McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Uncategorized topics .
| 1. |
Financial (attest) audit is primarily concerned with expression of audit opinion on a set of financial statements. |
| A. | FALSE |
| B. | TRUE |
| C. | none |
| D. | all |
| Answer» B. TRUE | |
| 2. |
Financial (attest) audit includes:
|
| A. | (i) only |
| B. | (i) & (ii) only |
| C. | (i) to (iii) only |
| D. | All of the above |
| Answer» D. All of the above | |
| 3. |
Financial (attest) audit includes an evaluation of Compliance with applicable statutes and regulations |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» A. TRUE | |
| 4. |
Transaction audit essentially seeks to address the following issues of risks to:
|
| A. | All of the above |
| B. | (i), (ii) & (iii) only |
| C. | (i), (iii) & (iv) only |
| D. | (i), (ii) & (iv) only |
| Answer» C. (i), (iii) & (iv) only | |
| 5. |
Transaction audit is linked to a specific assurance on an individual set of financial Statements in a particular year |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» B. FALSE | |
| 6. |
Risks of financial irregularity are always material for the purpose of qualifying audit opinion on the finanicial statements |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» B. FALSE | |
| 7. |
The following types of financial statements are audited in respect of Union, State and UT Governments
|
| A. | (i) & (ii) only |
| B. | (i) to (iii) only |
| C. | (i) & (iii) only |
| D. | All of the above |
| Answer» A. (i) & (ii) only | |
| 8. |
Financial Audit of Government Companies is conducted by |
| A. | Chartered Accountants appointed by the companies |
| B. | Chartered Accountants appointed by Ministry of Company Affairs |
| C. | Chartered Accountants appointed by C&AG |
| D. | C&AG |
| Answer» C. Chartered Accountants appointed by C&AG | |
| 9. |
The audit of financial statements of Government Companies conducted by the C&AG is called |
| A. | Financial Audit |
| B. | Supplementary Audit |
| C. | Attest Audit |
| D. | Compliance Audit |
| Answer» B. Supplementary Audit | |
| 10. |
Financial Audit of Autonomous Bodies receiving financial assistance is governed by ______ of CAG's DPC Act 1971 |
| A. | 13 & 14 |
| B. | 14 & 15 |
| C. | 13 & 15 |
| D. | 16 |
| Answer» B. 14 & 15 | |
| 11. |
The International Standards of Auditing (ISAs) have been developed by |
| A. | The International Federation of Accountants |
| B. | The International Auditing Practices Committee |
| C. | The Internationa Auditing & Accounting Standards Board |
| D. | The INTOSAI |
| Answer» A. The International Federation of Accountants | |
| 12. |
The Auditing Standards of the C&AG of India comprise of
|
| A. | (i) to (iii) only |
| B. | (i) & (ii) only |
| C. | (i), (iii) & (iv) only |
| D. | All of the above |
| Answer» C. (i), (iii) & (iv) only | |
| 13. |
Which of these standards regulate the condut of the auditor |
| A. | General Standards |
| B. | Field Audit Standards |
| C. | Field Standards |
| D. | Reporting Standards |
| Answer» A. General Standards | |
| 14. |
Which of these standards regulate the audit activity of the auditor |
| A. | General Standards |
| B. | Field Audit Standards |
| C. | Field Standards |
| D. | Reporting Standards |
| Answer» C. Field Standards | |
| 15. |
The Primary objective of a financial audit is to |
| A. | Examine the accounts and records |
| B. | Srutinize financial statements |
| C. | Point out overstatements and understatements of account balances |
| D. | Express an opinion on the financial statements |
| Answer» D. Express an opinion on the financial statements | |
| 16. |
The general audit objectives are also called |
| A. | Opinions |
| B. | Assertions |
| C. | Criteria |
| D. | None of these |
| Answer» B. Assertions | |
| 17. |
Which of these is the correct set of general financial audit objectives for income & expenditure account |
| A. | Completeness, Occurrence, Measurement, Disclosure, Regularity |
| B. | Completeness, Occurrence, Measurement, Disclosure, Existence |
| C. | Completeness, Occurrence, Existence, Disclosure, Regularity |
| D. | Completeness, Ownership, Measurement, Disclosure, Regularity |
| Answer» A. Completeness, Occurrence, Measurement, Disclosure, Regularity | |
| 18. |
