McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
| 1. |
Auditing refers to |
| A. | Examination of accounts of business units only |
| B. | Preparation and checking of accounts |
| C. | Examination of accounts by professional accountants |
| D. | Checking of vouchers |
| Answer» A. Examination of accounts of business units only | |
| 2. |
Main object of auditing is |
| A. | Detection of errors |
| B. | To find out whether P&L a/c and B/S show true and fair state of affairs |
| C. | Detection of frauds |
| D. | Non of the above |
| Answer» B. To find out whether P&L a/c and B/S show true and fair state of affairs | |
| 3. |
Auditing is luxury for a |
| A. | Joint stock company |
| B. | Partnership firm |
| C. | Small shop-keeper |
| D. | Government company |
| Answer» C. Small shop-keeper | |
| 4. |
Limitation of audit is |
| A. | That it does not reveal complete picture |
| B. | That it does not guarantee accuracy of accounts |
| C. | That auditor may be biased |
| D. | All of the above |
| Answer» D. All of the above | |
| 5. |
Internal Audit is undertaken |
| A. | By independent auditor |
| B. | Statutorily appointed auditor |
| C. | By a person appointed by the management |
| D. | By a Government auditor |
| Answer» C. By a person appointed by the management | |
| 6. |
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 year |
| D. | audit of banking companies |
| Answer» A. Audit of accounts at the end of the year | |
| 7. |
Institute of Chartered Accountants of India was established on |
| A. | 1 st April,1956 |
| B. | 1 stApril, 1949 |
| C. | 1 st July,1956 |
| D. | 1 st July,1949 |
| Answer» D. 1 st July,1949 | |
| 8. |
Joint audit implies |
| A. | Audit of two concerns together |
| B. | Audit of joint stock companies |
| C. | Audit of joint sector companies |
| D. | Audit of two firms of C.A. |
| Answer» D. Audit of two firms of C.A. | |
| 9. |
The term auditing was associated with |
| A. | Hearing of accounts |
| B. | Hearing of system |
| C. | Hearing of report |
| D. | None of the above |
| Answer» A. Hearing of accounts | |
| 10. |
The scope of auditing is |
| A. | Narrow |
| B. | Wide |
| C. | Long |
| D. | Short |
| Answer» B. Wide | |
| 11. |
The arrangement of duties of staff in such a manner, that the work of one person is automatically checked by another during the course of carrying out, recording and processing a transaction. |
| A. | Internal check |
| B. | Internal audit |
| C. | Vouching |
| D. | Internal control |
| Answer» A. Internal check | |
| 12. |
The object of internal audit is |
| A. | To detect frauds and errors |
| B. | To prevent frauds and errors |
| C. | Both (a) and (b) |
| D. | Neither (a) nor (b) |
| Answer» A. To detect frauds and errors | |
| 13. |
The process of inspecting a document that supports a recorded transaction in order to verify the authority and authenticity of such a transaction |
| A. | Auditing |
| B. | Audit planning |
| C. | Vouching |
| D. | Internal check |
| Answer» C. Vouching | |
| 14. |
Which of the following is not the procedure for vouching of cash sales: |
| A. | Examine cash book |
| B. | Examine cash memos |
| C. | Examine the counterfoil of pay in slops |
| D. | Examine balance sheet |
| Answer» D. Examine balance sheet | |
| 15. |
Who is responsible for the verification of assets? |
| A. | Auditor |
| B. | Management |
| C. | Director |
| D. | None of the above |
| Answer» A. Auditor | |
| 16. |
Which of the following object is not included while verifying the liabilities by the auditor? |
| A. | Existence |
| B. | Obligation |
| C. | Completeness |
| D. | All of the above |
| Answer» D. All of the above | |
| 17. |
The work of one clerk is automatically check by another clerk is called |
| A. | Internal control. |
| B. | Internal check. |
| C. | Internal audit. |
| D. | None of the above. |
| Answer» B. Internal check. | |
| 18. |
Which of the following is not a kind of audit? |
| A. | Statutory and private audit. |
| B. | Government and continuous audit. |
| C. | Continuous, final, Interim, Cash, Cost and Management audit. |
| D. | None of these. |
