Auditing MCQs

Question 1

The authority to remove the first auditor before the expiry of term is with:

Accepted Answer

The shareholders in a general meeting

Answer

The shareholders in the first annual general meeting

Answer

The board of directors

Answer

The Central Government

Question 2

While verifying intangible assets, an auditor would recomputed amortization charges and determines whether amortization period is reasonable. The auditor tries to establish . . . . . . . . by doing it

Accepted Answer

Valuation

Answer

Existence

Answer

Disclosure

Answer

Possession

Question 3

Internal control includes

Accepted Answer

Economic, non-economic control and administrative control

Answer

Economic control

Answer

Economic and non-economic control

Answer

None of these

Question 4

Window dressing implies:

Accepted Answer

Over valuation of assets

Answer

Curtailment of expenses

Answer

Checking of wastages

Answer

Under valuation of assets

Question 5

Internal check is a part of:

Accepted Answer

Internal control

Answer

Internal audit

Answer

Annual audit

Answer

Standard audit

Question 6

Management Audit includes

Accepted Answer

Both A and B

Answer

Efficiency and performance audit

Answer

Propriety audit

Answer

None of the above

Question 7

Institute of Chartered Accountants of India was established:

Accepted Answer

1949

Answer

1956

Answer

1958

Answer

1948

Question 8

Which of the following statements with regard to rules regarding exemption from branch audit is not true?

Accepted Answer

If a satisfactory arrangement of scrutiny check of the books of account of a branch office of a manufacturing company has been made, it can be exempted from branch audit

Answer

A branch office of a company can be granted exemption on the basis of quantum of activity criterion

Answer

Cost consideration should be considered as an important factor/ground for exemption from branch audit

Answer

The auditor should state in his audit report that branch office is exempted by virtue of quantum of activity or any other basis

Question 9

What are the qualification required to be an auditor of a company?

Accepted Answer

An auditor must be Chartered Accountant under the Chartered Accountant Act, 1949

Answer

An auditor must have passed M.Com

Answer

An auditor must have passed the exam of India audit and accounts service

Answer

An auditor must be an employee of the company