T.Y. B.COM
SEMESTER - 5
AUDIT & ASSURANCE
MCQs - SEPTEMBER 2016
1. Audit Plans should be based on knowledge of the client's
(A) Profits
(B) Net worth
(C) Business
(D) Reputation
2. The risk of fraud increases when
(A) The working capital is high
(B) The cash sales are high
(C) The auditors remain the same
(D) Management is in the hands of a single person
3. ________ papers is the link between the client's records and the auditor's report.
(A) New
(B) Working
(C) Loose
(D) Ruled
4. 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 that audit work is being carried out as per programme,
(D) To provide a guide for advising another client on similar issues.
5. Audit under statute means:
(A) An audit ordered by the Government,
(B) An audit where duties, rights etc. of the auditor are laid down by law,
(C) An audit ordered by the Courts,
(D) An audit under legal contract.
6. Which of the following is NOT the part falling in the General Preparation step for Preparation before commencement of Audit?
(A) Preparation of up to date records,
(B) Finalize the scope of work, type of audit, Audit fees etc.,
(C) Obtain appointment letter,
(D) Gather the knowledge of client's business.
7. ______ is a detailed statement giving full instructions, hints and guidance to audit staff as to how they should proceed with the work and make it dependable.
(A) Audit Programme
(B) Audit Working Papers
(C) Audit Notebook
(D) Audit Files
8. Which one of the following is NOT the Advantage of Audit Programme?
(A) It promotes the division of work over audit staff in a well-organized manner,
(B) The work may become too mechanical,
(C) It provides audit assistants with a clear set of instructions about their duties,
(D) It enables the auditor to keep constantly in touch with the work done and general progress of the audit
9. _______ is maintained by the audit assistants to note down all those unclear queries, which he may come across in the course of audit and on which he requires further clarification & explanation.
(A) Audit Programme
(B) Audit Working Papers
(C) Audit Files
(D) Audit Notebook
10. It has been rightly said that the auditor is often judged by character of _____ prepared by him or under his direction.
(A) Audit Notebook
(B) Audit Files
(C) Audit Working Papers
(D) Audit Programme
11. Following is the specimen copy of _______
|
Sr. no. |
Voucher No. |
Date |
Account Head |
Amount (RS) |
Queries / Remarks |
How Disposed of / Solved |
|
01 |
252 |
10/07/2015 |
Conveyance Expenses |
RS 150 |
1] Correct Amount is RS 1500 2] Authorised signature is missing |
1] Entry Rectified 2] Signature obtained |
(A) Audit Working Papers
(B) Audit Files
(C) Audit Programme
(D) Audit Notebook
12. The overall audit plan and the Audit programme is the responsibility of ________.
(A) Auditor
(B) Assistant of Auditor
(C) Accountant of Client
(D) Client
13. Adequate _________ helps to ensure that appropriate attention is devoted to important areas of the audit; ensure that potential problems are promptly identified and utilise the assistants properly.
(A) Audit Documentation
(B) Audit Planning
(C) Audit Evidence
(D) Work performed by others
14. Sales to Mr. A for Rs.11500 correctly recorded in sales day book but wrongly debited to A's Account as Rs.10500.This is error of _________.
(A) Error of Omission
(B) Error of Commission
(C) Error of Principle
(D) Compensating Error
15. An Auditor should __________.
(A) Surrender his working papers to the client at the end of the audit.
(B) Surrender his working papers to the client at the termination of his appointment with the client.
(C) Never give his working papers to the client.
(D) None of the above.
16. An audit 'conducted to a particular date within an accounting period' is known as _________.
(A) A Final Audit
(B) A continuous Audit
(C) An Interim Audit
(D) A procedural Audit
17. The Comprehensive and Constructive examination of a company's organizational structure, plans, policies and objectives, resources and use of manpower and physical facilities is
(A) Management Audit
(B) Internal Check
(C) Operational Audit
(D) Internal Audit
18. Manipulation of accounts to show better performance of management is called
(A) Secret Reserve
(B) Window dressing
(C) Management Fraud
(D) Employment fraud
19. Misappropriating one of the amounts out of two or three identical receipts and crediting the accounts of first customer by the receipt from second customer. This process is called
(A) Window Dressing
(B) Teeming & lading
(C) Compensating error
(D) None of the above
20. State which of the following statement is TRUE
(A) Auditing is a critical examination of books of account with a view to establish their accuracy and correctness
(B) Auditing of account is optional in case of a private limited company
(C) Auditing of accounts is optional in case of public limited company,
(D) Incorrect totaling of ledger account is an example of error of principle
21. Financial statements need to be prepared in accordance with:
(A) Relevant statutory requirements
(B) Accounting standards issued by the Institute of Chartered Accountants of India
(C) Guidance Notes issued by the Institute of Chartered Accountants of India
(D) All the above
22. Consider the following documents
1. Audit notebook
2. Audit report
3. Audit programme
4. Audit appointment Letter
What is the correct sequence in which the above documents are prepared?
(A) 1,2,3,4
(B) 3,1,4,2
(C) 2,3,1,4
(D) 4,3,1,2
23. Continuous Audit is suitable for the organization
(A) Where the final accounts are to be presented immediately after the close of financial year
(B) Where internal controls are not very effective
(C) Where volume of transaction is very large
(D) In case of All the above
24. Installation charges of machinery wrongly debited to repairs and maintenance account. This is error of ________.
(A) Principle
(B) Compensating Error
(C) Clerical Error
(D) Duplication Error
25. Which of the following is not recorded in audit note book?
(A) Audit programme
(B) Accounting statistics
(C) Important balances
(D) Analysis of transactions and balances
26. Figures may be altered in the accounts which have already been audited is the disadvantage of _________.
(A) Partial Audit
(B) Interim Audit
(C) Balance sheet Audit
(D) Final Audit
27. Goods returned by customer for Rs.5000/- were taken into stock but no entry was passed. It was ________.
(A) An error of Principle
(B) An error of Omission
(C) An error of commission
(D) None of these
28. In context of Qualities of a Good Auditor, Diligence refers to ________.
(A) Knowledge of relevant laws
(B) Honesty
(C) Extremely careful and meticulous
(D) Loyalty
29. Primary responsibility of prevention and detection of frauds is of the ______ as well as these charged with governance.
(A) Management
(B) Auditor
(C) Government
(D) Investor
30. In planning and performing examination, the _________ should take into consideration the risk of material misstatement of the financial information caused by error or fraud.
(A) Investor
(B) Auditor
(C) Government
(D) Management
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