McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
Chapters
| 1. |
An independent audit is important to readers of financial statements because it |
| A. | Provides a measure of management's stewardship function. |
| B. | Measures and communicates the financial data included in financial statements. |
| C. | Objectively examines and reports on management's financial statements. |
| D. | Reports on the accuracy of information in the financial statements. |
| Answer» C. Objectively examines and reports on management's financial statements. | |
| 2. |
The evidence available to auditor is _______ in nature, rather _______ in nature. |
| A. | pervasive, conclusive |
| B. | Conclusive, pervasive |
| C. | limited, unlimited |
| D. | None of the above |
| Answer» A. pervasive, conclusive | |
| 3. |
Compliance with the Standard of Auditing is the responsibility of |
| A. | Management |
| B. | Those charged with governance |
| C. | Auditor |
| D. | Audit committee |
| Answer» C. Auditor | |
| 4. |
An auditor is required to determine the ____ of his audit procedures according to the requirements of Standards of Auditing. |
| A. | Conduct |
| B. | Nature ,timing and extent |
| C. | Limitation |
| D. | Planning |
| Answer» B. Nature ,timing and extent | |
| 5. |
The main object of an audit is |
| A. | Expression of opinion |
| B. | Detection and Prevention of fraud and error |
| C. | Both (1) and (2) |
| D. | Depends on the type of Business |
| Answer» D. Depends on the type of Business | |
| 6. |
The audit process is |
| A. | special application of the scientific method of inquiry. |
| B. | Regulated by the PICPA .c. |
| C. | The only service a CPA is allowed to perform by law. |
| D. | Performed only by CPAs |
| Answer» A. special application of the scientific method of inquiry. | |
| 7. |
Appropriateness means _______ of audit evidence. |
| A. | Quantity. |
| B. | Quality. |
| C. | Appropriateness. |
| D. | Sufficient. |
| Answer» B. Quality. | |
| 8. |
Professional judgment means a judgment taken by the auditor out of his ______ in an audit situation |
| A. | Past experience. |
| B. | Relation with the management |
| C. | Professional experience. |
| D. | Work experience. |
| Answer» C. Professional experience. | |
| 9. |
A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of _ |
| A. | Error of omission. |
| B. | Error of commission. |
| C. | Compensating error. |
| D. | Error of principle. |
| Answer» B. Error of commission. | |
| 10. |
Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of…………………….. |
| A. | Error of principle. |
| B. | Error of commission. |
| C. | Error of omission. |
| D. | Error of duplication. |
| Answer» A. Error of principle. | |
| 11. |
What is the main objectives of Auditing? |
| A. | To give an opinion as to the truth and fairness of Financial statement. |
| B. | To finds errors. |
| C. | To help taxation departments. |
| D. | To help customers. |
| Answer» A. To give an opinion as to the truth and fairness of Financial statement. | |
| 12. |
Meaning of Interim Audit: |
| A. | Audit of 12 months |
| B. | Audit for more than 12 months. |
| C. | Audit for less than 12 months. |
| D. | Audit for long period. |
| Answer» C. Audit for less than 12 months. | |
| 13. |
Internal Audit is conducted by : |
| A. | Employees of an Organization. |
| B. | Customers |
| C. | Government |
| D. | Employees of other Organization. |
| Answer» A. Employees of an Organization. | |
| 14. |
Audit Evidence is obtained by: |
| A. | Inspection. |
| B. | Observation. |
| C. | Inquiry and Confirmation. |
| D. | All of the above. |
| Answer» D. All of the above. | |
| 15. |
Which Audit is conducted to check the cost records of the company? |
| A. | Financial Audit. |
| B. | Operational Audit. |
| C. | Management Audit. |
| D. | Cost Audit |
| Answer» D. Cost Audit | |
| 16. |
Which of the following is not a kind of audit? |
| A. | Statutory and private. |
| B. | Government and continuous audit. |
| C. | Interim audit. |
| D. | None of these |
| Answer» D. None of these | |
| 17. |
