Auditing MCQs

Question 1

The auditor's report is submitted to

Accepted Answer

Shareholders of the company

Answer

Directors of the company

Answer

Bankers of the company

Answer

Creditors of the company

Question 2

In determining the level of materiality for an audit, what should not be considered?

Accepted Answer

The auditor's remuneration

Answer

Prior year's errors

Answer

Adjusted interim financial statements

Answer

Prior year's financial statements

Question 3

Verification includes

Accepted Answer

All the above

Answer

Valuation

Answer

Existence

Answer

Ownership and title

Question 4

For vouching of which item, the auditor is most likely to examine cost records?

Accepted Answer

Sale of scrap

Answer

Commission earned

Answer

Bad debts recorded

Answer

Credit sales

Question 5

An Auditor is a:

Accepted Answer

Watch-dog

Answer

Blood-hound

Answer

Street dog

Answer

None of the above

Question 6

The internal auditor is appointed by

Accepted Answer

By the board of directors of the company

Answer

By the shareholder of the company

Answer

By the scientific auditor

Answer

By the Indian institute of internal auditors

Question 7

Who out of the following cannot be appointed as a statutory auditor of the company?

Accepted Answer

Internal auditor

Answer

Erstwhile director

Answer

Relative of a director

Answer

Only B and C

Question 8

The auditor while verifying prepaid insurance has concluded that there is inadequate insurance of building, He should:

Accepted Answer

Both B and C

Answer

Modify his audit report

Answer

Insist it should be disclosed in the notes to financial statements

Answer

Write it in letter of weakness

Question 9

. . . . . . . . means "proving the truth or confirmation".

Accepted Answer

Verification

Answer

Vouching

Answer

Inspection

Answer

Auditing