Auditing MCQs

Question 1

Standard Auditing Practice-1 (SAP-1) is related with

Accepted Answer

Basic principles governing an audit

Answer

Objective and scope of audit of financial statement

Answer

Documentation

Answer

Detection of frauds and errors

Question 2

In a company, Internal Auditor is appointed by:

Accepted Answer

Board of Directors

Answer

Shareholders

Answer

Government

Answer

Creditors

Question 3

After completion of the audit of a company the auditor should submit its report to the

Accepted Answer

Shareholders

Answer

Government

Answer

Court

Answer

Public

Question 4

A company auditor has to report

Accepted Answer

To the shareholders in the annual general meeting

Answer

Board of directors

Answer

Managing Director

Answer

Institutional investors

Question 5

Auditor is a watch dog and not a blood hound statement is given by:

Accepted Answer

Lord Justice lopes

Answer

Lord Justice lindley

Answer

Luca Pacialo

Answer

Spicer and Pegler

Question 6

Which of the following expenses should not be treated as capital expenditure?

Accepted Answer

Legal expenses incurred to defend a suit related to title of patent. The suit has been lost

Answer

Expenses paid on installation of a plant

Answer

Cost of dismantling a building in case a new building is to be constructed on the land

Answer

The fees paid to engineer who constructed the plant

Question 7

A number of checks and controls exercised in a business to ensure its efficient working are known as . . . . . . . .

Accepted Answer

Internal Control

Answer

Internal Check

Answer

Internal Audit

Answer

Interim Check

Question 8

Special audit may be ordered

Accepted Answer

By central government

Answer

By preference shareholders

Answer

By SEBI

Answer

By bondholders/debentureholders

Question 9

The cost audit was introduced in:

Accepted Answer

1965

Answer

1968

Answer

1971

Answer

1975