Auditing MCQs

Question 1

Checking the head of account debited or credited during vouching helps the auditor to

Accepted Answer

Detect errors of principle

Answer

Check whether accounting is proper

Answer

Find errors of commission

Answer

All of the above

Question 2

If auditor does not find any irregularity or fallacy and about which there are no complaint, then which report will be submitted by auditor?

Accepted Answer

Clean report

Answer

Qualified report

Answer

Management report

Answer

Cost report

Question 3

If the book value of an asset stands at . . . . . . . . per cent of the original cost, a company need not provide depreciation on it.

Accepted Answer

Five

Answer

Two

Answer

Fifteen

Answer

None of these

Question 4

Internal audit means

Accepted Answer

Audit undertaken by employees of the organization to check financial irregularities

Answer

Audit undertaken to ascertain the truth and fairness of the state of affairs

Answer

Audit undertaken internally to evaluate management functions

Answer

Audit by an independent auditor to improve internal affairs

Question 5

The practical aspects of management audit is/are

Accepted Answer

All of these

Answer

Changes in sales

Answer

Changes in price

Answer

Organisational control

Question 6

Statement I: The scope of valuation is wider than verification. Statement II: Valuation is done after vouching but before verification.

Accepted Answer

Statement II is true, but statement I is false

Answer

Statement I is true, but statement II is false

Answer

Both statements are true

Answer

Both statements are false

Question 7

Valuation is the base of

Accepted Answer

Verification

Answer

Marketing

Answer

Vouching

Answer

All of these

Question 8

When counting cash on hand the auditor should:

Accepted Answer

Ensure postage and revenue stamps are not counted in physical count

Answer

Ensure presence of somebody from management

Answer

Obtain a receipt from custodian as to its return

Answer

Temporary advances to employees are counted to calculate balance of cash in hand

Question 9

In case of sales return, the auditor should check

Accepted Answer

Credit notes and goods received notes

Answer

Credit notes and delivery challans

Answer

Whether cash has been repaid to the client

Answer

Purchase invoices and goods received notes