with the size. That's absolutely wrong. You know directors have a responsibility. As per board of directors they have to get satisfied whether financial controls and uh risk management are the robust. Okay.

[00:03:53]Direct responsibility statement should mention about IFC and uh audit committee has to evaluate financial controls that's it these three are responsibility of the directors and board okay top management those charged with governance but they don't have to appoint an expert this is not in their responsibility they're asking which is not in their responsibility okay that's the answer next one this is a fantastic question guys you just opened my SA 530 provision SA 530 I have given full video on the YouTube 530 full we have given on the YouTube these points specific Specifically I insisted and told okay I have given my full flow class on SF 530 next now look at so here uh yeah seventh question he identified misstatement in some transaction he needs to project them to population now they're asking though they give entire which is the correct approach of projection in projection what is the correct approach when misstatement is established at anomaly anomaly should be excluded in the projection so when you're you know when you find a mistake no first you should analyze the mistake Nature and cause of the misstatement. There's a provision.

[00:04:54]Okay. Uh is it anomaly or non-anomaly?

[00:04:56]Only non-anomaly should be projected.

[00:04:58]Anomaly should not be projected. And most of the misstatements that we find in audit were anomalies. We really in practicality don't use anomalous non-anomalous projection all that. This point I even told in 530 specifically insisted on these points and sentences.

[00:05:11]So when anomaly when a misstatement is treated as anomaly, it shall be excluded from project projection. However, if it is uncorrected, it has to be considered in total misstatement along with non-anomous projection misstatement.

[00:05:24]That's it. So, this is option number B.

[00:05:26]Then coming to this one. Britain representation was not provided. My management failed. Which of the following should not be taken? Should not be okay. You need to discuss with management. Sorry, you need to discuss with the management. Reevaluate integrity. Take appropriate action.

[00:05:40]These are the three actions that you should take which you should not take.

[00:05:44]C. Treat the absence as disagreement issue qualify. This point is not there.

[00:05:48]When management refuses you to provide when management refuses to provide written presentation what auditor has to do three points were there. This is not there in that. So option number C that's it. Next one this one which is which is this A is completeness. Okay. B is uh cut off. C is uh C is regarding valuation. D is regarding existence.

[00:06:13]Okay. uh you know uh data I mean sorry uh confirmation procedure that is existence checking ma uh this is aging analysis aging is done for valuation and uh cutoff is regarding accounting period checking and uh you I hope you can see that so automatically balancing balancing will be completeness next he formulated audit program only after obtaining satisfactory understanding of internal control system yes if at all you do not study this is something you can easily understand and write even if you have not read the syllabus also. If auditor does not care to study controls, his audit program may become unwidely and unnecessarily heavy and the object of audit may be altogether lost. Yes or no? Right? Am I just a minute? Am I audible clearly? Yes. So object of audit may be altogether loss. Yeah, this is the point. So the answer is B. So they're asking which of the following statement is correct. So this is the correct statement. Next one. 11th question. Some 100 invoices were tested out of that there is incorrect revenue will be there were not selected that's a detection risk that's actually a detection risk that it's a sampling risk and bulk discounting policy was misinterpreted this is not a sampling risk that's a non-sampling risk human error misinterpretation of audit evidence these are examples of non-sampling risk so both are detection risk the answer is a both are detection risk only but one is sampling risk another one is non-sampling risk remember this is there in audit dividend chapter itself this is not even there in 530 30. This is there in audit evidence chapter itself. And next one, next one.

[00:07:44]Additionally here if you see yeah I think as per understanding of WHMA which will fall outside the scope of financial statements audit. What is out of the scope of the audit? Nature object and scope. What is not in the scope of audit? Exclusion from the scope of the audit. You know assessing physical condition of building not in the scope of the audit. Determining sustainability of the building not in the scope of the audit. One entry were not in the scope of the audit. Therefore answer is option number A 1 and three. Next he perform various procedures yes or no one. So which type of procedure is performed?

[00:08:16]You know for first one trend analysis DCAB ma DCA DCAB the answer is DCAB. So the answer is D. In this part in this one my my paper code is LJB ma. DCAB means for example I think I need to show you DCAB. The auditor compares current year with the last year. This is trend analysis. You know he compared inventory turnover. This is ratio analysis. This is structural modeling statistical model. Whereas this is reasonableness test. That's it. Ma. So these are the four uh test that we have. What are the types of substantive analytical pos? We have two four types of substantive analytical and that one is tested. Next one. Next one. If you observe risk assessment 530 520 full chapter videos I have I have given on the YouTube itself.

[00:09:02]I have given on the uh I have given fully and I requested you to watch this fully just for the sake of MCQ. That's it. I always tell these chapters risk assessment internal control uh 530 520 you should not read for descriptive you should only read for MCQ purpose. This is what I even posted the full chapter videos on these two 530 520 full chapter video is there risk assessment full chapter video I posted on the YouTube next.

[00:09:25]Whereas here they're asking which of the following statement related to quality control is correct. There's only one statement which is correct. Statement number two. Quality control is designed to provide assurance that the firm and its personnel comply with standards and legal requirement. Therefore, the answer is only two. Next one. Evaluating compliance physical requirements. That's a preliminary engagement activity.

[00:09:45]Detailed audit plan. That's actually meaning of audit program. Determination of materiality is part of planning.

[00:09:51]Consideration of number is part of strategy. Okay. 2143.

[00:09:55]213.

[00:09:57]That's it. Oh, over entire 15 and 15 MCQs the answers were given to you. I hope u you're clear.