This kind of audit is conducted generally between two annual audits. |
| A. | Internal audit. |
| B. | Interim audit. |
| C. | Final audit. |
| D. | Continuous audit. |
| Answer» B. Interim audit. | |
| 18. |
Voucher relates to ______. |
| A. | Cash receipt. |
| B. | Cash payment. |
| C. | Credit transactions |
| D. | All of the above. |
| Answer» D. All of the above. | |
| 19. |
Auditing begins where _____ends. |
| A. | Selling. |
| B. | Inventory valuation. |
| C. | Accounting. |
| D. | Purchases. |
| Answer» C. Accounting. | |
| 20. |
In the case of a company in which not less than _______% of the subscribed share capital is held whether singly or in combination by certain special institutions and bodies, the appointment or re-appointment of auditors shall be made at each annual general meeting by a special resolution. |
| A. | 25% |
| B. | 30% |
| C. | 20% |
| D. | 15% |
| Answer» A. 25% | |
| 21. |
Which of the following persons is qualified to be a company auditor? |
| A. | An employee of the company |
| B. | A body corporate |
| C. | A person who is indebted to the company for an amount exceeding Rs. 1000 |
| D. | A practicing-chartered accountant |
| Answer» D. A practicing-chartered accountant | |
| 22. |
When the auditor is an employee of the organization being audited, the audit is classified as _____ |
| A. | Internal |
| B. | External |
| C. | Compliance |
| D. | Both A&B |
| Answer» A. Internal | |
| 23. |
If there is capital loss, the auditor should |
| A. | Not allow payment of dividend |
| B. | Allow payment of dividends |
| C. | Allow payment of dividends after making such losses good |
| D. | None of the above |
| Answer» B. Allow payment of dividends | |
| 24. |
Auditor should see that amount received for premium on issue of shares should be shown in ______ |
| A. | Subscribed capital |
| B. | Capital Reserve Account |
| C. | Share Premium account |
| D. | Paid- up capital account |
| Answer» C. Share Premium account | |
| 25. |
Sec.143 of Companies Act 20913 deals with _____ |
| A. | Powers and rights of an auditor |
| B. | Removal of an auditor |
| C. | Appointment of an auditor |
| D. | Remuneration of an auditor |
| Answer» A. Powers and rights of an auditor | |
| 26. |
Internal auditor is appointed by______ |
| A. | Management |
| B. | Shareholders |
| C. | Government |
| D. | Statutory body |
| Answer» A. Management | |
| 27. |
……………….is the medium through which an auditor expresses his opinion on the state of affairs of the client’s business. |
| A. | Audit report |
| B. | Audit certificate |
| C. | Audit programme |
| D. | Audit planning |
| Answer» A. Audit report | |
| 28. |
………………… is the specific guidelines and directions for efficient and effective completion of the audit work on timely and daily basis, so as to minimise audit risk. |
| A. | Audit planning |
| B. | Audit report |
| C. | Audit programme |
| D. | Audit certificate |
| Answer» A. Audit planning | |
| 29. |
……………….. is a method of organising the accounting system of a business concern or a factory by which the duties of various clerks are arranged in such a way that the work of one person is automatically checked by another. |
| A. | Internal control |
| B. | Internal check |
| C. | Internal audit |
| D. | All of the above |
| Answer» B. Internal check | |
| 30. |
Internal check is a part of |
| A. | Internal audit |
| B. | Internal accounting |
| C. | External audit |
| D. | Internal control |
| Answer» D. Internal control | |
| 31. |
Civil liability of an auditor implies liability for |
| A. | Misappropriation of cash |
| B. | Misappropriation of goods |
| C. | Fraud |
| D. | Misfeasance |
| Answer» D. Misfeasance | |
| 32. |
If an auditor is not appointed at annual general meeting, he is appointed by the |
| A. | The Central Government |
| B. | Board of Directors |
| C. | Shareholders |
| D. | Company Law board |
| Answer» A. The Central Government | |
| 33. |
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 | |
| 34. |
Audit means _______. |
| A. | Recording business transactions |
| B. | Preparing final accounts |
| C. | Examination of books, accounts or vouchers |
