dre Yar ert Fore ay te, TEER, Sarfdarater, ake yea, wars Freer weer sftentrereres fesftrcr wee ROWAN wa 5 wr gee gig + 900 fry : Accounting and Auditing Gale Section # GX GEIge SaRgRawrn Sey | sewer Saga T GAT | Section ‘A’ 60 Marks 4. TRP Ltd. began construction of a new plant on 1% of Shrawan 2075 and obtained a specific loan of Rs. 400,000 to finance the construction of that plant. The rate of interest ‘on loan was 10%. The expenditure made on the project are as follows: 1 Shrawan 2075 Rs, 500,000 1° Magshir 2075 Rs, 1,200,000 1" Balsakh 2076 Rs, 200,000 ‘The company's other outstanding nonspecific loan was Rs. 2,300,000 at the interest rate of 12%. Calculate the amount of interest to be capitalized as per NAS-23 Borrowing costs. = 5 2. Explain with examples the two post-employment benefit schemes defined by NAS 19: "employee Benefits’. How should the following items on account of actual valuation of gratuity be treated in financial statements ? 5 A) Current Service Cost B) Actuarial Gain/Loss ©) Interest Cost 3, Distinguish the recognition of characteristics of Joint operations and Joint ventures under NERS II Joint Arrangements. 5 4, Present a brief summary of IFRIC 22 Foreign Currency Transactions and Advance Consideration. 5 5. One of the issues covered by NFRS 9 Financial Instruments is the classification and measurement of financial assets. The three possible measurement bases identified by the standard are: > Amortised cost, > Fairvalue through other comprehensive income. > Fair value through profit or loss. Explain how NFRS 9 requires entities to select the appropriate measurement basis for a financial asset. You should include any options available to entities regarding dlaecificatinn in vour exolanation, 5eres, Sentara, atop a, ware Pew - 2 6. A company has invested in 5 year bond of another company with face value of Rs. 1,000,000 by paying Rs. 500,000. The effective interest rate is 15%. The firm recognizes proportionate interest income in its income statement throughout the period of bond, Based on this information, answer the following: 5 i) How interest income will be treated in cash flows ? ii) On maturity, whether the receipt of Rs. 1,000,000 should be split between interest, income & receipts from investment activity ? 7. Following are the summarized Balance Sheet of Company Alpha Ltd. and Beta Ltd., as at Ashad 31, 2076. “Alpha Ltd. Liabilities r Loerge emacs _ Equity Shares of NRs. 10% Preference Shares ie of NRs, 100 Each General Reserve | 24 "680,000 186,000 { | Own Debenture 200,000 | (Nominal Values of NRs. 200,000) "Discount on issue of Debentures | | 100 Each 315,000 a ere ae On Shrawan 176, Alpha Ltd. adopted the following scheme of reconstruction: A) Each equity share shall be sub-divided into 10 equity share of Rs. 10 each fully paid up. 50% of the equity share capital would be surrendered to the company. 8) Preference dividend are in arrears for 3 years, Preference shareholders agreed to waive 80% of the dividend claim and accept payment for the balance. C) Own debenture of Rs. 80,000/- (Nominal Value) were sold at NRs. 98 cum interest and remaining own debentures were cancelled. D) Debentures holders of Rs. 300,000/- agreed to accept one machinery of book value of Rs, 320,000/- in full settlement. £) Trade payables, Trade receivables and Inventory were valued at Rs. 500,000/-, Rs, 600,000/- and Rs. 400,000/- respectively. F): The company paid Rs. 20,000/- as penalty to avoid capital commitment of Ps.rarer, Senfsaratir, atopy peta, were Pree -3 on Shrawan 02, 2076, a scheme of absorption was adopted. Alpha Ltd. would take over Beta Ltd. The purchase consideration was fixed as below: AA) Equity shareholders of Beta Ltd. will be given 50 equity shares of Rs. 10 each fully paid up, in exchange for every 5 shares held in Beta Ltd. 8) Issue of preference shares of NRs. 10 each in the ratio of 4 preference shares of Alpha Ltd. for every 5 preference shares held in Beta Ltd. C) Issue of 12% debentures of Rs. 100 each of Alpha Ltd. for every 12% debentures in Beta Ltd. Prepare statement of financial position as at Shrawan 02, 2076. 