Auditing MCQs

Question 1

The scope of the audit including reference to the pronouncements of the ICAI, which the auditor adheres to, generally is communicated to the client in the . . . . . . . . (i) auditor's report (ii) engagement letter (iii) representation letter

Accepted Answer

Both (i) and (ii)

Answer

(i) only

Answer

Both (i) and (iii)

Answer

All of the above

Question 2

Special audit is necessary for . . . . . . . .

Accepted Answer

inefficient concern

Answer

processing concern

Answer

trading concern

Answer

manufacturing concern

Question 3

Knowledge of the entity's business does not help the auditor to:

Accepted Answer

Reduce inherent risk

Answer

Identify problem areas

Answer

Evaluate reasonableness of estimates

Answer

Evaluate appropriates of GAAP

Question 4

Under the Companies Act, the Statutory Cost Audit is conducted as per the provisions of

Accepted Answer

Section 233 (B)

Answer

Section 209 (d)

Answer

Section 233 (13)

Answer

Section 224

Question 5

While vouching wages, auditor should examine whether there is proper segregation of duties. Which of the following activities should not be done by same department?

Accepted Answer

Proposing pay roll summary and disbursement of wages

Answer

Maintaining personnel records and approving changing in wages rates

Answer

Making salary statements and filing tax returns

Answer

Comparing time clock records with time reports prepared by supervisors and preparing list of workers employed along with the units of production for each one of them

Question 6

Which statement is not true about Management Audit?

Accepted Answer

It is a statutory obligation

Answer

It appraises managerial performance

Answer

It ascertains whether the controls are adequate and effective

Answer

It evaluates plans to meet the objectives

Question 7

Cost audit report is to be furnished to:

Accepted Answer

The central government with a copy to company

Answer

The company

Answer

The central government

Answer

The company secretary

Question 8

In case of unclaimed wages, the auditor should examine whether:

Accepted Answer

The amount has been deposited in a separate bank account

Answer

Deposited with the cashier

Answer

Held in a safe deposit box

Answer

All of these

Question 9

Which of the following Schedule of the Companies Act, 2013 deals with depreciations?

Accepted Answer

Schedule II

Answer

Schedule V

Answer

Schedule XIII

Answer

Schedule X