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. |
Audit of a bank is generally conducted through: |
| A. | Routine checking |
| B. | Couching |
| C. | Balance sheet audit |
| D. | Profit & Loss. |
| Answer» C. Balance sheet audit | |
| 2. |
An auditor is liable for his annual audit of accounts o: |
| A. | Creditors |
| B. | Bankers |
| C. | Owners |
| D. | Debtors. |
| Answer» C. Owners | |
| 3. |
Which of the following is not true about opinion on financial statements? |
| A. | Auditor should express an opinion on financial statements. |
| B. | His opinion is no guarantee to future viability of business |
| C. | He is responsible for detection and prevention of frauds and errors in financial statements |
| D. | He should examine whether recognised accounting principle have been consistently |
| Answer» C. He is responsible for detection and prevention of frauds and errors in financial statements | |
| 4. |
Auditing standards differ from audit procedures in that procedures relate to |
| A. | Audit assumptions |
| B. | acts to be performed |
| C. | quality criterion |
| D. | methods of work. |
| Answer» B. acts to be performed | |
| 5. |
Which of the following is the most appropriate potential reaction of the auditor to his assessment that the risk of material misstatement due to fraud is high in relation to existence of inventory? |
| A. | Visit location on surprise basis to observe test counts |
| B. | Request inventory count at a date close to year end |
| C. | Vouch goods sent on approval very carefully |
| D. | Perform analytical procedures. |
| Answer» D. Perform analytical procedures. | |
| 6. |
An auditor who accepts an audit but does not possess the industry expertise of the business entity should |
| A. | engage experts |
| B. | obtain knowledge of matters that relate to the nature of entity’s business |
| C. | inform management about it |
| D. | take help of other auditors. |
| Answer» A. engage experts | |
| 7. |
Audit in depth is synonymous for |
| A. | Complete audit |
| B. | Completed audit |
| C. | Final audit |
| D. | Detailed audit. |
| Answer» B. Completed audit | |
| 8. |
Which of the following statements is, generally, correct about the reliability of audit evidence? |
| A. | To be reliable, evidence should conclusive rather than persuasive |
| B. | Effective internal control system provides reliable audit evidence |
| C. | Evidence obtained from outside sources routed through the client |
| D. | All of the Above. |
| Answer» C. Evidence obtained from outside sources routed through the client | |
| 9. |
When is evidential matter, generally, considered sufficient? |
| A. | When it constitutes entire population |
| B. | When it is enough to provide a basis for giving reasonable assurance regarding truthfulness |
| C. | When it is objective and relevant |
| D. | When auditor collects and evaluates it independently. |
| Answer» B. When it is enough to provide a basis for giving reasonable assurance regarding truthfulness | |
| 10. |
For what minimum period should audit working papers be retained by audit firm? |
| A. | For the time period the entity remains a client of the audit firm. |
| B. | For a period of ten years |
| C. | For a period auditor opines them to be useful in servicing the client |
| D. | For the period the audit firm is in existence. |
| Answer» C. For a period auditor opines them to be useful in servicing the client | |
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