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CSS Accountancy and Auditing Paper II Past Paper 2022

CSS Accountancy and Auditing Paper II 2022 carries 100 marks over 3 hours. It has 7 questions.

Marks
100
Time
3 hours
Questions
7

Years

How to attempt: Attempt ONLY FOUR questions from PART-II by selecting at least ONE question from EACH SECTION. ALL questions carry EQUAL marks.

Questions

Question 1 (Part I) is the paper's MCQs, which are not reproduced here.

SECTION-I (AUDITING)

  1. Q. 2
    Define audit planning. What factors should be considered by an auditor in developing an audit plan.
    (20)
  2. Q. 3
    (20)
    • (a)
      Define an audit program. Give its advantages and disadvantages.
      (10)
    • (b)
      What are the purposes/benefits of conducting audit through a fixed audit program?
      (10)
  3. Q. 4
    (20)
    • (a)
      Define ‘Fraud’ as applied to accounting. What are different types of frauds?
      (10)
    • (b)
      How will you detect and prevent the frauds related with embezzlement of cash?
      (10)

SECTION-II (BUSINESS TAXATION)

  1. Q. 5
    ABC is a private limited company. The company manufactures and supplies consumer goods. ABC sells its product through various distributors in Karachi, Lahore and Islamabad. The following is the profit and loss account of ABC for the year ended on June 30, 2021:
    (20)
    Rs.”000”Rs.”000”
    Sundry expenses2,240Gross Profit235,200
    Office salaries29,120Interest on bank deposit300
    Rent, rates & taxes8,960Recovered bad debts (Allowed in the past)448
    Legal charges2,016Dividend672
    Finance charges on leased assets350
    Advertisement5,600
    Auditor's fees6,720
    Cost of issue of debentures5,600
    Loss on sales of furniture2,240
    Provident fund contribution7,840
    Bad debts4,480
    Vehicle expenses8,960
    Fire insurance premium7,840
    Preliminary expenses1,008
    Provision for taxes10,080
    Provision for bad debts4,480
    Liquidated damages3,360
    Depreciation44,800
    Net Profit80,926
    Total236,620Total236,620

    Additional Information:

    • (a)
      Sundry expenses include donation of Rs. 502,000 paid to an unrecognized charitable institution.
    • (b)
      Office salaries include Rs.6,000,000 paid to one of the directors.
    • (c)
      Provident Fund is recognized by the Income Tax Department.
    • (d)
      Vehicle expenses are not vouched and verifiable to the extent of Rs.1,881,000.
    • (e)
      Actual depreciation works out to Rs.32,650,000 only.
    • (f)
      Lease rental for the year are Rs.1,750,000.

    Required: Calculate the taxable income and tax liability of the company for the tax year 2021 from the above data.

  2. Q. 6
    Discuss ten allowable deductions under the head of “income from business” under section 20 of Income Tax Ordinance 2001.
    (20)

SECTION-III (BUSINESS STUDIES AND FINANCE)

  1. Q. 7
    (20)
    • (a)
      What is the purpose of financial markets? How can this purpose be accomplished efficiently?
      (10)
    • (b)
      Discuss the functions of financial intermediaries.
      (10)
  2. Q. 8
    Why do bonds with long maturities fluctuate more in price than do bonds with short maturities, given the same change in yield to maturity?
    (20)
  1. Part-II is to be attempted on the separate Answer Book.
  2. Attempt ONLY FOUR questions from PART-II by selecting at least ONE question from EACH SECTION. ALL questions carry EQUAL marks.
  3. All the parts (if any) of each Question must be attempted at one place instead of at different places.
  4. Write Q. No. in the Answer Book in accordance with Q. No. in the Q.Paper.
  5. No Page/Space be left blank between the answers. All the blank pages of Answer Book must be crossed.
  6. Extra attempt of any question or any part of the question will not be considered.
  7. Use of Calculator is allowed.