McqMate
| 1. |
Auditing refers to |
| A. | Examination of accounts of business units only |
| B. | Preparation and checking of accounts |
| C. | Examination of accounts by professional accountants |
| D. | Checking of vouchers |
| Answer» A. Examination of accounts of business units only | |
| 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 |
| Answer» B. To find out whether P&L a/c and B/S show true and fair state of affairs | |
| 3. |
Auditing is luxury for a |
| A. | Joint stock company |
| B. | Partnership firm |
| C. | Small shop-keeper |
| D. | Government company |
| Answer» C. Small shop-keeper | |
| 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 |
| Answer» 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 |
| Answer» C. By a person appointed by the management | |
| 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 |
| Answer» A. Audit of accounts at the end of the year | |
| 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 |
| Answer» 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. |
| Answer» 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 |
| Answer» A. Hearing of accounts | |
| 10. |
The scope of auditing is |
| A. | Narrow |
| B. | Wide |
| C. | Long |
| D. | Short |
| Answer» B. Wide | |
| 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 |
| Answer» A. Internal check | |
| 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) |
| Answer» A. To detect frauds and errors | |
| 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 |
| Answer» C. Vouching | |
| 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 |
| Answer» D. Examine balance sheet | |
| 15. |
Who is responsible for the verification of assets? |
| A. | Auditor |
| B. | Management |
| C. | Director |
| D. | None of the above |
| Answer» A. Auditor | |
| 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 |
| Answer» 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. |
| Answer» B. Internal check. | |
| 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. |
| Answer» 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. |
| Answer» A. Statutory 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. |
| Answer» B. Interim audit. | |
| 21. |
Voucher relates to _________. |
| A. | Cash receipt. |
| B. | Cash payment. |
| C. | Credit transactions. |
| D. | All the above. |
| Answer» 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. |
| Answer» 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. |
| Answer» 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 |
| Answer» 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 |
| Answer» D. All of the above | |
| 26. |
Interim Audit refers to an audit conducted |
| A. | In between two different accounting years |
| B. | In between two annual audits |
| C. | In between one statutory audit, one management audit and one internal audit |
| D. | None of the above |
| Answer» B. In between two annual audits | |
| 27. |
Errors occurring when generally accepted accounting principles are not observed while recording any transaction in the books of accounts |
| A. | Clerical errors |
| B. | Compensating errors |
| C. | Errors of principle |
| D. | Errors of duplication |
| Answer» C. Errors of principle | |
| 28. |
Before the work of audit is commenced, the auditor prepares a written procedure needed to implement the audit work |
| A. | Audit plan |
| B. | Audit note |
| C. | Audit programme |
| D. | Audit risk |
| Answer» C. Audit programme | |
| 29. |
The work of one clerk automatically checked by another clerk is called |
| A. | Internal control |
| B. | Internal check |
| C. | Internal audit |
| D. | None of the above |
| Answer» B. Internal check | |
| 30. |
Section 138 of the Companies Act, 2013 made internal audit compulsory for |
| A. | Every listed company |
| B. | Every unlisted public company having paid-up share capital of 50 crores or more during the preceding financial year |
| C. | Both (a) & (b) |
| D. | Neither (a) nor (b) |
| Answer» C. Both (a) & (b) | |
| 31. |
“The process of inspecting documents that supports a recorded transaction in order to verify the authority and authenticity of such a transaction” is |
| A. | Vouching |
| B. | Verification |
| C. | Internal Check |
| D. | Internal Control |
| Answer» A. Vouching | |
| 32. |
The process of substantiation of assets and liabilities recorded in the books of accounts by physical inspection and examination of legal and official documents to form and expert opinion |
