Auditing Solved MCQs

1.

Goods purchased but not recorded in the purchase register is ________________

A. an error of omission
B. to reduce profits
C. an error of commission
D. affect on agreement of trial balance
Answer» A. an error of omission
2.

Working papers are the property of the ________________

A. client and auditor
B. auditor
C. client
D. equity shareholders
Answer» B. auditor
3.

Which of the following documents is not relevant for vouching of sales ________________

A. daily cash sales summary
B. credit memos
C. delivery challans
D. sales department attendance record
Answer» D. sales department attendance record
4.

The main object of an Audit is ________________

A. to ensure that final accounts are prepared
B. expression of an opinion on true and fair view of accounts
C. to ensure the future viability of the enterprise
D. detection and prevention of frauds and errors
Answer» B. expression of an opinion on true and fair view of accounts
5.

An Audit Programme must be prepared ________________

A. before commencement of an audit
B. after completion of an audit
C. after submission of an audit report
D. during the conduct of an audit
Answer» A. before commencement of an audit
6.

Analytical Review is ________________

A. an audit technique
B. audit in depth
C. a compliance procedure
D. reporting requirement
Answer» A. an audit technique
7.

Audit in Depth means ________________

A. none of the above
B. detailed examination of all transactions
C. investigation of all transactions
D. detailed examination of selected transactions
Answer» D. detailed examination of selected transactions
8.

Audit programme should be ________________

A. flexible
B. rigid
C. oral and flexible
D. oral
Answer» A. flexible
9.

________________ incorporates both Accounting and Administrative Controls.

A. internal control
B. internal check
C. statutory audit
D. internal audit
Answer» A. internal control
10.

Debtors are valued at ________________

A. realizable value
B. as per articles of association
C. book value
D. decided by the customer
Answer» C. book value
11.

The main objective of Window Dressing is ________________

A. increase liability
B. to mislead investors
C. to reduce tax liability
D. to understate profits
Answer» B. to mislead investors
12.

________________ document is not relevant for vouching cash purchases

A. purchase order
B. goods inward register
C. purchase invoice
D. attendance record of cashier
Answer» D. attendance record of cashier
13.

To select a sample for Audit, the auditor should consider ________________

A. all the above
B. the size of the sample
C. the volume of transactions
D. adequacy of internal control system
Answer» A. all the above
14.

Secret reserves are shown on ________________

A. assets side of balance sheet
B. none of the above
C. liabilities side of balance sheet
D. credit side of trading account
Answer» B. none of the above
15.

Stock of goods on consignment should be valued at ________________

A. none of the above
B. invoice price
C. cost of realizable value whichever is lower
D. cost price
Answer» C. cost of realizable value whichever is lower
16.

________________ is not an error of Commission

A. mathematical error
B. compensating error
C. posting error
D. none of the above
Answer» B. compensating error
17.

Telephone charges should be examine on the basis of ________________

A. cash memo
B. telephone bill
C. all the above
D. agreement with telephone department
Answer» B. telephone bill
18.

The Auditor examines Bill of Lading in order to vouch ________________

A. sales within the state
B. all the above
C. sales outside the state
D. sales outside the country
Answer» D. sales outside the country
19.

________________ Asset, which is not subject to physical verification

A. stock
B. cash
C. furniture
D. debtors
Answer» D. debtors
20.

Goods sold but not recorded in Sales Register is ________________

A. compensating error
B. an error of commission
C. an error of omission
D. none of the above
Answer» B. an error of commission
21.

Audit plan should be best on knowledge of the ________________

A. client\s reputation
B. client\s family
C. client\s share capital
D. client\s business
Answer» D. client\s business
22.

Confirmation is ________________

A. a compliance procedure
B. an audit technique
C. a principle of audit
D. none of the above
Answer» B. an audit technique
23.

________________ should be checked by the Auditor in verification of Machinery

A. all the above
B. charge/line
C. the possession
D. ownership
Answer» A. all the above
24.

Closing stock with the consignee is to be shown as the Asset of ________________

A. consignee
B. customer
C. all the above
D. consignor
Answer» D. consignor
25.

If a material financial fraud is detected, Auditor should ________________

A. report it to police
B. report it to the institute of ca of india
C. ignore it
D. report it to the owners or shareholders
Answer» D. report it to the owners or shareholders
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