Audit & Assurance
MCQs
1. Plane should be made.
(a) By acquiring the knowledge of the client's business
(b) checking the adequacy of internal control
(c) Getting knowledge about accounting system, method and policies
(d) None of the above
2. For the user, the auditor's opinion is an assurance as of the future viability of the enterprise or the efficiency or effectiveness with which the management has conducted the affairs of the enterprise.
(a) True
(b) False
(c) Both
(d) None
3. Documentation is needed because.
(a) It aids in the supervision and review of the audit work.
(b) It aids in the planning and performance of the audit.
(c) Both A & B,
(d) None of the above
4. The form and content of documentation is
(a) Ready made
(b) Tailor made
(c) The need in particular circumstances for direction supervision and review of work performed by the assistants
(d) All of the above
5. Documentation will say to be as adequate if it is.
(a) properly organized and detailed
(b) Of every matter whether material or not
(c) Non standardized
(d) None of the above
6. Permanent nature audit file normally contains
(a) Appointment letter for the current year
(b) Memorandum and articles of association
(c) Management representation letter of current year
(d) Current year important abstracts of minutes of the meeting of the BOD
7. Current nature audit file normally contains
(a) Current year's audit findings
(b) previous year's audited significant findings
(c) Both A & B
(d) Can't say
8. Working papers are the property of.
(a) Management
(b) Auditor
(c) Shareholders
(d) None of the Above
9. The auditor should maintain his records relating to audit and other work done including routing correspondence and other papers for a minimum period of
(a) 5 years
(b) 8 years
(c) 10 years
(d) can't say
10. Consider the following stages, an auditor has to undergo before commencing a new audit __________.
1). Ascertain the scope of audit work and prepare an agreement with the client,
2). Preparing Audit program.
3). Obtain the Knowledge about the business of his client's
4). Audit conclusions and reporting
Select the correct answer using the codes given below:
(a) 1, 2, 3 And 4
(b) 1, 3, 2 And 4
(c) 2, 1, 3 And 4
(d) 3, 1, 2 And 4
11. _________ is necessary for an effective, efficient and timely audit
(a) Audit evidence
(b) Audit examination
(c) Audit planning
(d) All of the above
12. Documents collected during the statutory audit are the property of________.
(a) Management
(b) Shareholders
(c) Company Auditor
(d) None of the above
13. Consider the following document and arrange them in the correct sequence in which an auditor prepares these documents.
1. Working Papers
2. Audit Programme
3. Audit Report
(a) (2), (1), (3)
(b) (1), (2), (3)
(c) (3), (2), (1)
(d) (3), (1), (2)
14. A written plan containing the details regarding the conduct of a particular audit is called
(a) Audit Programme
(b) Audit Memorandum
(c) Audit Note Book
(d) None of these
15. Which of the following is content of permanent working paper file?
(a) Audit Programme
(b) Bank Reconciliation statement
(c) Confirmation letters
(d) None of the above
16. Audit programme is prepared by ____________.
(a) Auditor
(b) Client
(c) Audit Assistance
(d) Auditor and audit Assistants
17. The Working papers which auditor prepare for financial statement Audit are ________.
(a) Evidence for audit conclusions
(b) Owned by the client
(c) Owned by the auditor
(d) Retained in auditor's office until a change in auditors
18. Which of the following best describes the primary purpose of the audit programme preparation?
(a) To Detect errors and frauds
(b) To gather sufficient appropriate evidence
(c) To comply which GAAP
(d) To assess audit risk
19. Which of the following is not an advantage of the preparation of working paper
(a) To provide a basis for review of audit work
(b) To provide a basis for subsequent audits
(c) To ensure audit work is being carried out as programme
(d) To provide a guide for a guide for advantages another client a similar issues
20. The auditor's permanent working file should not normally includes ________.
(a) Extracts from client's bank statement
(b) Past year's financial statement
(c) Attorney's letters
(d) Debt agreements
21. For what minimum period should audit working papers retained by audit firm
(a) For a period of ten years
(b) For the period of the audit firm existence
(c) For a period auditor opines them to be useful in serving the clients
(d) None of above
22. The current file of auditor's working papers, generally should include
(a) A flow chart of internal control
(b) A copy of financial statement
(c) Organization charts
(d) Copies of bonds and debentures
23. All the papers pertaining to the year under audit are filed in the
(a) Permanent file
(b) Current file
(c) Audit file
(d) All the above
24. __________ is the owner of working papers.
(a) Auditor
(b) Owner of the firm
(c) Workers of the firm
(d) none of the above
25. __________ is the key element in planning, and determining the audit procedure.
(a) Audit planning
(b) Determination of audit procedure
(c) Collection of audit evidence
(d) None of the above
26. Planning includes
(a) Deciding the nature, timing and extent of then audit procedure to be applied
(b) Collection of proofs which are the basis for audit conclusions
(c) Determination of audit procedures to be applied
(d) A and C
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