Which of these is the correct set of general financial audit objectives for balance sheet |
| A. | Completeness , Existence , Valuation , Ownership , Disclosure |
| B. | Completeness , Existence , Measurement , Ownership , Disclosure |
| C. | Completeness , Occurence , Valuation , Ownership , Disclosure |
| D. | Completeness , Regularity , Valuation , Ownership , Disclosure |
| Answer» A. Completeness , Existence , Valuation , Ownership , Disclosure | |
| 19. |
The legal right to sue and recover an account receivable is the test of |
| A. | Existence |
| B. | Ownership |
| C. | Completeness |
| D. | None of these |
| Answer» B. Ownership | |
| 20. |
This financial audit objective directly tests for potential overstatement of assets and liabilities |
| A. | Existence |
| B. | Ownership |
| C. | Completeness |
| D. | None of these |
| Answer» A. Existence | |
| 21. |
Insurance relating to the year 2013-14 was paid in 2012-13 in advance. The same was however booked as expenditure in 2012-13. This does not meet the objective of |
| A. | Existence |
| B. | Ownership |
| C. | Completeness |
| D. | Occurrence |
| Answer» D. Occurrence | |
| 22. |
If some item of revenue expenditure is misclassified as capital expenditure, it can be said that this objective is not met |
| A. | Existence |
| B. | Disclosure |
| C. | Completeness |
| D. | Occurrence |
| Answer» B. Disclosure | |
| 23. |
If the monthly accounts of some Treasuries or Public Works Divisions are excluded from the Accounts of a State Government, it affects this objective |
| A. | Existence |
| B. | Disclosure |
| C. | Completeness |
| D. | Occurrence |
| Answer» C. Completeness | |
| 24. |
A financial audit is intended to give |
| A. | Qualified Assurance |
| B. | Absolute Assurance |
| C. | Positive Assurance |
| D. | None of these |
| Answer» D. None of these | |
| 25. |
Materiality is classified by |
| A. | Context |
| B. | Nature |
| C. | Value |
| D. | All of these |
| Answer» D. All of these | |
| 26. |
The point where the total value of errors in an account becomes unacceptable to audit is called |
| A. | Unacceptable level |
| B. | Materiality level |
| C. | Qualifiable Level |
| D. | None of these |
| Answer» B. Materiality level | |
| 27. |
The materiality thresholds depend on the ____ of accounts and their _____. |
| A. | Basis, Sensitivity |
| B. | Sensitivity, relativity |
| C. | Basis, accountablity |
| D. | Basis, Value |
| Answer» A. Basis, Sensitivity | |
| 28. |
For accounts prepared on cash basis, in respect of gross receipts/expenditure, materiality percentage would be |
| A. | For very sensitive accounts - 1 %, sensitive accounts - 1% to 2% and non sensitive accounts - 5% |
| B. | For very sensitive accounts - 1/2 %, sensitive accounts - 1/2% to 2% and non sensitive accounts - 2% |
| C. | For very sensitive accounts - 2 %, sensitive accounts - 5% and non sensitive accounts - 8% |
| D. | none of these |
| Answer» B. For very sensitive accounts - 1/2 %, sensitive accounts - 1/2% to 2% and non sensitive accounts - 2% | |
| 29. |
Planning materiality may be taken at a lower figure than reporting materiality. |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» A. TRUE | |
| 30. |
Which of the following statements is true about Precision |
| A. | It is a range of error in an account between MLE & materiality |
| B. | It is a range of error in an account between MLE & AMLE |
| C. | It is a range of error in an account between Materiality & AMLE |
| D. | None of these |
| Answer» A. It is a range of error in an account between MLE & materiality | |
| 31. |
AMLE in the context of likely errors is used in this stage of audit |
| A. | Reporting |
| B. | Evaluation of results |
| C. | Planning |
| D. | Field Audit |
| Answer» C. Planning | |
| 32. |
The formula for calculating precision is |
| A. | (Materiality - Range of error possible) x AMLE |
| B. | (Materiality - AMLE) x Range of error possible |
| C. | (AMLE - Range of error possible) x Materiality |
| D. | None of these |
| Answer» B. (Materiality - AMLE) x Range of error possible | |
| 33. |
There is a direct relationship between materiality level and the level of audit risk |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» B. FALSE | |
| 34. |
The three components of Audit Risk as per the risk model are |