| A. | Vouching |
| B. | Voucher |
| C. | Verification |
| D. | Audit notebook |
| Answer» C. Verification | |
| 33. |
The term „Audit‟ is derived from the Latin word “Audire” which means |
| A. | To listen |
| B. | To hear |
| C. | To know |
| D. | To audit. |
| Answer» B. To hear | |
| 34. |
A systematic and independent examination of data ,statements,records,operations,and performance(financial or otherwise) for a stated purpose. In any auditing situation,the auditor perceives and recognizes the propositions before him for examination,collects evidence,evaluates the same and on the basis formulates his judgement which is,communicated through his audit report.” This definition is given by |
| A. | Joseph Lancaster |
| B. | Taylor and Perry |
| C. | ICAI |
| D. | ICAE. |
| Answer» C. ICAI | |
| 35. |
An error occurs due to negligence in recording the details of transaction, such errors are of clerical nature and are of wrong entries,wrong positioning,additions,transfer,etc.. is called |
| A. | Errors of Commission |
| B. | Errors of Omission |
| C. | Errors of principle |
| D. | Compensating Errors. |
| Answer» A. Errors of Commission | |
| 36. |
The primary objective of auditing is to |
| A. | To examine the reliability and validity of financial statements. |
| B. | To detect errors |
| C. | To detect frauds |
| D. | None of the above. |
| Answer» A. To examine the reliability and validity of financial statements. | |
| 37. |
Audits should be based on the six principles,according to |
| A. | ISO 19001:2011 |
| B. | ISO 19011:2011 |
| C. | ISO 19111:2011 |
| D. | ISO 19000:2011 |
| Answer» A. ISO 19001:2011 | |
| 38. |
Under technique of Auditing,Documents which have their origin in the hands of the third party and held by them is |
| A. | Reliable |
| B. | More reliable |
| C. | Reliable only if the internal control is effective. |
| D. | Most reliable evidence. |
| Answer» D. Most reliable evidence. | |
| 39. |
Audit of partnership firm is under |
| A. | Audit of other organizations covered by any law |
| B. | Audit required under law |
| C. | Audit of other organizations not covered by any law |
| D. | None of the above. |
| Answer» C. Audit of other organizations not covered by any law | |
| 40. |
The external auditor are usually appointed by |
| A. | The owners only |
| B. | The government |
| C. | The management and the government |
| D. | The owners and in some cases by the government. |
| Answer» D. The owners and in some cases by the government. | |
| 41. |
The first auditor of company will hold office |
| A. | For a period of one year |
| B. | Till holding of statutory meeting |
| C. | Till the conclusion of first annual general meeting |
| D. | Till a new audtor is appointed |
| Answer» C. Till the conclusion of first annual general meeting | |
| 42. |
Remuneration of a company auditor is fixed by the |
| A. | Shareholders |
| B. | Board of Directors |
| C. | Central Government |
| D. | Appointing authority |
| Answer» D. Appointing authority | |
| 43. |
A company auditor in general has to submit his report to |
| A. | Shareholders |
| B. | Central Government |
| C. | C&A-G |
| D. | Board of Directors |
| Answer» A. Shareholders | |
| 44. |
Auditor should be dutiful like |
| A. | A watch dog |
| B. | a blood hound |
| C. | A detective |
| D. | An insurer |
| Answer» A. A watch dog | |
| 45. |
Internal auditor has to submit report to |
| A. | Shareholders |
| B. | Government |
| C. | Company Law Board |
| D. | None of the above |
| Answer» D. None of the above | |
| 46. |
An auditor is liable held criminally liable for |
| A. | Loss to his client |
| B. | Neglect of his duty |
| C. | Offences against statutory provision |
| D. | None of the above |
| Answer» C. Offences against statutory provision | |
| 47. |
A vacancy caused by resignation of the auditor is filled only |
| A. | By Board of Directors |
| B. | At the general meeting of shareholders |
| C. | By the Central Government |
| D. | By the Company Law Board |
| Answer» B. At the general meeting of shareholders | |
| 48. |
Civil liability of an auditor implies liability for |
| A. | Misappropriation of cash |
| B. | Misappropriation of goods |
| C. | Fraud |
| D. | Misfeasance |
| Answer» D. Misfeasance | |
| 49. |
___________of the Companies act 2013 lays down provisions regarding the eligibility of appointment of an auditor. |
| A. | Sec 141 |
| B. | Sec 142 |
