M/S PQ & Co., Chartered Accountants have been appointed as statutory auditors of CBD Multiplex Cinema Ltd. The audit team started the audit and…
CA Intermediate · Auditing and Ethics · PYQS · May 2025
M/S PQ & Co., Chartered Accountants have been appointed as statutory auditors of CBD Multiplex Cinema Ltd. The audit team started the audit and verified the ledger and other books of accounts for the F.Y. 2024-2025. However, one of the team members is of the view that the internal control mechanism of the company should also be verified. Can you guide the audit team about the areas that will be covered in verifying the internal control mechanism? (5 Marks)
Suggested Answer and Working Notes:
Areas that will be covered in verifying the internal control mechanism of CBD Multiplex Cinema Ltd. are: (i) that entrance to the cinema-hall during show is only through printed tickets; (ii) that they are serially numbered and bound into books; (iii) that the number of tickets issued for each show and class, are different though the numbers of the same class for the show on the same day, each week, run serially; (iv) that for advance booking a separate series of tickets is issued; and (v) that the inventory of tickets is kept in the custody of a responsible official.
Topics: Special Features of Audit of Different type of Entities
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