| A. | Inherent Risk, Control Risk, Mitigation Risk |
| B. | Inherent Risk, Control Risk, Litigation Risk |
| C. | Inherent Risk, Control Risk, Detection Risk |
| D. | None of these |
| Answer» C. Inherent Risk, Control Risk, Detection Risk | |
| 35. |
If the desired overall assurance from audit is 95%, the inherent risk is 40% and the control risk is 50%, what would be the desired assurance from substantive tests |
| A. | 90% |
| B. | 95% |
| C. | 99% |
| D. | 75% |
| Answer» D. 75% | |
| 36. |
what are the audit procedures commonly used to obtain audit assurance? |
| A. | Analytical Procedures |
| B. | Systems Based Audit |
| C. | Direct Substantive Testing |
| D. | All of the above |
| Answer» D. All of the above | |
| 37. |
Which of the following is not a part of analytical procedures? |
| A. | System Analysis |
| B. | Economic Analysis |
| C. | Regression Analysis |
| D. | Predictive Analysis |
| Answer» B. Economic Analysis | |
| 38. |
When you are finding out the inventory-turnover ratio, you are doing |
| A. | Comparison across components |
| B. | Comparison involving a single component |
| C. | Regression analysis |
| D. | Economic analysis |
| Answer» A. Comparison across components | |
| 39. |
This is a technique that creates an equation to reveal how one variable is related to one or more other variables. |
| A. | Comparison across components |
| B. | Predictive Analysis |
| C. | Regression analysis |
| D. | Economic analysis |
| Answer» C. Regression analysis | |
| 40. |
Which of the audit procedures is a form of inductive reasoning where the reasonableness of the aggregate results is inferred from the evidence of reliability of the individual details that are tested? |
| A. | Analytical Procedures |
| B. | Systems Based Audit |
| C. | Direct Substantive Testing |
| D. | All of the above |
| Answer» C. Direct Substantive Testing | |
| 41. |
Which kind of audit sampling is generally used for testing controls? |
| A. | Attribute Sampling |
| B. | Random Sampling |
| C. | Monetary Unit Sampling |
| D. | Stratified Sampling |
| Answer» A. Attribute Sampling | |
| 42. |
Which method of sampling is expected to produce representative samples? |
| A. | Block Selection |
| B. | Judgmental Sampling |
| C. | Random Sampling |
| D. | Convenient Sampling |
| Answer» C. Random Sampling | |
| 43. |
Which method of sampling is not expected to produce representative samples? |
| A. | Block Selection |
| B. | Random Sampling |
| C. | Systematic Sampling |
| D. | Monetary Unit Sampling |
| Answer» A. Block Selection | |
| 44. |
A pre-condition for any statistical sampling is the availability of a _______ |
| A. | Sampling unit |
| B. | sampling frame |
| C. | Sampling structure |
| D. | All of the above |
| Answer» B. sampling frame | |
| 45. |
Population is divided into groups, each being fairly homogenous with respect to value and risk in this kind of sampling |
| A. | Block Selection |
| B. | Random Sampling |
| C. | Stratified Sampling |
| D. | Monetary Unit Sampling |
| Answer» C. Stratified Sampling | |
| 46. |
Sampling interval is calculated in this kind of sampling |
| A. | Simple Random Sampling |
| B. | Systematic Sampling |
| C. | Stratified Sampling |
| D. | All of the above |
| Answer» B. Systematic Sampling | |
| 47. |
This method of sampling is also called probability proportionate to size (PPS) sampling |
| A. | Block Selection |
| B. | Random Sampling |
| C. | Stratified Sampling |
| D. | Monetary Unit Sampling |
| Answer» D. Monetary Unit Sampling | |
| 48. |
Extrapolation of sampling results to the population is possible in the case of Judgmental Sampling. |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» B. FALSE | |
| 49. |
Risk assessment is primarily a part of which of these stages in the audit process? |
| A. | Planning |
| B. | Excecution |
| C. | Reporting |
| D. | Follow up |
| Answer» A. Planning | |
| 50. |
Reflecting all the transactions relating to the period of the accounts without regard to the actual date of payment or receipt is also called |
| A. | Accrual system accounting |
| B. | Mercantile system of accounting |
| C. | Both |
| D. | None of these |
| Answer» C. Both | |
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