| C. | Sec 143 |
| D. | Sec 144 |
| Answer» A. Sec 141 | |
| 50. |
Which of the following is not types of auditor |
| A. | First auditor |
| B. | Subsequent auditor |
| C. | Casual vacancy |
| D. | Last auditor |
| Answer» D. Last auditor | |
| 51. |
In case of first auditor appointed by the board of directors, who would fix remuneration |
| A. | Board of directors |
| B. | Shareholders |
| C. | Debenture holders |
| D. | Creditors |
| Answer» A. Board of directors | |
| 52. |
The tenure of first auditor shall be from the date of appointment till |
| A. | The conclusion of first annual general meeting |
| B. | The beginning of first annual general meeting |
| C. | The conclusion of the second annual general meeting |
| D. | The conclusion of special meeting |
| Answer» A. The conclusion of first annual general meeting | |
| 53. |
Forming an opinion on the financial statements the auditor‟s report shall be in |
| A. | Writing |
| B. | Verbal |
| C. | Instruction to assistant |
| D. | None of the above |
| Answer» A. Writing | |
| 54. |
Which of the following is an element of the Audit Report |
| A. | Title& addressee |
| B. | Introductory, scope and opinion paragraph |
| C. | Date, place and auditors signature |
| D. | All of the above |
| Answer» D. All of the above | |
| 55. |
The auditor who authorized the issue of misstatements in prospectus can be imprisoned for a term which may extend to |
| A. | 5 years |
| B. | 7 years |
| C. | 8 years |
| D. | 10 years |
| Answer» D. 10 years | |
| 56. |
Which of the following is not the types of audit report based on the kind of opinion |
| A. | Unmodified opinion report |
| B. | Audit report with an emphasis of matter paragraph |
| C. | Modified report |
| D. | None |
| Answer» D. None | |
| 57. |
In case the Board of Directors fails to appoint first auditors, the shareholders shall appoint them at _______ by passing a resolution. |
| A. | Extraordinary general meeting. |
| B. | First annual general meeting. |
| C. | Statutory meeting. |
| D. | Annual general meeting |
| Answer» A. Extraordinary general meeting. | |
| 58. |
Which of the following statement is not correct regarding removal of first auditor before expiry of the term? |
| A. | He is removed at a general meeting. |
| B. | The approval of the central government is required for such removal. |
| C. | The provision for removal are contained in sec 140(1) of Companies Act, 2013 |
| D. | The shareholders are authorized to do so |
| Answer» B. The approval of the central government is required for such removal. | |
| 59. |
The board of directors shall appoint first auditor of a company ___________. |
| A. | Within one month of completion of capital subscription state of the company |
| B. | Within one month of the promotion of the company. |
| C. | Within one month of the commencement of the business of the company. |
| D. | Within one month of incorporation of the company. |
| Answer» D. Within one month of incorporation of the company. | |
| 60. |
The first auditor of a government company shall be appointed within 60 days from the date of registration of the company by. |
| A. | The government company itself. |
| B. | The Comptroller and Auditor General of India |
| C. | The central government. |
| D. | The shareholders. |
| Answer» B. The Comptroller and Auditor General of India | |
| 61. |
The liabilities of an auditor can be _________. |
| A. | Civil |
| B. | Criminal |
| C. | Civil and Criminal. |
| D. | Official |
| Answer» C. Civil and Criminal. | |
| 62. |
Which of the following statement is not correct regarding basic features/ elements/ form of an Audit Report |
| A. | Title, Addressee and opening paragraph |
| B. | Management‟s responsibility and auditor‟s responsibility |
| C. | Opinion paragraph, date, address, signature of the auditor |
| D. | None of these |
| Answer» D. None of these | |
| 63. |
is issued when the auditor is completely satisfied that there is nothing objectionable |
| A. | Standard Unqualified Report or Clean Report |
| B. | Qualified opinion |
| C. | Disclaimer of opinion |
| D. | Adverse opinion |
| Answer» A. Standard Unqualified Report or Clean Report | |
| 64. |
A casual vacancy in the office of an auditor shall be filled by. |
| A. | Board of Directors. |
| B. | Managing Director. |
| C. | General meeting. |
| D. | Central Government. |
| Answer» A. Board of Directors. | |
| 65. |
Who among the following cannot be appointed as auditor of a company? |
