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CA Final audit paper!! caro and schedule vi!!!

ds_82_2000 (56 Points)

05 November 2012

Today's Auditing Paper -

In CARO question, whether caro applicable to private ltd. company?

in Schedule VI question, whether provision for Proposed Divided required??

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30 Replies

S. AGGARWAL (STUDENT) (315 Points)
Replied 05 November 2012

caro not applicable.. And provision reqd

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Basant Jajoo (CA) (125 Points)
Replied 05 November 2012

i guess caro applicable as it becomes a foreign company in substance.. for revised schedule 6 no.provision required as it is charged on payment basis (exception to as4 as law supersedes as)... experts please confirm or correct the justifications

ankit sarda (Article Assistant) (24 Points)
Replied 05 November 2012

Provision required as per AS4 and if there is any conflict between AS and revised revised schedule VI As will prevail

Robin (AUDITOR) (854 Points)
Replied 05 November 2012

CARO IS APPLICABLE TO FOREIGN COMPANY AND ITS SUBSIDIRIES IN INDIA,

PROVISION IS REQUIRED AS CURRENT LIABILITIES. ONE SHOULD WRITE MEANING OF "CL" To justify the provision for proposed dividend.

CA Abhinav (Chartered Accountant) (496 Points)
Replied 05 November 2012

According to me, CARO is not applicable based on the assumption it doesn't me the criteria as stated in CARO 2003

Provision for dividend required as there is contradiction between AS & Revised schedule VI. Thus AS will overide the requirement of Schedule VI.

Those who are having Financial Reporting book of M P vijay kumar can confirm the P D provision on page no 959

Am reproducing text here.

"The following shall be disclosed separately:

a The amount of dividends for the period proposed to be distributed to equity and preference shareholders and the related amount per share
b Arrears of fixed cumulative dividends on perference shares
Therefore, schedule VI requires a mere disclosure of proposed dividend in the notes and doesn't require it to be treated as adjusting event (in the financial statements).

However, currently AS requires proposed dividend to be adjusted in the accounts and as Accounting standards override the requirement of schedule VI, proposed dividend should be treated as a provision, unless AS 4 is revised in this respect."

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Deepak Dargad (Chartered Accountant....) (9787 Points)
Replied 05 November 2012

I think today also easy one

srinath (ca final ) (73 Points)
Replied 05 November 2012

what is the answer for question 1 part 4 " revenue recognition.... nd btw caro not applicable.. since three conditions are satisified.. that is waht given in d question..

srinath (ca final ) (73 Points)
Replied 05 November 2012

what is the answer for question 1 part 4" revenue recognition... i have WRONGLY RETURN ON AS1 " ACRUAL BASIS OF ACCOUNTING"..

Joey Tribbiani (fdg) (2010 Points)
Replied 05 November 2012

was average paper today,if u r just watching the question and have not written the exam it will look easy.

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CA AAMIR (MANAGING DIRECTOR) (35 Points)
Replied 05 November 2012

I guess caro is applicabe since pvt co satisfies all conditions of caro..

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Deepak Dargad (Chartered Accountant....) (9787 Points)
Replied 05 November 2012

CARO applicable

and AS will prevail over Sch. VI, so provision required

sonal padia (accounts taxation audit) (21 Points)
Replied 05 November 2012

Whether spouses 'sister's' husband falls in the defination of relatives?

Deepak Dargad (Chartered Accountant....) (9787 Points)
Replied 05 November 2012

No, Not fall under definition of relatives

Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 05 November 2012

The definitino of relative is being changed in the CA Act. Accordingly the definitin of relative should be as per AS-18. So spouses sisters husband will be closely related to the auditor.