Audit & Assurance
MCQs
(1) _______ Job is analytical and critical in nature and require auditor's time, energy, attention and patience,
(A) Accounting
(B) Investigation
(C) Auditing
(D) Negotiating
(2) Standards on Quality Control (SQC)-1 requires working papers to be retained for _______ from the date of auditor's report.
(A) maximum 7 years
(B) maximum 8 years
(C) at least 7 years
(D) at least 8 years
(3) Normally, the auditor finds it necessary to rely on audit evidence that is _______.
(A) Inconclusive
(B) Probable
(C) Persuasive
(D) All of the above
(4) As Per SA 500, _______ is information used by the auditor in arriving at the conclusions on which the auditor's opinion is based.
(A) Audit evidence
(B) Audit report
(C) Audit File
(D) Audit programme
(5) Arrange the following stages, an auditor has to undergo for the performance of an audit.
I. Obtain Knowledge about business of his client,
II. Obtain an appointment letter
III. Examination of the financial information of an entity,
IV. Issuing an audit report
(A) III, I, IV, II
(B) I, II, III, IV
(C) I, III, II, IV
(D) II, I, III, IV
(6) Which of the following is/are the example/s of audit documentation
I. audit programme
II. memoranda
III. Letter of confirmation
IV. bank reconciliation statement
(A) I, II, III, IV
(B) I, II, IV
(C) I, II, III
(D) I, III, IV
(7) Star Mission Private Limited having turnover of Rs. 2.20 crores is required to carry out
I. Energy Audit
II. Statutory Audit
IlI. Internal Audit
IV. Tax Audit
(A) II, III, IV
(B) IV
(C) II, IV
(D) I, II, III
(8) Factors to be considered while planning an audit of financial statements are_______.
(A) Size and complexity of business
(B) Previous experience of key engagement team members
(C) Changes in circumstances during the audit engagement
(D) All of the above
(9) The factor which distinguishes an error from fraud and other irregularity is
(A) Whether it is caused by the auditor or the client
(B) Materiality
(C) Whether it is a caused by officer of the entity or employee of the entity
(D) Intention
(10) Which of the following is not a method of obtaining audit evidence?
(A) Accounting Statistics
(B) Re performance
(C) Analytical procedures
(D) Observation
(11) Current audit file relating to audit of a laxmi Enterprise Limited will not contain
I. Latter of balance Confirmation.
II. Audit Programmme
III. No objection Certificate of previous auditor
IV. Analysis of significant ratios and trends.
(A) I, II
(B) III, IV
(C) I, IV
(D) II, III
(12) Which of the following is an advantage of the preparation of working paper
I. To provide a guide for advising another client on similar issues,
II. To provide a basis for subsequent audits,
III. To provide a basis for review of audit work,
IV. To ensure audit work is being carried out as per programme
(A) II, III, IV
(B) I, II, III, IV
(C) III, IV, I
(D) I, II, III
(13) One or more folders or other storage media, in physical or electronic form, containing the records that comprise the audit documentation for a specific engagement is called _______.
(A) audit working papers
(B) audit notebook
(C) Audit programme
(D) audit file
(14) The primary responsibility under SA 240, the prevention and detection of frauds rests with
(A) those charged with governance
(B) Management
(C) A and B
(D) Government
(15) Which of the following statements is/are true or false about continuous audit?
I. It is conducted regular/irregular interval throughout the year.
II. It shall be carried out on a daily basis.
III. It is needed when the organization has a good internal control system.
IV. It is not expensive.
(A) True, False, False, True
(B) True, True, True, True
(C) True, False, False, False
(D) True, True, False, True
(16) Standards on Auditing(SAs) is to be applied
(A) to engagements to apply agreed upon procedures
(B) in the review of historical financial information
(C) in the audit of historical financial information
(D) in engagements dealing with subject matters other than historical financial information
(17) _______ are such errors the existence of which becomes apparent in the process of _______.
(A) Self-revealing error, observation
(B) Self-revealing errors, compilation of accounts
(C) Errors of omission, compilation of accounts
(D) Errors of omission, observation
(18) According to SA 230 the form and content of working papers are affected by:
(A) The nature and complexity of the client's business.
(B) The nature of the engagement
(C) The nature and condition of the client's records and degree of reliance on internal controls.
(D) All of the above
(19) Sufficiency is the measure of the _______ of audit evidence obtained whereas appropriateness of audit evidence implies its _______
(A) quantity, relevance and reliability
(B) quantity, accuracy
(C) reliability, quantity
(D) relevance, quantity
(20) Which of the following are the basic principles governing audit
I. Audit Planning, Audit Evidence
II. Confidentiality, Skill and competence
III. Work Performed by others,
IV. Independence, Integrity, objectivity
(A) II, I, IV
(B) I, III, IV
(C) II, III, IV
(D) I, II, III, IV
(21) Match the following:
|
a. Auditing of historical financial statement |
I 4000-4699 |
|
b. Applied in other related Services |
II 100-999 |
|
c. Review of historical financial statement |
III 2000-2699 |
|
d. Applied in assurance engagements |
IV 3000-3699 |
(A) a.- III, b.- IV, c.- I, d.- II
(B) a.- IV, b.- II, c.-III, d.-IV
(C) a.- lI, b.- I, c.- III, d.- IV
(D) a.- I, b.- IV, c.- II, d.- III
(22) According to SA 240 a financial audit is conducted by the auditor to obtain _______ assurance that financial statements are free from _______ caused by fraud and/ or error.
(A) absolute, material statements
(B) reasonable, material statements
(C) reasonable, material misstatements
(D) absolute and reasonable, material misstatements
(23) M/s Swaraj Express purchase goods worth Rs. 5,00,000 has been recorded as furniture purchase is a/an _______.
(A) error of principle
(B) trial balance error
(C) compensating error
(D) error of commission
(24) The records of audit procedures performed, relevant audit evidence obtained and the conclusions the auditor reached is termed as _______.
(A) Audit observation
(B) Audit documentation
(C) Audit planning
(D) Permanent audit file
(25) _______ is an outline of all procedures to be followed in order to arrive at an opinion concerning client's financial statements.
(A) Audit notebook
(B) Audit programme
(C) Audit evidence
(D) Audit files
(26) Which of the following will be to consider as a diary in which auditor scribble down all important inquiries in order to avoid the possibility of unquestioned material facts?
(A) Audit Notebook
(B) Audit Working papers
(C) Audit Evidence
(D) Audit Evidence and Working papers
(27) Match the following:
|
a. Checking Mathematical accuracy |
I. Observation |
|
b. Independent execution of procedures and control |
II. Re-performance |
|
c. Seeking information from knowledgeable persons |
III. Re-calculation |
|
d. Looking at a process or procedure |
IV. Inquiry |
(A) a - ll, b - IV, c - I , d - III
(B) a - III, b - II, c - IV, d - I
(C) a - I, b - IV, c - II, d - III
(D) a - IV, b - Il, c - III, d - I
(28) Which of the following is/are advantage/s of audit programme
I. shields inefficient staff
II. provides clear-cut instructions
III. Helps in assessing progress of work
(A) I, III
(B) I, II
(C) I
(D) II, III
(29) As per SA-200 "Overall Objectives of the Independent Auditor," in conducting an audit of financial statements, the overall objectives of the auditor is/are:
(A) To obtain reasonable assurance
(B) To report on true and fair view on the financial statements
(C) A and B
(D) Neither A nor B
(30) Auditing engagement can be performed with respect to
(A) Non-profit making entity
(B) Profit making entity
(C) Corporate entity only
(D) any entity
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