Auditing Corporate Governance solved MCQs

1 of 8

1. Auditing refers to

a. Examination of accounts of business units only

B. Preparation and checking of accounts

c. c)Examination of accounts by professional accountants

d. d)Checking of vouchers

2. Main object of auditing is

a. Detection of errors

B. To find out whether P&L a/c and B/S show true and fair state of affairs

c. Detection of frauds

d. Non of the above

3. Auditing is luxury for a

a. Joint stock company

B. Partnership firm

c. Small shop-keeper

d. Government company

4. Limitation of audit is

a. That it does not reveal complete picture

B. That it does not guarantee accuracy of accounts

c. That auditor may be biased

d. All of the above

5. Internal Audit is undertaken

a. By independent auditor

B. Statutorily appointed auditor

c. By a person appointed by the management

d. By a Government auditor

6. Final audit implies

a. Audit of accounts at the end of the year

B. Finally checking of accounts to reveal frauds

c. audit for submitting report immediately at the end of year

d. audit of banking companies

7. Institute of Chartered Accountants of India was established on

a. 1 st April,1956

B. 1 stApril, 1949

c. 1 st July,1956

d. 1 st July,1949

8. Joint audit implies

a. Audit of two concerns together

B. Audit of joint stock companies

c. Audit of joint sector companies

d. Audit of two firms of C.A.

9. The term auditing was associated with

a. Hearing of accounts

B. Hearing of system

c. Hearing of report

d. None of the above

10. The scope of auditing is

a. Narrow

B. Wide

c. Long

d. Short

11. The arrangement of duties of staff in such a manner, that the work of one person is automatically checked by another during the course of carrying out, recording and processing a transaction.

a. Internal check

B. Internal audit

c. Vouching

d. Internal control

12. The object of internal audit is

a. To detect frauds and errors

B. To prevent frauds and errors

c. Both (a) and (b)

d. Neither (a) nor (b)

13. The process of inspecting a document that supports a recorded transaction in order to verify the authority and authenticity of such a transaction

a. Auditing

B. Audit planning

c. Vouching

d. Internal check

14. Which of the following is not the procedure for vouching of cash sales:

a. Examine cash book

B. Examine cash memos

c. Examine the counterfoil of pay in slops

d. Examine balance sheet

15. Who is responsible for the verification of assets?

a. Auditor

B. Management

c. Director

d. None of the above

16. Which of the following object is not included while verifying the liabilities by the auditor?

a. Existence

B. Obligation

c. Completeness

d. All of the above

17. The work of one clerk is automatically check by another clerk is called

a. Internal control.

B. Internal check.

c. Internal audit.

d. None of the above.

18. Which of the following is not a kind of audit?

a. Statutory and private audit.

B. Government and continuous audit.

c. Continuous, final, Interim, Cash, Cost and Management audit.

d. None of these.

19. The audit that is made compulsory under statute is called _________.

a. Statutory audit.

B. Partial audit.

c. Complete audit.

d. Continuous audit.

20. This kind of audit is conducted generally between two annual audit ______.

a. Internal audit.

B. Interim audit.

c. Final audit.

d. Continuous audit.

21. Voucher relates to _________.

a. Cash receipt.

B. Cash payment.

c. Credit transactions.

d. All the above.

22. To verify cash transactions, it is necessary

a. System of internal control

B. Check all transaction

c. Documentary evidence for every transaction

d. All of the above.

23. In case of sales return, the auditor should check.

a. Credit notes and delivery challans.

B. Whether cash has been repaid to the client

c. Purchase invoices and goods received notes.

d. Credit notes and goods received notes.

24. Which of the following is an importance of vouching?

a. Ensures all items are disclosed in the financial statement as per Schedule VI provisions

B. It helps to verify whether entries are passed as per acceptable accounting principles.

c. Helps in detection and prevention of errors & frauds

d. All the above

25. The elements of auditing includes –

a. Systematic and independent examination

B. Stated purpose

c. Collects and evaluates the evidence

d. All of the above

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