CA Inter P5 · Chapter 9 · Question 6 of 12
Which of the following is a typical feature of the audit of a local body such as a municipal corporation?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Checking that expenditure is within the budget sanctioned and incurred in accordance with the applicable Act, rules and bye-laws
Explanation
Local bodies operate under statutes and budgets approved by their councils. Their audit typically checks budgetary control, sanctions, compliance with the governing Act and rules, collection of revenues such as taxes and fees, and proper use of grants. Profit, return on equity and dividends are not relevant objectives for such bodies.
More Special Features of Audit of Different Type of Entities MCQs
- Q8A distinctive feature of the audit of co-operative societies under many State Co-operative Societies Acts is that the auditor:
- Q9In the audit of a co-operative credit society, the auditor finds loans given to members in excess of the limits in the society's bye-laws…
- Q10Under the Limited Liability Partnership Act, 2008 and the rules made under it, which of the following persons would NOT be eligible for…
- Q11In the audit of a partnership firm, the document the auditor should study first to understand the rights and obligations of partners, such…
- Q12During the audit of a government department, the auditor finds that a purchase was sanctioned by an officer whose delegated financial…