Auditing Multiple Choice Questions#6

NOTE: Attempt all Questions to see the Result at the bottom of this page.

  1. 1)

    In determining the level of materiality for an audit what should not be considered?

    • A) Prior years errors.
    • B) The auditor remuneration.
    • C) Adjusted interim financial statement.
    • D) Prior year financial statements.

  2. 2)

    Analytical procedures issued in the planning stage of an audit, generally ___________.

    • A) helps to determine the nature, timing and extent of other audit procedures.
    • B) directs attention to potential risk areas.
    • C) indicate important aspects of business.
    • D) all of the above.

  3. 3)

    Of the following, which is the least persuasive type of audit evidence?

    • A) Bank statements obtained from the client.
    • B) Documents obtained by auditor from third parties directly.
    • C) Carbon copies of sales invoices inspected by the auditor.
    • D) Computations made by the auditor.

  4. 4)

    Computations made by the auditor.

    • A) the auditor.
    • B) the client.
    • C) the audit assistants.
    • D) the auditor and his audit assistants.

  5. 5)

    The working papers which auditor prepares for financial statements audit are _______ .

    • A) evidence for audit conclusions.
    • B) owned by the client.
    • C) owned by the auditor.
    • D) retained in auditor office until a change in auditors.

  6. 6)

    Which of the following best describes the primary purpose of audit programmed preparation?

    • A) To detect errors or fraud.
    • B) To comply with GAAP.
    • C) To gather sufficient appropriate evidence.
    • D) To assess audit risk.

  7. 7)

    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 per Programme.
    • D) To provide a guide for advising another client on similar issues.

  8. 8)

    The auditor permanent working paper file should not normally, include ________

    • A) extracts from clients bank statements.
    • B) past years financial statements.
    • C) attorney letters.
    • D) debt agreements.

  9. 9)

    Who is responsible for the appointment of statutory auditor of a limited company?

    • A) Directors of the company.
    • B) Members of the company.
    • C) The central government.
    • D) The state government.

  10. 10)

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

    • A) the shareholders in a general meeting.
    • B) the shareholders in the first annual general meeting.
    • C) the board of directors.
    • D) the central government.