| Answer» D. None of these. | |
| 19. |
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. | |
| 20. |
This kind of audit is conducted generally between two annual audit ______. |
| A. | Internal audit. |
| B. | Interim audit. |
| C. | Final audit. |
| D. | Continuous audit. |
| Answer» B. Interim audit. | |
| 21. |
Voucher relates to _________. |
| A. | Cash receipt. |
| B. | Cash payment. |
| C. | Credit transactions. |
| D. | All the above. |
| Answer» D. All the above. | |
| 22. |
To verify cash transactions, it is necessary |
| A. | System of internal control |
| B. | Check all transaction |
| C. | Documentary evidence for every transaction |
| D. | All of the above. |
| Answer» D. All of the above. | |
| 23. |
In case of sales return, the auditor should check. |
| A. | Credit notes and delivery challans. |
| B. | Whether cash has been repaid to the client |
| C. | Purchase invoices and goods received notes. |
| D. | Credit notes and goods received notes. |
| Answer» D. Credit notes and goods received notes. | |
| 24. |
Which of the following is an importance of vouching? |
| A. | Ensures all items are disclosed in the financial statement as per Schedule VI provisions |
| B. | It helps to verify whether entries are passed as per acceptable accounting principles. |
| C. | Helps in detection and prevention of errors & frauds |
| D. | All the above |
| Answer» D. All the above | |
| 25. |
The elements of auditing includes – |
| A. | Systematic and independent examination |
| B. | Stated purpose |
| C. | Collects and evaluates the evidence |
| D. | All of the above |
| Answer» D. All of the above | |
| 26. |
Interim Audit refers to an audit conducted |
| A. | In between two different accounting years |
| B. | In between two annual audits |
| C. | In between one statutory audit, one management audit and one internal audit |
| D. | None of the above |
| Answer» B. In between two annual audits | |
| 27. |
Errors occurring when generally accepted accounting principles are not observed while recording any transaction in the books of accounts |
| A. | Clerical errors |
| B. | Compensating errors |
| C. | Errors of principle |
| D. | Errors of duplication |
| Answer» C. Errors of principle | |
| 28. |
Before the work of audit is commenced, the auditor prepares a written procedure needed to implement the audit work |
| A. | Audit plan |
| B. | Audit note |
| C. | Audit programme |
| D. | Audit risk |
| Answer» C. Audit programme | |
| 29. |
The work of one clerk automatically checked by another clerk is called |
| A. | Internal control |
| B. | Internal check |
| C. | Internal audit |
| D. | None of the above |
| Answer» B. Internal check | |
| 30. |
Section 138 of the Companies Act, 2013 made internal audit compulsory for |
| A. | Every listed company |
| B. | Every unlisted public company having paid-up share capital of 50 crores or more during the preceding financial year |
| C. | Both (a) & (b) |
| D. | Neither (a) nor (b) |
| Answer» C. Both (a) & (b) | |
| 31. |
“The process of inspecting documents that supports a recorded transaction in order to verify the authority and authenticity of such a transaction” is |
| A. | Vouching |
| B. | Verification |
| C. | Internal Check |
| D. | Internal Control |
| Answer» A. Vouching | |
| 32. |
The process of substantiation of assets and liabilities recorded in the books of accounts by physical inspection and examination of legal and official documents to form and expert opinion |
| A. | Vouching |
| B. | Voucher |
| C. | Verification |
| D. | Audit notebook |
| Answer» C. Verification | |
| 33. |
The term „Audit‟ is derived from the Latin word “Audire” which means |
| A. | To listen |
| B. | To hear |
| C. | To know |
| D. | To audit. |
| Answer» B. To hear | |
| 34. |
A systematic and independent examination of data ,statements,records,operations,and performance(financial or otherwise) for a stated purpose. In any auditing situation,the auditor perceives and recognizes the propositions before him for examination,collects evidence,evaluates the same and on the basis formulates his judgement which is,communicated through his audit report.” This definition is given by |
