8. M/s ABC & Associates are the statutory auditors of PQR Ltd. for the FY2019-20. While conducting the audit, CA Aman, the engagement partner noticed the following:

  • Payments of various fines and penalties 
  • Unusual cash payments
  • Payments to various government employees not supported by any document
  • Notices received from various regulatory authorities.
  • Heavy payments to legal counsels.

CA Aman should consider the above as indicative of:

(a)Doubt on Internal Controls of PQR Ltd.

(b)Doubt of non compliance to laws by PQR Ltd.

(c)Doubt on the accounting system of PQR Ltd.

(d)Doubt on the going concern assumption of PQR Ltd.


















Ans: (b)Doubt of non compliance to laws by PQR Ltd.