Auditing MCQs

Question 1

The subsidiary object of auditing is:

Accepted Answer

Detection and prevention of errors and frauds

Answer

Detection and prevention of errors

Answer

Detection and prevention of frauds

Answer

None of the above

Question 2

The cost audit report has to be submitted within . . . . . . . . days of the closure of the books of account (or end of the accounting period).

Accepted Answer

Answer

45

Answer

60

Answer

90

Answer

120

Question 3

The most important objective of internal audit is

Accepted Answer

Early detection of inaccuracies and frauds

Answer

To be helpful in final audit

Answer

Prompt verification of annual accounts

Answer

Ensuring regular accounting

Question 4

The nature, timing and extent of substantive procedures is related to assessed level of control risk:

Accepted Answer

Directly

Answer

Randomly

Answer

Disproportionately

Answer

Inversely

Question 5

Test Checking refers to:

Accepted Answer

Checking of selected number of transactions

Answer

Testing of accounts and records

Answer

Examination of adjusting and closing entries

Answer

Checking of all transactions recorded

Question 6

The verification of the authority and authenticity of transaction recorded in the books of accounts is called

Accepted Answer

Vouching

Answer

Verification

Answer

Internal Audit

Answer

Investigation

Question 7

Management audit is

Accepted Answer

Optional

Answer

Statutory

Answer

Compulsory

Answer

None of the above

Question 8

Which of the following financial statements assertions are addressed by testing the cut off for plant asset addition?

Accepted Answer

Completeness and valuation

Answer

Existence and ownership

Answer

Valuation and disclosure

Answer

Possession and ownership

Question 9

Internal audit is done:

Accepted Answer

To stop capital erosion

Answer

To help management in declaring dividend

Answer

To reduce cost of production

Answer

To guide in price fixation