| A. | A person who is a Chartered Accountant within the meaning of CA Act, 1949 and holds a certificate of practice. |
| B. | Officer or employee of the company |
| C. | A Chartered Accountant who is an auditor of more than 20 companies |
| D. | Both (b) & (c) |
| Answer» D. Both (b) & (c) | |
| 66. |
First auditor of a company shall be appointed by the Board of Directors within |
| A. | 30 days |
| B. | 40 days |
| C. | 45 days |
| D. | 60 days |
| Answer» A. 30 days | |
| 67. |
Removal of auditor that requires special resolution and previous approval of the Central Government |
| A. | Resignation of Auditor |
| B. | Retirement of Auditor |
| C. | Removal of Auditor before expiry of term |
| D. | Removal of Auditor after expiry of term |
| Answer» C. Removal of Auditor before expiry of term | |
| 68. |
The section which contains provisions regarding remuneration of the auditor is |
| A. | Section 140(1) |
| B. | Section 142 |
| C. | Section 139 |
| D. | Section 141 |
| Answer» B. Section 142 | |
| 69. |
The principal rights conferred upon the auditor by the Companies Act, 2013 |
| A. | Right to sign audit reports |
| B. | Right to get his representation circulated |
| C. | Right to speak as a member of the company |
| D. | Right to make a written representation |
| Answer» A. Right to sign audit reports | |
| 70. |
The matters on which an auditor has a duty to report under Section 143 (3)can broadly divided into two categories, namely |
| A. | Statement of fact and opinion |
| B. | Accounts examined and every financial statement during his tenure |
| C. | Both (a) & (b) |
| D. | Only (b) |
| Answer» A. Statement of fact and opinion | |
| 71. |
Report issued when the auditor on the basis of sufficient appropriate audit evidence, concludes that misstatements are both material and pervasive to the financial statement |
| A. | Unqualified report |
| B. | Disclaimer of opinion report |
| C. | Qualified report |
| D. | Adverse report |
| Answer» D. Adverse report | |
| 72. |
The sections of the Act under which an auditor ac be held criminally liable are |
| A. | Section 34 |
| B. | Section 147 |
| C. | Section 448 |
| D. | All of the above |
| Answer» D. All of the above | |
| 73. |
An arrangement of accounting routine that errors and frauds are automatically prevented or discovered by the very operation of bookkeeping itself is called |
| A. | Internal control |
| B. | Internal check |
| C. | Interim audit |
| D. | Partial audit. |
| Answer» B. Internal check | |
| 74. |
The examination of documentary evidence in support of transactions contained in the books of accounts is referred to as |
| A. | Voucher |
| B. | Verification |
| C. | Internal verification |
| D. | Vouching |
| Answer» D. Vouching | |
| 75. |
Section --------------of the companies Act,2013 detailed the qualification of company Auditors. |
| A. | 141 |
| B. | 141(ab) |
| C. | 140 |
| D. | 140(ab) |
| Answer» A. 141 | |
| 76. |
The first auditor of a company, other than a Government company, shall be appointed by |
| A. | Shareholders |
| B. | CEO |
| C. | AGM |
| D. | Board of Directors. |
| Answer» D. Board of Directors. | |
| 77. |
Select which one is not under the right of an Auditor |
| A. | Right to obtain information and explanation |
| B. | Right to visit branch office |
| C. | Right to sign the audit report |
| D. | Right to select the next auditor |
| Answer» D. Right to select the next auditor | |
| 78. |
The civil liability of an auditor can be for |
| A. | Negligence |
| B. | Misfeasance |
| C. | Negligence and misfeasance |
| D. | None of the above. |
| Answer» C. Negligence and misfeasance | |
| 79. |
Section ---- of the companies Act governs the audit of branch offices. |
| A. | 228(1) |
| B. | 228(2) |
| C. | (a) and (b) |
| D. | 228 |
| Answer» D. 228 | |
| 80. |
Sub-section (1A) of section 227 of the Companies Act specifies -----matters, which are required to be looked into by a company auditor. |
| A. | 6 |
| B. | 7 |
| C. | 2 |
| D. | 4 |
| Answer» A. 6 | |
| 81. |
A Cost Auditor is appointed by the |
| A. | Board of Directors |
| B. | Shareholders |
| C. | Central Government |
| D. | C&A-G |
| Answer» A. Board of Directors | |
| 82. |
Management Audit means |
| A. | Audit undertaken on behalf of the management |
| B. | Evaluating performance of various management processes & functions |
| C. | Compulsory audit of company management |
| D. | All of the above |
