ACCOUNTING-WORLD: Concepts of Auditing MCQs

Concepts of Auditing MCQs

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

1)

Audit of banks is an example of –
- A) Statutory audit
- B) Concurrent audit
- C) Balance sheet audit
- D) All of the above
Right Answer is the option "D"

2)

Concurrent audit is a part of
- A) Internal check system
- B) Continuous audit
- C) Internal audit system
- D) None
Right Answer is the option "C"

3)

Audit in depth is synonymous for
- A) Complete audit
- B) Completed audit
- C) Final audit
- D) Detailed audit
Right Answer is the option "D"

4)

Balance sheet audit includes verification of_
- A) Assets
- B) Liabilities
- C) Income and expense accounts where appropriate
- D) All of the above
Right Answer is the option "D"

5)

Which of the following statements is not true about continuous audit?
- A) It is conducted at regular interval
- B) It may be carried out on daily basis
- C) It is needed when the organization has a good internal control system
- D) It is expensive
Right Answer is the option "C"

6)

Which of the following is not a fact of EPA?
- A) Economic audit
- B) Efficiency audit
- C) Expenditure audit
- D) Effectiveness audit
Right Answer is the option "C"

7)

Balance sheet does not include
- A) Verification of assets and liabilities
- B) Vouching of income and expense accounts related to assets and liabilities
- C) Examination of adjusting and closing entries
- D) Routine checks
Right Answer is the option "D"

8)

Which of the following statements is not correct about materiality?
- A) Materiality is a relative concept
- B) Materiality judgments involve both quantitative and qualitative judgments
- C) Auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of an informed decision maker who will rely on the financial statements
- D) At the planning state, the auditor considers materiality at the financial statement level only
Right Answer is the option "D"

9)

…..the audit risk,….. the materiality and ……the audit effort
- A) Lower, Higher, Lower
- B) Lower, Lower, Higher
- C) Higher, Lower, Lower
- D) Lower, Higher, Higher
Right Answer is the option "A"

10)

When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the
- A) Amount of known misstatement is documented in working papers
- B) Estimates of the total likely misstatement is less than materiality level
- C) Estimate of the total likely misstatement is more than materially level
- D) Estimates of the total likely misstatement cannot be made
Right Answer is the option "B"