Auditing MCQs

Question 1

Which of the following statement is not true?

Accepted Answer

Majority of the partners should be practicing in India

Answer

A partnership firm can be appointed as a statutory auditor of limited company

Answer

Appointment can be made in the name of the firm

Answer

All partners should be chartered accountants

Question 2

The branch auditor is appointed by:

Accepted Answer

Shareholders in general meeting

Answer

Shareholders in an annual general meeting

Answer

Board of directors in board meeting

Answer

Any of the above

Question 3

Which one of the following statement is not true?

Accepted Answer

In case a person other than a retiring auditor is to be appointed as an auditor a notice of this intention must be given to the shareholders of the company as least 10 days before the date of the General Meeting of the company

Answer

An auditor is not a servant of the appointing company

Answer

The auditor is an agent of shareholders, but they are not bound by all types of notices given to the auditor by the company

Answer

A debtor of the company for more than Rs. 1,000 cannot be appointed auditor of the company

Question 4

Audit done by the employees of the business undertaking is called . . . . . . . .

Accepted Answer

Internal Audit

Answer

Final Audit

Answer

Management Audit

Answer

Government Audit

Question 5

A company has earned profit on sale of its machine and wants to pay dividend out of it. An auditor should:

Accepted Answer

not accept it

Answer

accept it

Answer

accept under certain conditions

Answer

none of the above

Question 6

The scope of work of an internal auditor is determined by

Accepted Answer

Management

Answer

Shareholders

Answer

Government

Answer

Law

Question 7

An auditor is held criminally liable for:

Accepted Answer

Offences against statutory provisions

Answer

loss to his client

Answer

Neglect of his duty

Answer

Frauds

Question 8

Which of the following is not a limitation of audit as per AAS4?

Accepted Answer

Objectivity of auditor's judgment

Answer

Selective testing

Answer

Persuasiveness of evidence

Answer

Limitations of internal control system

Question 9

Auditing, which is taken up when final accounts are ready, is called:

Accepted Answer

Periodical audit

Answer

Continuous audit

Answer

Interim audit

Answer

Irregular audit