Auditing MCQs

Question 1

Testing the truthness of the items appearing in the books of original entries is called vouching. This definition is given by

Accepted Answer

Batliboi

Answer

D. Paula

Answer

Joseph Lancaster

Answer

Marshall

Question 2

Assertion (A): Internal audit is required to be conducted by a qualified chartered accountant. Reason (R): It is a tool of management. Give the correct answer using the given option

Accepted Answer

A is wrong but R is correct

Answer

Both A and R are correct and R is the correct explanation of A

Answer

Both A and R are correct and R is not the correct explanation of A

Answer

A is correct but R is wrong

Question 3

Which of the following would give the assurance that debtors mentioned on the date of balance sheet actually exist?

Accepted Answer

Both A and B

Answer

Sending debtor's confirmation letters

Answer

Reviewing subsequent collection

Answer

Verify debtors against sales document

Question 4

Which of the following statement is not true regarding appointment of auditor by the Central Government?

Accepted Answer

If a company fails to appoint an auditor at a general meeting

Answer

Such powers have been conferred upon it by section 139(7)

Answer

If an auditor refuses to accept appointment, the powers of the Central Government can be exercised

Answer

None of the above

Question 5

The auditor should state the reasons for his reservations in audit report and should try to quantify the effect on them. This should be done in case he has expressed- (i) A qualified opinion (ii) An unqualified opinion with emphasis of matter paragraph (iii) An adverse opinion (iv) A disclaimer of opinion

Accepted Answer

(i) only

Answer

(i) and (iv) only

Answer

(i), (iii) and (iv) only

Answer

All of the above

Question 6

The auditor of the company-

Accepted Answer

The right to attend only such meeting where the accounts are discussed

Answer

Shareholders have the right to attend every general meeting

Answer

The company has the right to attend only the annual general meeting

Answer

The right to attend only such annual general meetings at which the governing board decides to control it

Question 7

The process that entails a proper and rational distribution of work between the members of the staff of the organization is called

Accepted Answer

Internal Check

Answer

Internal Audit

Answer

Internal Evaluation

Answer

Internal Management

Question 8

The process of checking documentary evidence to ascertain the accuracy of accounting records is called:

Accepted Answer

Vouching

Answer

Verification

Answer

Routine checking

Answer

Internal check

Question 9

Audit at the end of the year is known as:

Accepted Answer

Periodical audit

Answer

Standard audit

Answer

Interim audit

Answer

Continuous audit