Auditing MCQs

Question 1

Which of the following is not a function of an auditor

Accepted Answer

Writing the books of account

Answer

Detecting and preventing fraud

Answer

To check airthmatical correctness

Answer

Detection and preventing errors

Question 2

The approach of management auditor should be

Accepted Answer

Analytical

Answer

Brief

Answer

Internal

Answer

Configured

Question 3

Which of the following is not true about opinion on financial statements?

Accepted Answer

He is responsible for detection and prevention of frauds and errors in financial statements

Answer

The auditor should express an opinion on financial statements

Answer

His opinion is no guarantee to future viability of business

Answer

He should examine whether recognised accounting principle have been consistently

Question 4

The sequence of steps in the auditor's consideration of internal control is as follows:

Accepted Answer

Obtain an understanding, make a preliminary assessment of control risk, perform tests of control, design substantive procedures

Answer

Obtain an understanding, design substantive test, perform tests of control, and make a preliminary assessment of control risk

Answer

Design substantive tests, obtain an understanding, perform tests of control, and make a preliminary assessment of control risk

Answer

Perform tests of control, obtain and understanding, make a preliminary assessment of control risk, design

Question 5

Auditors accumulate evidence to

Accepted Answer

Unable them to reach conclusions about the fairness of the financial statements

Answer

Defend themselves in the event of a law suit

Answer

Justify the conclusion they have, otherwise reached

Answer

Satisfy the requirements of the act

Question 6

Statement I: Energy audit is an indepth check of the amount of energy being utilised. Statement II: Energy audit includes general and preliminary audit.

Accepted Answer

Both statements are correct

Answer

Statement I is correct, but statement II is incorrect

Answer

Statement II is correct, but statement I is incorrect

Answer

Both statements are incorrect

Question 7

'Auditor is not a valuer', was stated in:

Accepted Answer

Kingston Cotton Mills case

Answer

London Oil Storage Co. case

Answer

London and General Bank case

Answer

None of the above

Question 8

Which of the following statements is not true?

Accepted Answer

The auditor should value the asset as per generally accepted accounting principle

Answer

Valuation of assets is the responsibility of the management

Answer

The auditor can rely on a certificate issued by an authorized valuationer as to the valuation of assets in the balance sheet

Answer

Valuation is no part of auditor's duty

Question 9

The management auditors work begins

Accepted Answer

After the work of a statutory auditor ends

Answer

Before the work of a statutory auditor begins

Answer

Varies from firm to firm

Answer

None of the above