Group 13: CARO & Company Audit

Correct answer D: No; the majority-qualified-partners condition is not met.

Section 141(1) requires majority of partners practising in India qualified;2/5 is not a majority. Signing eligibility is a separate requirement.

Correct answer C: The full-time-employment-elsewhere disqualification, with 141(4) vacation if incurred after appointment.

Section 141(3)(g) includes full-time employment elsewhere;141(4) addresses subsequent disqualification. No audit-count threshold is needed to decide this supplied fact.

Correct answer B: Ten years have not elapsed, so the stated conviction disqualification applies.

The Act specifies ten years since fraud-offence conviction; the supplied eight-year fact falls within it.

Correct answer D: No; partner/team rotation under 139(3) is distinct from firm rotation under 139(2).

The sections permit partner/team rotation but do not say it resets the firm permitted tenure.

Correct answer A: Until conclusion of the next AGM under the supplied casual-vacancy route.

Section 139(8)(i) gives tenure to next AGM for this route, distinct from ordinary 139(1) appointment.

Correct answer B: A reasonable opportunity of being heard before action.

Section 140(1) includes the hearing safeguard independently of previous approval/special resolution.

Correct answer A: The proper-books/adequate-returns statement under 143(3)(b), based on actual evidence.

Section 143(3)(b) includes adequate returns from unvisited branches. Evaluate missing information and reporting effects rather than invent receipt.

Correct answer B: No; the stated class exception matters, though other audit duties may still apply.

The specific inquiry expressly excludes investment and banking companies; this does not remove general evidence/accounting duties.

Correct answer D: Inquire whether the books/balance-sheet position is correct, regular and not misleading.

The clause asks actual cash receipt and, if absent, the stated accuracy/regularity/non-misleading assessment.

Correct answer C: The company and Registrar; do not add the government-company CAG recipient without that status.

Section 140(2) distinguishes company/Registrar filing from the additional CAG filing for 139(5) companies.

Correct answer D: Use the later amended applicability, keep the original-text date conflict visible, and do not claim the old appendix is consolidated current law.

Guidance 25 and the 17 December 2020 amendment announcement supportFY 2021-22 onwards; the reproduced original appendix is unamended on this date.

Correct answer B: The relationship condition, despite the three figures meeting their limits.

Order 1(2)(v) is conjunctive and excludes a holding or subsidiary of a public company from this route.

Correct answer C: Combined Rs 1.05 crore exceeds the Rs 1 crore capital/reserves limit, so this exemption fails.

Order 1(2)(v) combines paid-up capital and reserves/surplus at balance-sheet date;0.75+0.30=1.05.

Correct answer A: Maximum simultaneous aggregate Rs 0.9 crore, not Rs 1.5 crore from adding non-simultaneous separate peaks.

Guidance 22 tests aggregate outstanding at any point. Each supplied simultaneous sum is 0.9; do not combine balances never outstanding together.

Correct answer A: Add the paragraph numbers containing the relevant CARO qualifications/adverse remarks.

Order 3 (xxi) requires company details and CARO paragraph numbers; this is not only a financial-statement opinion list.

Correct answer A: Supported holder/relationship, gross carrying value, period held and reason including dispute where relevant.

Order 3 (i)(c) prescribed fields include these details; obtain supported facts, do not hide an identified holder.

Correct answer B: The 9 percent change does not meet the 10 percent amount-specification trigger, but the revaluation/valuer reporting question remains.

4.5/50=9 percent;3 (i)(d) still asks about revaluation and registered valuation, with the specified amount trigger distinct.

Correct answer C: Rs 5.25 crore aggregate sanctioned limits exceeds Rs 5 crore; lack of drawdown does not negate the trigger.

The clause uses aggregate sanctions at any time on current-asset security, not actual utilised borrowing;2.75+2.50=5.25.

Correct answer A: Use the PPE clause material-discrepancy wording; do not import the inventory numerical threshold.

Order 3 (i)(b) says material PPE verification discrepancies;3 (ii)(a) separately uses inventory class 10 percent-or-more.

Correct answer A: The 91 day amount meets more-than 90 days; exactly 90 does not meet that wording.

The clause says more than ninety days. Other repayment-regularity duties remain even for amounts not passing this age threshold.

Correct answer C: Rs 6 lakh and 20 percent of Rs 30 lakh, with the renewal/fresh-settlement description.

6/30=20 percent. The stated total granted is the supplied denominator; the exception for principally lending businesses is not supplied.

Correct answer C: Include the deemed-deposit compliance review despite the label.

Order 3 (v) includes deemed deposits and relevant directives/provisions/rules/orders; the legal status is supplied, not inferred from a name.

Correct answer D: No; report the relevant year-end outstanding age/extent, with actual later-payment context where appropriate.

Order 3 (vii)(a) refers to outstanding dues on the last day of the financial year for more than six months; later payment does not change that historical fact.

Correct answer B: Whether the previously unrecorded income was properly recorded, not merely whether any entry exists.

The clause asks proper recording during the year; evaluate the actual accounting and evidence.

Correct answer B: Report supported default facts; do not invent a wilful-defaulter declaration from default alone.

Clauses (ix)(a) and (ix)(b) are separate questions with different factual triggers.

Correct answer D: Report relevant misuse details, delays/default and subsequent rectification as applicable, not erase the misuse.

Order 3 (x)(a) expressly includes details together with delays/default and subsequent rectification as applicable.

Correct answer D: No; the clause asks defaults in interest/repayment for any period, with details.

The quoted Nidhi clause uses any period; do not import ageing tests from different clauses or claim full current Nidhi-law coverage.

Correct answer C: State the cash-loss amounts for both years rather than replace them with an average.

Clause (xvii) asks current and immediately preceding financial-year cash losses and their amounts; the given verified figures are separate.

Correct answer D: The clause concerns liabilities existing at balance-sheet date falling due within one year from that date, assessed as of report date.

Order 3 (xix) states the existing-liability and balance-sheet-date horizon; broader going-concern/evidence work is not removed.

Correct answer C: Six months from expiry of the financial year, not from signing.

Order 3 (xx)(a) states financial-year expiry and a Schedule VII fund; actual eligibility/rules and calendar deadline need separate verification.