[00:10:06]Okay. And now coming to 34 charging. I will right away show you 90 plus marks can be attempted from the 34 strategy.

[00:10:13]Right away we will count it. Right away we'll count it. Okay. Next look at the first one. First one you see principle based approach rule based approach. Attitude of engagement partner while maintaining. This is regarding five marks part of three four strategy.

[00:10:31]Okay. Next, I'll come back to MCQs also.

[00:10:33]Wait, this is regarding sample size sampling method used. This is not there in the 34 strategy. So, I'm not counting it. Next one. The company's management has changed. The earlier management resigned all that examine the situation 58. This is completion and review. Yes, as a part of 34 strategy. Yes or no? So here in the descriptive one five marks question in the question number one is not part of 3/4 strategy because I always tell remember 3/4 strategy I always tell 3/4 means for descriptive purpose remaining 1/4 you always should ignore and read only for MCQ purpose this is what I clearly told just go and watch my videos next one so here how many marks came nine marks in the first question correct nine marks then question number two now here The audit release there is a limited documentation on how information flows. What are the areas relating to entity information system related process business process relevant to financial reporting that auditor should obtain understanding as a part of risk assessment. Um yeah this is this is again more not part of 34A because this is a risk assessment chapter just a minute because sometimes it can be items of financials also Yeah, this is 1/4 only. 1/4. This is not part of 3/4. So, this is another five marks question. Next, disadvantages.

[00:12:10]Yes, it is part of 3/4 strategy. 9 + 5 till now 14. Next.

[00:12:16]Discuss reporting requirements under car shareholding of promoters items of financials. Yes. 14 + 4 18 marks. Till now from 34 strategy just I'm just opening and showing you. Okay. Then this is a complete practical question which I always classify as 1/4. So I'm not counting this. I'm not counting this. You just check until 18 marks. Now next this is a audit report chapter 5 again 18 + 5 23 marks. I'm just counting it. You will understand 23 then because I have not seen this analysis so I'm doing it in live. Okay. Examples of significant matters 230. Yes. Four. 23 + 4 till now 27 marks only in descriptive only in descriptive 27 marks came next bright foods okay automated environment combination of auditors this is not in the 3/4th therefore I'm ignoring it while auditing outstanding balances to MSME state the disclosures which auditor yes it is part of so until it was 20 23 + 4 27 27 + 5 32 marks ma until it is 32 marks next Mere verification of accounting records is sufficient with reference to explain why auditor is expected to have a knowledge of disciplines other than accounting. This first chapter nature objective and scope. So another four which means only in the descriptive 36 marks still is attemptable. Next Jedx limited is a listed company. Identify explain uh the shares which the company is planning to issue. Auditor should verify valid for issue. This is items of financials 41 marks till now. Till now 41 marks STP has entered into lease agreement with two categories of vendors. Same less sir the key terms of engagement lease period all that. So this is again items of financial no different types of entities audit of different types of entities is there.

[00:14:04]Yes that is considered different types of entities is there as a part of our 34 strategy. Therefore 41 + 5 46 marks.

[00:14:14]Next SEA 260 related question 46 + 4 50 marks of the descriptive paper 50 sixth question I will leave it as choice or else wait in one question three four strategy related one 1/4th question is we'll see here so so 50 marks until question number five but I'll see if question number six has entire 14 marks and one question above limit okay engagement letter yes five marks is fully included paragraph yes another five marks is fully included. Cooperative yes types 7 is four marks is fully included. Oh my god. Audit strategy are I here 14 marks is included. So 50 + 14 64 marks is fully included. Yes or no? 64 marks came from 34 strategy only in the descriptive paper of 88 marks. Descriptive paper is for 70 + 14 plus internal choice for 8.

[00:15:07]Yeah 88 64 by 88 guys. Now again here you know 50 right? I'll eliminate here one question because no here in one question for example I will choose sixth question I will choose sixth question because for example you know I'll eliminate fourth question I will eliminate fourth question and I ch I choose sixth question in such a case this five will also be added if you follow three four strategic correctly 55 marks of the descriptive paper literally you can attempt 55 marks of the descriptive paper of 70 marks if you follow three four strategy only in descriptive. Now coming to MCQ paper. I will look at MCQ paper.

[00:15:51]Remember this is one of the desk you know I mean very practical paper. MCQ is super easy. Okay. Now look at look at the descriptive questions. Bank audit first six questions part of 3/4. So till now it is 55 55 + 6 55 + 6 61 marks.

[00:16:10]Okay. Next one. 61 + 2 63.

[00:16:16]63.

[00:16:21]Yeah. 63.

[00:16:24]Then this is SQC. 65 marks. This is 65 marks.

[00:16:34]MCQ point of view. MCQ point of view. I always insist even 1/4 topic also you must study only for MCQs you can watch my entire so technically for MCQ point of view I don't have to analyze this three four strategy so 55 marks from the descriptive and 30 marks in MCQ 85 marks is a total weightage that is tested from 34 strategy in this attempt where many students are feeling difficult that's it so that's it guys yeah so that's So I always tell even in the day before exam video one and a half day video I told five chapters I told you easily you could have attempted 40 to 50 marks of the descriptive paper just with confidence just one and a half day before exam you see the list of five chapters from those five chapters 45 to 50 marks of the questions can be easily attempted only from those five chapters those who read that five chapters would have attempted in MCQs and in descriptive put together easily uh 60 to 70 marks that's it fine anyhow okay I hope you have given your Just I'll see the comments now.