30+ CA Article Assistant Interview Questions and Answers

The limit by law in respect of mandatory Internal audit varies depending on the size and nature of the business.

• The Companies Act, 2013 in India mandates internal audit for certain classes of companies.

• For listed companies, the limit is set at a turnover of Rs. 50 crores or more in a financial year.

• For unlisted companies, the limit is set at a turnover of Rs. 200 crores or more in a financial year.

• Certain industries like banking, insurance, etc., have their own specific requi...read more

Internal auditor is required to report to the management and the audit committee.

• Internal auditor is responsible for evaluating the effectiveness of the organization's internal controls and risk management processes.

• The internal auditor reports to the management and the audit committee.

• The management is responsible for overseeing the day-to-day operations of the organization.

• The audit committee is responsible for overseeing the organization's financial reporting and internal ...read more

The due date for Non-audit case Individual returns is July 31st.

• The due date for filing Non-audit case Individual returns is July 31st of each year.

• This deadline applies to individuals who are not required to get their accounts audited.

• Non-audit case Individual returns include income tax returns filed by salaried individuals, freelancers, and small business owners.

• Late filing may attract penalties and interest charges.

I am interested in Internal Audit domain as it offers a challenging and dynamic work environment.

• I enjoy analyzing and identifying risks in business processes

• I have a keen eye for detail and enjoy problem-solving

• Internal audit provides exposure to various industries and business functions

• It offers opportunities for continuous learning and development

• Examples: identifying control weaknesses in financial reporting, assessing compliance with laws and regulations, evaluating oper...read more

Internal audit is a process of evaluating and improving the effectiveness of an organization's risk management, control, and governance processes.

• Planning the audit

• Gathering information and data

• Analyzing and evaluating the information

• Reporting the findings and recommendations

• Follow-up and monitoring

• Examples: financial audits, operational audits, compliance audits

Tax Audit is conducted to verify the accuracy of tax returns filed by the assessee. Statutory Audit is conducted to verify the financial statements of an entity.

• Tax Audit is conducted under the provisions of Income Tax Act, 1961.

• Statutory Audit is conducted under the provisions of Companies Act, 2013.

• Tax Audit is mandatory for certain taxpayers whose turnover exceeds a specified limit.

• Statutory Audit is mandatory for all companies registered under the Companies Act, 2013.

• Tax ...read more

Closing stock is recorded as an asset in the balance sheet through a journal entry.

• Closing stock account is debited

• Trading account is credited

• The value of closing stock is determined by physical stocktaking

• Closing stock is valued at cost or net realizable value, whichever is lower

Income tax rates vary based on income slabs and type of taxpayer.

• Income tax rates are different for individuals, HUFs, firms, companies, etc.

• For individuals, income tax rates range from 0% to 30% depending on income slabs.

• For FY 2020-21, individuals earning up to Rs. 2.5 lakh are exempt from income tax.

• For senior citizens (60-80 years), income up to Rs. 3 lakh is exempt from tax.

• For super senior citizens (above 80 years), income up to Rs. 5 lakh is exempt from tax.

• Corporate t...read more

Internal controls are procedures and policies implemented by an organization to ensure the reliability of financial reporting, compliance with laws and regulations, and effective and efficient operations.

• Internal controls are designed to safeguard assets, prevent and detect fraud, and ensure accuracy and completeness of financial records.

• Examples of internal controls include segregation of duties, access controls, physical controls, and independent checks and reconciliations....read more

Statutory audit is a legally required examination of a company's financial records to ensure accuracy and compliance.

• Statutory audit is conducted to verify the financial statements of a company.

• It is mandatory for certain types of companies as per the law.

• The audit is performed by an independent auditor who is a qualified chartered accountant.

• The objective is to express an opinion on whether the financial statements give a true and fair view of the company's financial positio...read more

Forms and Returns under Income Tax and GST Act

• Income Tax Act requires filing of returns using forms like ITR-1, ITR-2, etc.

• GST Act mandates filing of returns like GSTR-1, GSTR-3B, etc.

• Forms and returns need to be filed within specified due dates to avoid penalties.

• Correctly filling and submitting these forms is crucial for compliance with tax laws.

There are various types of audits and taxes that are important for a CA Article Assistant to know.

• Types of audits include statutory audit, tax audit, internal audit, concurrent audit, and management audit.

• Taxes include income tax, goods and services tax (GST), excise duty, customs duty, and value-added tax (VAT).

• Statutory audit is mandatory for all companies, while tax audit is required for businesses with a certain turnover.

• Knowledge of taxes is important for tax planning an...read more

CARO 2020 includes reporting requirements related to internal financial controls, statutory dues, and default in repayment of loans.

• Internal financial controls: Companies are required to report on the adequacy and operating effectiveness of internal financial controls.

• Statutory dues: Companies must report on the regularity of payment of statutory dues and the extent of arrears.

• Default in repayment of loans: Companies must disclose any defaults in repayment of loans or borrowi...read more

Accounting and Auditing definitions from CA Inter

• Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business.

• Auditing is the examination of financial statements to ensure they are accurate and comply with accounting standards.

• Accounting provides financial information for decision-making, while auditing provides assurance on the accuracy of that information.

• Examples: Accounting - preparing financial statements, Auditing - ...read more

Audit is a systematic examination of financial records, statements, and transactions of an organization.

• Audit is conducted to ensure the accuracy and reliability of financial information.

• It helps to identify any errors, frauds, or irregularities in financial statements.

• There are different types of audits such as internal audit, external audit, and forensic audit.

• Auditors use various techniques such as sampling, testing, and verification to conduct audits.

