CA Intermediate — Interview Q&A
Q: What is the structure of CA Intermediate examination?
CA Intermediate has 6 papers divided into 2 groups:
Group I: Paper 1 (Advanced Accounting), Paper 2 (Corporate and Other Laws), Paper 3 (Taxation — Income Tax + GST)
Group II: Paper 4 (Cost and Management Accounting), Paper 5 (Auditing and Code of Ethics), Paper 6 (Financial Management + Strategic Management)
Can attempt Group I alone, Group II alone, or both together. Need 40%+ per paper and 50%+ aggregate per group to pass.
Q: What is IndAS and how does it differ from GAAP?
Indian Accounting Standards (Ind AS) converged with IFRS (International Financial Reporting Standards).
Key differences from old GAAP: Fair value measurement replaces historical cost in many cases, more disclosures required, substance over form principle, complex financial instruments treatment, consolidation and deconsolidation rules changed.
Mandatory for listed companies and large companies (paid-up capital ₹5 crore+).
Schedule III of Companies Act updated for Ind AS financial statements.
Q: Explain the concept of Deferred Tax (AS 22 / Ind AS 12).
Timing differences between accounting profit and taxable profit create deferred tax:
Balance sheet approach under Ind AS 12: temporary differences between carrying amount of asset/liability and its tax base.
Q: What is the Companies Act position on Related Party Transactions?
Section 188 of Companies Act 2013: Board approval required for RPTs exceeding prescribed thresholds; Shareholder resolution (ordinary resolution) for material RPTs by listed companies.
Section 177: Audit Committee must approve RPTs (including omnibus approval for recurring transactions).
Ind AS 24: Requires disclosure of all related parties and transactions even if at arm's length.
SEBI LODR (for listed): Material RPTs (>10% of annual consolidated turnover) need shareholder approval with related party abstaining.
Q: What is the difference between Statutory Audit and Internal Audit?
Statutory Audit: Mandatory audit under Companies Act by independent CA.
Reports on true and fair view of financial statements to shareholders.
Reports on: CARO (Companies Auditor's Report Order), ICFR (Internal Control over Financial Reporting).
Internal Audit: Management tool for risk management and operational efficiency — not mandatory for all but mandatory for listed companies and certain large companies.
Reports to management/Board.
Concurrent audit: Real-time audit (common in banks for large branches).