| D. | Decision making |
| Answer» C. Examination of books, accounts or vouchers | |
| 35. |
When a transaction has not been recorded in the books of account either wholly or partially such errors are called _______. |
| A. | Error of commission |
| B. | Error of omission |
| C. | Compensating error |
| D. | None of the above |
| Answer» B. Error of omission | |
| 36. |
The liabilities of an auditor can be ________. |
| A. | Civil |
| B. | Criminal |
| C. | Civil & Criminal |
| D. | Financial |
| Answer» C. Civil & Criminal | |
| 37. |
Duties of an auditor is _______. |
| A. | Statutory duties imposed by the Companies Act |
| B. | Duties imposed by legal or court decisions |
| C. | Duties arising out of professional etiquette |
| D. | All of the above |
| Answer» D. All of the above | |
| 38. |
Internal auditor of a company must be _______. |
| A. | Cost accountant |
| B. | Chartered accountant |
| C. | ICWA |
| D. | Need not possess any professional qualification |
| Answer» D. Need not possess any professional qualification | |
| 39. |
Sec.139 (7) provides that in the case of a Government Company or any other company owned or controlled by the Central Government, or by any State Government, the first auditor shall be appointed by _________ |
| A. | Comptroller and Auditor-General of India |
| B. | Central Government |
| C. | State Government |
| D. | None of the above |
| Answer» A. Comptroller and Auditor-General of India | |
| 40. |
Objectives of internal audit includes _________. |
| A. | Proper control |
| B. | Perfect accounting system |
| C. | Asset protection |
| D. | All of the above |
| Answer» D. All of the above | |
| 41. |
Internal control includes ________. |
| A. | Internal audit |
| B. | Internal check |
| C. | Both internal audit and internal check |
| D. | Internal check and external audit |
| Answer» C. Both internal audit and internal check | |
| 42. |
…………. is the examination of all documentary evidence which are available to support the authenticity of transactions entered in the client’s records. |
| A. | Accounting |
| B. | Vouching |
| C. | Internal check |
| D. | None of the above |
| Answer» B. Vouching | |
| 43. |
Audit done by the employees of the business undertaking is called ______. |
| A. | Final audit |
| B. | Internal audit |
| C. | Company audit |
| D. | Statutory audit |
| Answer» B. Internal audit | |
| 44. |
Which of the following is not a kind of audit? |
| A. | Statutory and private audit |
| B. | Government and continuous audit |
| C. | Final, Interim, management audit |
| D. | None of the above |
| Answer» D. None of the above | |
| 45. |
Effective internal check system reduces |
| A. | The liability of auditor |
| B. | Work of auditor |
| C. | Responsibilities of an auditor |
| D. | None of the above |
| Answer» B. Work of auditor | |
| 46. |
Misappropriation of goods may be checked by |
| A. | Proper supervision over stock |
| B. | Checking of employees |
| C. | Punishment of employees |
| D. | None of the above |
| Answer» B. Checking of employees | |
| 47. |
Internal check is suitable for _______. |
| A. | Larger concerns |
| B. | Smaller concerns |
| C. | Petty-shop keepers |
| D. | None of the above |
| Answer» A. Larger concerns | |
| 48. |
Final audit implies |
| A. | Finally checking of accounts to reveal frauds |
| B. | Audit for submitting report immediately at the end of the year |
| C. | Audit of banking companies |
| D. | Audit of accounts at the end of the year |
| Answer» D. Audit of accounts at the end of the year | |
| 49. |
Remuneration of an internal auditor is fixed by ______. |
| A. | Management |
| B. | Shareholders |
| C. | Government |
| D. | Statutory body |
| Answer» A. Management | |
| 50. |
The objective of the audit planning is ________ |
| A. | To give appropriate attention to all important areas of audit |
| B. | To identify potential problems |
| C. | To coordinate work with other auditors and experts |
| D. | All of the above |
| Answer» D. All of the above | |
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