Auditing MCQs

Question 1

The section related to removal of auditor is

Accepted Answer

Section 224(7)

Answer

Section 224(8)

Answer

Section 223(5)

Answer

Section 223(2)

Question 2

Government may order for special audit under:

Accepted Answer

Section 233-A

Answer

Section 227

Answer

Section 233-B

Answer

Section 224

Question 3

A company cannot appoint a person or a firm to be its auditor who undertakes the audit of the companies

Accepted Answer

20

Answer

12

Answer

25

Answer

28

Question 4

An internal auditor discovered that fictitious purchases have been recorded by the purchase clerk. This indicates absence of which control?

Accepted Answer

Purchase invoices are independently matched with purchase orders and goods received notes

Answer

Goods received notes requires the signature of individual who authorized the purchase

Answer

Routine checks are performed by internal auditor fortnightly

Answer

Purchase function and production function are clubbed in one department

Question 5

Internal check is carried on by:

Accepted Answer

Members of the staff

Answer

Staff specially appointed for the purpose

Answer

Internal auditor

Answer

Supervisor of the staff

Question 6

As per the requirements of section 141(3) a person is disqualified from being appointed as a statutory auditor if he holds:

Accepted Answer

Security of the company

Answer

Equity shares or debentures of the company

Answer

Equity shares carrying voting of the company

Answer

Shares carrying voting rights of the company

Question 7

Internal check is meant for . . . . . . . .

Accepted Answer

prevention of frauds

Answer

detection of frauds

Answer

helping audit is depth

Answer

detection of errors

Question 8

Which of the following is NOT a part of Basic Audit Assumption?

Accepted Answer

Inter-dependency of the auditor

Answer

True and fair view

Answer

Materiality

Answer

Ethical conduct

Question 9

An auditor is verifying valuation of building which has been self-constructed by the client. Which of the following documents is least relevant to the auditor for verification purposes?

Accepted Answer

Minutes of meeting of board of directors

Answer

Bills of contractor

Answer

Certificates of engineer and architect

Answer

Loan agreement