Attempt all the questions

1. Distinguish between Internal Audit and Statutory Audit. Can the statutory auditor rely upon the internal audit in carrying out his functions as a statutory auditor? (20)

2. What do you understand by “outstanding assets” and “outstanding liabilities”? What are the duties of an auditor in relation to outstanding liabilities? (20)

3. What is the status of the auditor in a company? How can be protect the rights of the shareholders of the company? (20)

4. What do you understand by management audit? How does it help management in improvement of its effectiveness? (20)

5. Write short notes on the following :

(a) Errors of Commission

(b) Contingent Liabilities

(c) Divisible Profits

(d) Audit report (4X5)