McqMate
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 |
51. |
Audit papers are the property of ______. |
A. | Client |
B. | Auditor |
C. | Both the client and the auditor |
D. | The audit committee |
Answer» B. Auditor |
52. |
Sole proprietary concerns are ______ to get their financial statements audited by independent financial auditors. |
A. | Legally required |
B. | Not legally required |
C. | Ethically required |
D. | Not ethically required |
Answer» B. Not legally required |
53. |
The performance audit may be initiated by the organisation or by ____. |
A. | Government |
B. | Employees & Management |
C. | Shareholders |
D. | External interested parties |
Answer» D. External interested parties |
54. |
Balance sheet audit is also known as ………… |
A. | Continues audit |
B. | Annual audit |
C. | Internal audit |
D. | Financial audit |
Answer» D. Financial audit |
55. |
…. lays out the strategies to be followed to conduct an audit. |
A. | An action plan |
B. | An audit plan |
C. | An audit programme |
D. | All of the above |
Answer» A. An action plan |
56. |
Auditor should determine the ______ and the timing of the audit report |
A. | Nature |
B. | Actual |
C. | Nature & actual |
D. | Form |
Answer» D. Form |
57. |
……………..followed by the enterprise affect the audit plan. |
A. | Accounting policies |
B. | Audit policies |
C. | Accounting and Audit policies |
D. | Management policies |
Answer» C. Accounting and Audit policies |
58. |
While framing an audit plan auditor should ascertain his _____ cast by various legislations on him. |
A. | Limitations |
B. | Duties and obligations |
C. | Rights and powers |
D. | Term of appointment & responsibilities |
Answer» D. Term of appointment & responsibilities |
59. |
An audit programme is a set of _______ which are to be followed for proper execution of audit. |
A. | Rules |
B. | Policies |
C. | Instructions |
D. | Actions |
Answer» C. Instructions |
60. |
Audit programme provides instructions to the audit staff and reduces scope for |
A. | Understanding |
B. | Misunderstanding |
C. | Negligence |
D. | Liabilities |
Answer» C. Negligence |
61. |
Audit programme helps in fixing the ______for the work done among the audit staff as work done may be traced back to the individual staff members. |
A. | Remuneration |
B. | Liabilities |
C. | Negligence |
D. | Responsibility |
Answer» D. Responsibility |
62. |
On completion of an audit _______serves the purpose of audit record which may be useful for future reference. |
A. | Audit programme |
B. | Audit working papers |
C. | Audit plan |
D. | Audit notes |
Answer» A. Audit programme |
63. |
Audit programme is prepared by _____ |
A. | The auditor |
B. | The client |
C. | The audit assistant |
D. | The auditor and his audit assistants |
Answer» A. The auditor |
64. |
The auditor has to obtain _______ to substantiate his opinion on the financial statements. |
A. | Internal evidence |
B. | External evidence |
C. | Internal and external evidence |
D. | Sufficient and appropriate evidence |
Answer» D. Sufficient and appropriate evidence |
65. |
The quality of information generated by the audited organization is directly related to the strength of the organization’s ______ |
A. | Internal check |
B. | Internal control |
C. | Internal audit |
D. | All of the above |
Answer» D. All of the above |
66. |
_______ are the documents prepared or obtained by the auditors in connection with the audit. |
A. | Audit notes |
B. | Audit working papers |
C. | Audit report |
D. | All of the above |
Answer» D. All of the above |
67. |
Working papers helps in proper _______ of audit. |
A. | Planning |
B. | Performance |
C. | Planning and performance |
D. | Execution |
Answer» C. Planning and performance |
68. |
The Auditors Working Papers are divided into two parts |
A. | Permanent audit file and current audit file |
B. | Permanent audit file and temporary audit file |
C. | temporary audit file and current audit file |
D. | current audit file and transitory audit file |
Answer» A. Permanent audit file and current audit file |
69. |
A statutory auditor-------- also as internal auditor of the company |
A. | Can act |
B. | Cannot act |
C. | Though can act but ethically should not act |
D. | None of the above |
Answer» B. Cannot act |
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