• Audit reports are pre...read more

TDS rates vary based on the type of payment and the recipient's status.

• TDS rates range from 0.75% to 30% depending on the payment type and recipient's status

• For example, TDS on salary payments is based on the employee's income tax slab rate

• TDS on rent payments is 10% if the annual rent exceeds Rs. 2.4 lakhs

• TDS on professional fees is 10% for individuals and 2% for companies

• TDS on interest income is 10% for individuals and 20% for non-individuals

Internal audit is an independent and objective assurance activity designed to add value and improve an organization's operations.

• It evaluates the effectiveness of risk management, control, and governance processes.

• It helps organizations accomplish their objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

• It provides insights and recommendations to management to improve the or...read more

GST rate on milk is 0% as it is considered a basic necessity.

• GST rate on milk is 0% as it falls under the exempted category.

• Milk, buttermilk, curd, and cream are exempt from GST.

• Processed milk products like cheese and butter attract GST at varying rates.

• GST rates on milk products may vary based on their processing and packaging.

Income Tax sections and explanation/interpretation

• Income Tax Act, 1961 is the main legislation governing income tax in India

• Sections like 80C, 80D, 10(14) provide deductions for investments, medical insurance, etc.

• Section 139 deals with filing of income tax returns

• Section 234A, 234B, 234C deal with interest on late payment of taxes

Current assets are assets that can be converted into cash within a year.

• Current assets are listed on the balance sheet and include cash, accounts receivable, inventory, and prepaid expenses.

• They are important for assessing a company's liquidity and ability to pay off short-term debts.

• Examples of current assets include cash in hand, short-term investments, accounts receivable, inventory, and prepaid expenses.

• Current assets are typically reported at their net realizable value, ...read more

AS 17 deals with segment reporting in financial statements.

• AS 17 requires companies to report financial information about their operating segments, which are components of the company that generate revenue and incur expenses.

• The standard defines how to identify and report operating segments, and requires disclosure of segment revenue, profit or loss, assets, liabilities, and other information.

• Segment reporting helps users of financial statements to better understand the perfo...read more

Verify purchases by checking invoices, receipts, purchase orders, and vendor statements.

• Compare invoices with purchase orders to ensure accuracy

• Check receipts for proper authorization and matching details

• Reconcile vendor statements with recorded purchases

• Verify prices, quantities, and terms of purchases

Risks in hiring process include making a poor cultural fit, hiring unqualified candidates, and potential legal issues.

• Poor cultural fit can lead to decreased morale and productivity

• Hiring unqualified candidates can result in poor performance and high turnover rates

• Potential legal issues such as discrimination or wrongful termination can lead to costly lawsuits

Sales can be verified by comparing sales records with bank statements, invoices, and delivery receipts.

• Compare sales records with bank statements to ensure all transactions are accounted for

• Match invoices with sales records to verify the accuracy of sales amounts

• Cross-reference delivery receipts with sales records to confirm that products were actually sold

• Perform periodic audits to detect any discrepancies or irregularities in sales data

The journal entry for closing stock is used to record the value of unsold goods at the end of an accounting period.

• Closing stock is an asset and is recorded on the debit side of the trading account.

• The corresponding credit entry is made to the closing stock account on the balance sheet.

• The value of closing stock is determined by either the cost price or the net realizable value, whichever is lower.

• If the closing stock is valued at cost price, the journal entry would be: Closi...read more

AS 19 deals with leases and their accounting treatment in financial statements.

• AS 19 provides guidelines for recognizing, measuring, presenting, and disclosing leases in financial statements.

• It distinguishes between finance leases and operating leases based on the risks and rewards associated with the leased asset.

• The accounting treatment for finance leases involves recognizing the leased asset and liability on the balance sheet, while operating leases are typically expensed ...read more

Industrial training provides practical exposure and hands-on experience in a real-world work environment.

• Industrial training helps in gaining practical knowledge and skills that are essential for a successful career.

• It allows students to apply theoretical knowledge in real-life situations.

• Industrial training enhances problem-solving abilities and decision-making skills.

• It provides an opportunity to network with professionals in the industry.

• Completing industrial training can ...read more

Schedule III format refers to the format prescribed for financial statements under the Companies Act, 2013.

• Schedule III format is applicable for the preparation of financial statements of companies in India.

• It provides a standardized structure and presentation for financial information.

• The format includes various sections such as balance sheet, profit and loss account, cash flow statement, and notes to accounts.

• It specifies the minimum requirements for the content and present...read more

TDS section refers to the various sections under the Income Tax Act that deal with Tax Deducted at Source.

• TDS sections specify the rates at which tax is to be deducted at source from various types of payments.

• Different TDS sections apply to different types of payments such as salary, interest, rent, etc.

• For example, Section 192 deals with TDS on salary, Section 194A deals with TDS on interest, and Section 194I deals with TDS on rent.

• Non-compliance with TDS sections can lead t...read more

Roles in O2C include order processing, credit management, billing, collections, and cash application.

• Order processing involves receiving and processing customer orders.

• Credit management involves assessing customer creditworthiness and setting credit limits.

• Billing involves generating and sending invoices to customers.

• Collections involves following up on overdue payments from customers.

• Cash application involves reconciling customer payments with invoices.

TDS refers to Tax Deducted at Source, which is a system where tax is deducted at the time of payment.

• TDS is governed by the Income Tax Act, 1961.

• It is applicable to various payments like salary, interest, commission, rent, etc.

• TDS rates vary depending on the nature of payment and the status of the recipient.

• TDS certificates like Form 16 and Form 16A are issued to the deductee.

• Non-compliance with TDS provisions can attract penalties.