Accountancy & Auditing, Paper II

What is meant by CAATs? Highlight benefits and procedures pertaining to usage of CAATs for financial statement audits of firms.

Identify differences between vouching and verification. What are the points to be considered by an auditor during verification?

What are the basic principles, which govern the auditor's professional responsibilities, and which should be complied with whenever an audit is carried out, as per AAS-1?

Discuss the legal provisions regarding exemption of following under Income Tax Ordinance 2001.

For the purposes of this question you should assume that today's date is 15 June 2018. Naseer is 63 years old and is resident in Pakistan. He files his tax returns regularly. During the tax year 2018, he earned the following income: (1) Salary income of Rs. 750,000 from his employment on a contract basis. From this amount, tax of Rs.14,500 was deducted at source. (2) Net income of Rs. 200,000 from a solitary trading transaction. (3) Gross dividend income of Rs. 450,000 from a company engaged in the production of sugar. Tax was deducted at source from this amount at the prescribed rate. In addition to the above, Naseer's son, who is a taxpayer in Pakistan, gave Naseer a cash gift of Rs. 400,000 through a prescribed banking channel. Required:

What are different forms of business entities? Highlight different features of a Corporation and its advantages over other organizational forms.

Carbide Chemical Company is considering the replacement of two old machines with a new, more efficient machine. It has determined that the relevant after-tax incremental operating cash flows of this replacement proposal are as follows: End of Year Cash Flow (Rs.) 0 -404,424 1 86,890 2 106,474 3 91,612 4 84,801 5 84,801 6 75,400 7 66,000 8 92,400 What is the project's net present value if the required rate of return is 14 percent? Is the project acceptable?