| Answer» B. Evaluating performance of various management processes & functions | |
| 83. |
Report of Cost audit should be submitted to |
| A. | Shareholders |
| B. | Company Law Board |
| C. | Central Government |
| D. | All of the above |
| Answer» C. Central Government | |
| 84. |
A Tax Auditor of a firm/proprietary concern is appointed by |
| A. | A Partner |
| B. | The Proprietor |
| C. | A person authorized by the assessee |
| D. | All of the above |
| Answer» D. All of the above | |
| 85. |
The Cost auditor is concerned mainly with accounts related to |
| A. | Cost |
| B. | Finance |
| C. | Both cost & finance |
| D. | None of the above |
| Answer» A. Cost | |
| 86. |
The Management Auditor has to submit the audit report to |
| A. | Shareholders |
| B. | Company Law Board |
| C. | Management |
| D. | State Government |
| Answer» C. Management | |
| 87. |
Compulsory Tax Audit U/S 44AB is applicable for |
| A. | 8 categories of Assessees |
| B. | 6 categories of Assessees |
| C. | 2 categories of Assessees |
| D. | 4 categories of Assessees |
| Answer» D. 4 categories of Assessees | |
| 88. |
The Cost auditor has to serve the interest of |
| A. | Shareholders |
| B. | Management |
| C. | State Government |
| D. | None of the above |
| Answer» B. Management | |
| 89. |
The verification of the correctness of cost accounts and of adherence to the cost accounting plan is known as |
| A. | Cost Audit |
| B. | Tax Audit |
| C. | Management Audit |
| D. | Internal Audit |
| Answer» A. Cost Audit | |
| 90. |
A comprehensive and critical review of all aspects of management process |
| A. | Cost Audit |
| B. | Tax Audit |
| C. | Management Audit |
| D. | Internal Audit |
| Answer» C. Management Audit | |
| 91. |
The management auditor may be appointed by |
| A. | Shareholders |
| B. | Board of directors |
| C. | Shareholders or board of directors |
| D. | None of the above |
| Answer» C. Shareholders or board of directors | |
| 92. |
The audit fees and expenses incidental to audit shall be determined by |
| A. | The Chief Commissioner |
| B. | The State Government |
| C. | The Central Government |
| D. | None |
| Answer» A. The Chief Commissioner | |
| 93. |
Which of the following is not audit software? |
| A. | Generalized Audit Software |
| B. | Specialized Audit Software |
| C. | Utility Software |
| D. | Micro Software |
| Answer» D. Micro Software | |
| 94. |
The full form of CAAT |
| A. | Computer Assisted Audit Techniques |
| B. | Computer Assistance Alternate Techniques |
| C. | Computer Audit Assistance Technique |
| D. | Customer Assisted Audit Technique |
| Answer» A. Computer Assisted Audit Techniques | |
| 95. |
Black box Approach is an approach which is also known as |
| A. | Auditing around the computer |
| B. | Auditing through the computer |
| C. | Auditing above the computer |
| D. | Auditing under the computer |
| Answer» A. Auditing around the computer | |
| 96. |
The process of collecting and evaluating evidence to determine whether a computer system safeguards assets, maintains data integrity, achieves organizational goals effectively, and consumes resources efficiently. |
| A. | Electronic data processing |
| B. | Electronic Domain Process |
| C. | Environment Development process |
| D. | None of the above |
| Answer» A. Electronic data processing | |
| 97. |
Tax audit comprises of |
| A. | Compulsory Tax Audit |
| B. | Tax Audit for claiming deductions and exemptions |
| C. | Selective Tax Audit |
| D. | All of the above |
| Answer» D. All of the above | |
| 98. |
Who among the following can be appointed as cost auditor of a company? |
| A. | Chartered Accountant |
| B. | Cost Accountant within the meaning of Cost and Works Accountants Act, 1959 |
| C. | An officer or employee of the company |
| D. | Auditor of the company |
| Answer» B. Cost Accountant within the meaning of Cost and Works Accountants Act, 1959 | |
| 99. |
Who among the following can conduct tax audit? |
| A. | Practicing Chartered Accountant |
| B. | A Chartered Accountant who has written the books of assessee |
| C. | Employee of the assessee |
| D. | Internal auditor |
| Answer» A. Practicing Chartered Accountant | |
| 100. |
Cost audit is a verification of cost records to estimate the ________ efficiency of a business. |
| A. | External |
| B. | Internal |
| C. | Both internal and external |
| D. | None of the above |
| Answer» B. Internal | |
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