Concepts of Auditing MCQs

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

  1. 1)

    Audit of banks is an example of –

    • A) Statutory audit
    • B) Concurrent audit
    • C) Balance sheet audit
    • D) All of the above

  2. 2)

    Concurrent audit is a part of

    • A) Internal check system
    • B) Continuous audit
    • C) Internal audit system
    • D) None

  3. 3)

    Audit in depth is synonymous for

    • A) Complete audit
    • B) Completed audit
    • C) Final audit
    • D) Detailed audit

  4. 4)

    Balance sheet audit includes verification of_

    • A) Assets
    • B) Liabilities
    • C) Income and expense accounts where appropriate
    • D) All of the above

  5. 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

  6. 6)

    Which of the following is not a fact of EPA?

    • A) Economic audit
    • B) Efficiency audit
    • C) Expenditure audit
    • D) Effectiveness audit

  7. 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

  8. 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

  9. 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

  10. 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