Infocrats Web Solutions Interview Questions and Answers

Emphasis on matter paragraph highlights significant matters in financial statements while key audit matter focuses on significant audit matters.

• Emphasis on matter paragraph is included in the auditor's report while key audit matter is a separate section.

• Emphasis on matter paragraph highlights significant matters in the financial statements such as going concern, related party transactions, and significant accounting policies.

• Key audit matter focuses on significant audit matte...read more

Contingent assets and liabilities are potential future events that may or may not occur.

• Contingent assets are potential assets that may arise from past events, but their existence is uncertain and depends on future events.

• Contingent liabilities are potential obligations that may arise from past events, but their existence is uncertain and depends on future events.

• Contingent assets and liabilities are disclosed in the financial statements as footnotes.

• Examples of contingent as...read more

Capital gains are calculated by subtracting the cost of acquisition from the sale price of an asset.

• Determine the sale price of the asset

• Determine the cost of acquisition of the asset

• Subtract the cost of acquisition from the sale price to get the capital gain

• Apply any applicable exemptions or deductions to arrive at the taxable capital gain

Provision is a liability that is uncertain in timing or amount, while reserve is a portion of profits set aside for a specific purpose.

• Provision is an estimated expense that a company sets aside in its accounts to cover a potential future liability.

• Reserve is a portion of profits that a company sets aside for a specific purpose, such as to fund future expansion or to pay dividends.

• Provision is recognized as an expense on the income statement, while reserve is shown as a separ...read more

The rate of income tax varies for different entities based on the provisions of the Companies Act and CARO 2020.

• Income tax rates for companies are different from those for individuals and other entities.

• Section 185 and 186 of the Companies Act provide guidelines for income tax rates for companies.

• CARO 2020 (Companies Auditor's Report Order) also impacts the income tax rates for companies.

• Auditors need to be aware of the specific income tax rates applicable to the entities the...read more

Audit methodology involves examining key financial line items, BRS is used for bank reconciliation, types of audit reports include unqualified, qualified, adverse, and disclaimer, external balance confirmations are used to verify account balances, Sch III refers to Schedule III of the Companies Act which outlines the format for financial statements.

• Audit methodology involves detailed examination of key financial line items such as revenue, expenses, assets, and liabilities.

• Ba...read more