| A. | Joseph Lancaster |
| B. | Taylor and Perry |
| C. | ICAI |
| D. | ICAE. |
| Answer» C. ICAI | |
| 35. |
An error occurs due to negligence in recording the details of transaction, such errors are of clerical nature and are of wrong entries,wrong positioning,additions,transfer,etc.. is called |
| A. | Errors of Commission |
| B. | Errors of Omission |
| C. | Errors of principle |
| D. | Compensating Errors. |
| Answer» A. Errors of Commission | |
| 36. |
The primary objective of auditing is to |
| A. | To examine the reliability and validity of financial statements. |
| B. | To detect errors |
| C. | To detect frauds |
| D. | None of the above. |
| Answer» A. To examine the reliability and validity of financial statements. | |
| 37. |
Audits should be based on the six principles,according to |
| A. | ISO 19001:2011 |
| B. | ISO 19011:2011 |
| C. | ISO 19111:2011 |
| D. | ISO 19000:2011 |
| Answer» A. ISO 19001:2011 | |
| 38. |
Under technique of Auditing,Documents which have their origin in the hands of the third party and held by them is |
| A. | Reliable |
| B. | More reliable |
| C. | Reliable only if the internal control is effective. |
| D. | Most reliable evidence. |
| Answer» D. Most reliable evidence. | |
| 39. |
Audit of partnership firm is under |
| A. | Audit of other organizations covered by any law |
| B. | Audit required under law |
| C. | Audit of other organizations not covered by any law |
| D. | None of the above. |
| Answer» C. Audit of other organizations not covered by any law | |
| 40. |
The external auditor are usually appointed by |
| A. | The owners only |
| B. | The government |
| C. | The management and the government |
| D. | The owners and in some cases by the government. |
| Answer» D. The owners and in some cases by the government. | |
| 41. |
The first auditor of company will hold office |
| A. | For a period of one year |
| B. | Till holding of statutory meeting |
| C. | Till the conclusion of first annual general meeting |
| D. | Till a new audtor is appointed |
| Answer» C. Till the conclusion of first annual general meeting | |
| 42. |
Remuneration of a company auditor is fixed by the |
| A. | Shareholders |
| B. | Board of Directors |
| C. | Central Government |
| D. | Appointing authority |
| Answer» D. Appointing authority | |
| 43. |
A company auditor in general has to submit his report to |
| A. | Shareholders |
| B. | Central Government |
| C. | C&A-G |
| D. | Board of Directors |
| Answer» A. Shareholders | |
| 44. |
Auditor should be dutiful like |
| A. | A watch dog |
| B. | a blood hound |
| C. | A detective |
| D. | An insurer |
| Answer» A. A watch dog | |
| 45. |
Internal auditor has to submit report to |
| A. | Shareholders |
| B. | Government |
| C. | Company Law Board |
| D. | None of the above |
| Answer» D. None of the above | |
| 46. |
An auditor is liable held criminally liable for |
| A. | Loss to his client |
| B. | Neglect of his duty |
| C. | Offences against statutory provision |
| D. | None of the above |
| Answer» C. Offences against statutory provision | |
| 47. |
A vacancy caused by resignation of the auditor is filled only |
| A. | By Board of Directors |
| B. | At the general meeting of shareholders |
| C. | By the Central Government |
| D. | By the Company Law Board |
| Answer» B. At the general meeting of shareholders | |
| 48. |
Civil liability of an auditor implies liability for |
| A. | Misappropriation of cash |
| B. | Misappropriation of goods |
| C. | Fraud |
| D. | Misfeasance |
| Answer» D. Misfeasance | |
| 49. |
___________of the Companies act 2013 lays down provisions regarding the eligibility of appointment of an auditor. |
| A. | Sec 141 |
| B. | Sec 142 |
| C. | Sec 143 |
| D. | Sec 144 |
| Answer» A. Sec 141 | |
| 50. |
Which of the following is not types of auditor |
| A. | First auditor |
| B. | Subsequent auditor |
| C. | Casual vacancy |
| D. | Last auditor |
| Answer» D. Last auditor | |
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