10 (Make suitable assumptions required, if any.) 8. Explain how the recognition & measurement of subsequent events is done as per NAS 10. As an auditor, how would you deal with material non adjusting event identified after Balance Sheet date that would affect going concern assumptions of the entity ? Explain with suitable example by referring provisions of NSA 570 "Going Concern" as well. 10+10=20 Section ‘8’ 40 Marks 6. According to Guidance notes on Nepal Standards on Quality Control, what are the procedures to follow to evaluate managements integrity and the risk associated with providing professional services in particular circumstances while accepting and/or continuing the client relationship ? State. 5 10.Briefly explain the term ‘Modified Opinion’. Provide a situation where auditor should issue disclaimer of audit opinion. 5 11."There is a direct relationship between Audit risk and Detection Risk". Comment with reference to relevant standards on auditing, 5 412. What are the risks and issues in securities underwriting that have audit implications as per Nepal Auditing Practice Statements (NAPS 101) ? 5 413, What is the main requirements under ISA 701. communicating key audit matter in the independent auditor's report ? 5 414, State the reporting responsibility of an auditor in the context of non-compliance of Law and Regulation in an audit of Financial Statements stating the Nepal Standard on Auditing. 5 15, What steps should be taken by auditor if management refuses to provide representation considered necessary by him ? 5 46, What are the preconditions for an audit ? Explain in light of NSA 210. “Agreeing upon terms of Engagement.” 5ote tar ar Fare ws te, TE, Sareea, aap Tt, werre Frees vest ‘festa weet fechas 2oWKI99193, va: fhe wre: y eer ig : 90 fasz : Financial Laws sete Ursah oo Beg oeeyftr BegE | ara sme & FT | ws a Yo ay & Fore mg te te, oye agER Ae orl Yer WOR waIET Wem AEG ere veda mele | % 2 Rivonia woftrat derr e wad oh wd fit seemed eer wiroclen prea ty cen feet Bar sae RIGA wafda Be cen Pee deer Weel) bo 2003 wit wHreert wat w ? ders wey | 4 z Re cer feta cemetary argv tH, oye arena AY Port ted sohere sae re Tg Yar orys Sa or ae cA ee ong SUR TET th te ogeE > wed WaT Se STE wt a BRS ? sabe TERT | 4 %, ARE AR wer Wott tH, ogy woos we aes orER TI wal fou a Reet egy mere 2 cet wa TET OS wR Wola gO ? ere UE | 90 wesw 30 ay 4 mare Ys weet uae ff Goh whe Meher A sede mee | s % BRIM Yea (Corporate Governance) RPT Tey wa tae ME dad a Rel Peete wreenterer arta eer art Oey | 4 ® Reh APE ota wh Foro wet fer cen Ate eer cen ama remeng oni ame unos wife Ree wad Tare Vet gar aoe ArsEy wahoo ser Sen ers YT Tey wea Ter oT erToTGe aM MRETETET | 5 s. 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TFT mY (Merger and Acquisition) wet & A ? Aree Petr doen ares ara 1h stewed w, 84 ? oroafea cede ayeNT | & % WMT Ye (Corporate Governance) wi Rarteeel ae weRT wey | sree ty aan waa fran ser a fer wre wi a wet writ sae ude ? Ber mga wyery | & 3% Garitoaiswe Due Diligence Audit TYR TRIES Ter TE Due Diligence Audit ¥ frie cernterrtaer wpa Present vere orfere | & . dp cer fasta der Operational Risk froin Fi wae aeewet aren ditt ar RT| & x onftias gf (Economic Growth) wre fer AH (Fiscal Policy) * wee sewer whe ? verewreted wht Tey | & » Credit Risk Ter @ 8 ? BAe wire ort fait aeaew (Factors) weds wey | & Insider Trading wet @ @ ? wet oreo fracafta wh Agee water ore @ aah eae w ? wre agent | & s, Taree Pte aa erat write feeet ee (Approach) ak wareteaere fecuil < agery | § s. Aare shoake fata Varswet vgaet ame (Accesses to Formal Financial Services) ¥ wraal fearan yitdtewar wat were | & 40. BASEL Framework @ oRtaa feger | Tear Mfrs yrtterrn seat wera ert freer ayeRy | &were, Sen/sernder, oegr yeh, wera fren - 2 we we 20 oy "A. Leasing Finance #1 WgU tagaew vee TYeRy | 8 8. Sei Ween eee (Capital Structure Management) #1 aTeef 1 & Bae (Optimal Debt and Equity) fear wah ggud ? anoraitr wesw wey | ¥ 48 Define Portfolio Management . How is the beta-coefficient calculated ? 4 4. 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