McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
Chapters
| 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 | |
| 70. |
A company auditor can be removed before expiry of his term by |
| A. | Shareholders |
| B. | Board of Directors |
| C. | Central Government |
| D. | State Government |
| Answer» A. Shareholders | |
| 71. |
A continuous audit is specially needed for |
| A. | Any trading concern |
| B. | Smaller concerns |
| C. | Banking companies |
| D. | Any manufacturing companies |
| Answer» C. Banking companies | |
| 72. |
Propriety audit refers to |
| A. | Verification of accounts |
| B. | Examination accounts of propriety concerns |
| C. | Enquiry against justification and necessity of expresses |
| D. | Audit of Govt. companies |
| Answer» C. Enquiry against justification and necessity of expresses | |
| 73. |
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 the year |
| D. | Audit of banking companies |
| Answer» A. Audit of accounts at the end of the year | |
| 74. |
Management audit means |
| A. | Audit undertaken on behalf of the management |
| B. | Evaluating performance of various management processes and functions |
| C. | Audit undertaken on behalf of Govt. to punish management |
| D. | Compulsory audit |
| Answer» B. Evaluating performance of various management processes and functions | |
| 75. |
A special auditor is appointed by the |
| A. | Shareholders |
| B. | Board of Directors |
| C. | Central Government |
| D. | C & A – G |
| Answer» C. Central Government | |
| 76. |
A government Co. auditor may be appointed by the |
| A. | C & A – G |
| B. | Shareholders |
| C. | Central Government |
| D. | None of the above |
| Answer» A. C & A – G | |
| 77. |
Auditor should be dutiful like a |
| A. | A watch dog |
| B. | A blood hound |
| C. | A detective |
| D. | An insurer |
| Answer» A. A watch dog | |
| 78. |
--------------- audit is forward looking – |
| A. | Financial |
| B. | Cost |
| C. | Tax |
| D. | none |
| Answer» B. Cost | |
| 79. |
Audit under any statute in a country is called ------------------ |
| A. | Final audit |
| B. | Internal audit |
| C. | Statutory audit |
| D. | none |
| Answer» C. Statutory audit | |
| 80. |
-------------------- audit is not a statuary requirement |
| A. | Management |
| B. | Financial |
| C. | Tax Audit |
| D. | none |
| Answer» A. Management | |
| 81. |
---------------- audit is compulsory for joint stock companies |
| A. | Statutory |
| B. | Final |
| C. | Continuous |
| D. | none |
| Answer» A. Statutory | |
| 82. |
Deduction under section 80-HHE is related to : |
| A. | Export of computer software, technical services outside India. |
| B. | Foreign projects. |
| C. | Business of exports. |
| D. | Backwards industries |
| Answer» A. Export of computer software, technical services outside India. | |
| 83. |
Form 3-CB is used for : |
| A. | Truth and fairness of Accounts. |
| B. | Filled in the case of compulsory Audit. |
| C. | Filled by Special Business. |
| D. | Filled by government organizations. |
| Answer» A. Truth and fairness of Accounts. | |
| 84. |
Deduction under section 35-D is related to: |
| A. | Preliminary Expenses |
| B. | Foreign projects. |
| C. | Business of exports. |
| D. | Backwards industries. |
| Answer» A. Preliminary Expenses | |
| 85. |
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 | |
| 86. |
An auditor is liable for his annual audit of accounts o: |
| A. | Creditors |
| B. | Bankers |
| C. | Owners |
| D. | Debtors. |
| Answer» C. Owners | |
| 87. |
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 | |
| 88. |
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 | |
| 89. |
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. | |
| 90. |
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 | |
| 91. |
Audit in depth is synonymous for |
| A. | Complete audit |
| B. | Completed audit |
| C. | Final audit |
| D. | Detailed audit. |
| Answer» B. Completed audit | |
| 92. |
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 | |
| 93. |
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 | |
| 94. |
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 | |
| 95. |
Who is responsible for the appointment of statutory auditor of a limited company ? |
| A. | Directors of the company. |
| B. | Members of the company. |
| C. | The Central Government. |
| D. | All of the above. |
| Answer» B. Members of the company. | |
| 96. |
Which of the following sections deal with qualifications of the auditor ? |
| A. | Section 226 (1) and section 226(2). |
| B. | Section 224 (1) and section 224 (2). |
| C. | Section 226 (3) and section 226(4). |
| D. | Section 224(3) & Sec.224. |
| Answer» A. Section 226 (1) and section 226(2). | |
| 97. |
Which of the following statement is not true? |
| A. | A partnership firm can be appointed as a statutory auditor of limited company. |
| B. | Appointment can be made in the name of the firm. |
| C. | Majority of the partners should be practicing in India. |
| D. | All partners should be chartered accountants. |
| Answer» C. Majority of the partners should be practicing in India. | |
| 98. |
As per the requirements of section 226(3) and 226(4) a person is disqualified from being appointed as a statutory auditor if he holds……………… |
| A. | Equity shares or debentures of the company. |
| B. | Equity shares carrying voting of the company. |
| C. | Shares carrying voting rights of the company. |
| D. | Security carrying voting rights of the company. |
| Answer» D. Security carrying voting rights of the company. | |
| 99. |
The board of directors shall appoint first auditor of a company. |
| A. | With in one month of completion of capital subscription state of the company. |
| B. | With in one month of the promotion of the company. |
| C. | With in one month of the commencement of the business of the company. |
| D. | With in one month of incorporation of the company. |
| Answer» D. With in one month of incorporation of the company. | |
| 100. |
The term of the auditor ship of first auditor would be from the date of appointment till…………………………. |
| A. | the conclusion of statutory meeting. |
| B. | the conclusion of first annual general meeting. |
| C. | the conclusion of next annual general meeting. |
| D. | the date of removal. |
| Answer» B. the conclusion of first annual general meeting. | |
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