Auditing MCQs

Question 1

Routine checks means

Accepted Answer

Internal inspection system

Answer

Daily checking of daily copy transactions

Answer

Provisional check of accounts

Answer

Checking routine items

Question 2

Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor?

Accepted Answer

The working papers may be obtained by third parties when they appear to be relevant to issues raised in litigation

Answer

The safe custody of working papers is the responsibility of client, if kept at his premises

Answer

The working papers must be retained by an audit firm for a period of 10 years

Answer

Successor auditors may have access to working papers of the predecessor auditors. The approval of client is not require

Question 3

A systematic examination of books and record of a business is called

Accepted Answer

Auditing

Answer

Vouching

Answer

Verification

Answer

Checking

Question 4

"An auditor is not an insurer and all that he is required to do to exercise with reasonable care and skill." This decision was given in the case of

Accepted Answer

London and General Bank

Answer

Kingston Cotton Mills Co. Ltd.

Answer

Allen Craig and Co.

Answer

None of the above

Question 5

Treating revenue expenditure as capital expenditure is a case of . . . . . . . .

Accepted Answer

manipulation of accounts

Answer

fraud

Answer

misappropriation of cash

Answer

misappropriation of goods

Question 6

Which of the following documents is not relevant for vouching cash sales?

Accepted Answer

Monthly statements sent to customers

Answer

Daily cash sales summary

Answer

Statement given by salesmen

Answer

Bank statement

Question 7

An independent and critical enquiry of management process is known as:

Accepted Answer

Management Audit

Answer

Operational Audit

Answer

Financial Audit

Answer

None of the above

Question 8

The Words teaming and lading are used

Accepted Answer

for embezzlement of cash

Answer

for manipulating accounts

Answer

for fraudulent purchases

Answer

none of the above

Question 9

Receipts from sale of investments should be vouched with the help of:

Accepted Answer

Broker's sold notes

Answer

Broker's bought notes

Answer

Minutes book

Answer

Inventory of investment