Auditing MCQs

Question 1

Purchase returns should be vouched with the help of:

Accepted Answer

Credit notes

Answer

Bought notes

Answer

Goods inward book

Answer

Cash book

Question 2

For which of the following types of enterprises an independent financial audit is required statutorily.

Accepted Answer

Companies

Answer

Partnership firms

Answer

Hindu undivided families

Answer

Registered firms

Question 3

The primary purpose of performing tests of control is to provide reasonable assurance that:

Accepted Answer

If internal control is effective

Answer

There are no material misstatements due to fraud or error in financial statement

Answer

Accounting system is well documented

Answer

Written evidence is there to support transactions

Question 4

Which of the following is most crucial to a purchase department?

Accepted Answer

Authorizing the acquisition of goods

Answer

Reducing the cost of acquisition

Answer

Selecting supplies

Answer

Assuring the quality of goods

Question 5

Which of the following statements is not true about continuous audit?

Accepted Answer

It is needed when the organization has a good internal control system

Answer

It is conducted at regular interval

Answer

It may be carried out on daily basis

Answer

It is expensive

Question 6

The inventory consists of about one per cent of all assets. The client has imposed restriction on auditor to prohibit observation of stock take. The auditor cannot apply alternate audit procedures.

Accepted Answer

Disclaimer of opinion

Answer

Unqualified opinion

Answer

Qualified opinion

Answer

Adverse opinion

Question 7

Which of the following is NOT a function performed by a company secretary?

Accepted Answer

CS as an Accountant

Answer

CS as an agent of Top Management

Answer

CS as a watch-dog

Answer

CS as a proxy to the members of BOD

Question 8

Analytical procedures issued in the planning stage of an audit, generally:

Accepted Answer

All of the above

Answer

Helps to determine the nature, timing and extent of other audit procedures

Answer

Directs attention to potential risk areas

Answer

Indicates important aspects of business

Question 9

The vacancy caused by the resignation of an auditor is filled only by

Accepted Answer

the shareholders in the Annual General Meeting

Answer

the Board of Directors

Answer

the Company Law Board

Answer

the managing Director of the Company