FEDERAL PUBLIC SERVICE COMMISSION
COMPETITIVE EXAMINATION-2024
FOR RECRUITMENT TO POSTS IN BS-17
UNDER THE FEDERAL GOVERNMENT
ACCOUNTANCY AND AUDITING, PAPER-II
TIME ALLOWED: THREE HOURS
PART-I(MCQS): MAXIMUM 30 MINUTES
PART-I (MCQS) MAXIMUM MARKS = 20
PART-II MAXIMUM MARKS = 80
NOTE:
- (i) Part-II is to be attempted on the separate Answer Book.
- (ii) Attempt ONLY FOUR questions from PART-II, by selecting TWO questions from EACH SECTION. ALL questions carry EQUAL marks.
- (iii) All the parts (if any) of each Question must be attempted at one place instead of at different places.
- (iv) Write Q. No. in the Answer Book in accordance with Q. No. in the Q.Paper.
- (v) No Page/Space be left blank between the answers. All the blank pages of Answer Book must be crossed.
- (vi) Extra attempt of any question or any part of the question will not be considered.
PART-II
Q. No. 2.
SECTION-I (AUDITING)
Q. No. 2.
What is meant by CAATS? Highlight benefits and procedures pertaining to usage of CAATS for financial statement audits of firms. (20)
Q. No. 3.
Identify differences between vouching and verification. What are the points to be considered by an auditor during verification? (20)
Q. No. 4.
What are the basic principles, which govern the auditor’s professional responsibilities, and which should be complied with whenever an audit is carried out, as per AAS-1 (20)
SECTION-II (BUSINESS TAXATION)
Q. No. 5.
Discuss the legal provisions regarding exemption of following under Income Tax (5 each) (20)
Ordinance 2001.
(a) Pension
(b) Profit on debt
(c) Medical charges
(d) Agricultural Income
Q. No. 6.
For the purposes of this question you should assume that today’s date is 15 June 2018.
Naseer is 63 years old and is resident in Pakistan. He files his tax returns regularly. During the tax year 2018, he earned the following income:
(1) Salary income of Rs. 750,000 from his employment on a contract basis. From this amount, tax of Rs.14,500 was deducted at source.
(2) Net income of Rs. 200,000 from a solitary trading transaction.
(3) Gross dividend income of Rs. 450,000 from a company engaged in the production of sugar. Tax was deducted at source from this amount at the prescribed rate.
In addition to the above, Naseer’s son, who is a taxpayer in Pakistan, gave Naseer a cash gift of Rs. 400,000 through a prescribed banking channel.
Required:
(a) Compute Naseer’s tax liability for the tax year 2018, giving reasons for any reduction of tax liability on account of his age. (10)
(b) Explain, by giving reasons, why the gift received by Naseer from his son is not taxable. (10)
SECTION-III (BUSINESS STUDIES AND FINANCE)
Q. No. 7.
What are different forms of business entities? Highlight different features of a Corporation and its advantages over other organizational forms. (20)
Q. No. 8.
Carbide Chemical Company is considering the replacement of two old machines with a new, (20) more efficient machine. It has determined that the relevant after-tax incremental operating cash flows of this replacement proposal are as follows:
END OF YEAR
-Rs.404,424
MES
What is the project’s net present value if the required rate of return is 14 percent? Is the project acceptable?
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