The main object of an audit is ___
- A) Expression of opinion
- B) Detection and Prevention of fraud and error
- C) Both (a) and (b)
- D) Depends on the type of audit.
Which of the following is not true about opinion on financial statements?
- A) The auditor should express an opinion on financial statements.
- B) His opinion is no guarantee to future viability of business
- C) He is responsible for detection and prevention of frauds and errors in financial statements
- D) He should examine whether recognised accounting principle have been consistently
A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of _
- A) Error of omission
- B) Error of commission
- C) Compensating error
- D) Error of principle
‘Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of _
- A) Error of principle
- B) Error of commission
- C) Error of omission
- D) Error of duplication
Which of the following statements is not true?
- A) Management fraud is more difficult to detect than employee fraud
- B) Internal control system reduces the possibility of occurrence of employee fraud and management fraud
- C) The auditor’s responsibility for detection and prevention of errors and frauds is similar.
- D) All statements are correct.
Both auditing and accounting are concerned with financial statements. Which of the following
- A) Auditing uses the theory of evidence to verify the financial information made available by Accountancy
- B) Auditing lends credibility dimension and quality dimension to the financial statements prepared by the accountant
- C) Auditor should have through knowledge of accounting concepts and convention to enable him to express an opinion on financial statements
- D) All of the above.
The risk of management fraud increases in the presence of :
- A) Frequent changes in supplies
- B) Improved internal control system
- C) Substantial increases in sales
- D) Management incentive system based on sales done in a quarter
Auditing standards differ from audit procedures in that procedures relate to
- A) Audit assumptions
- B) acts to be performed
- C) quality criterion
- D) methods of work
Which of the following factors likely to be identified as a fraud factor by the auditor?
- A) The company is planning a initial public offer of quality shares to raise additional capital for expansion.
- B) Bank reconciliation statement includes depositsintransit.
- C) Plant and machinery is sold at a loss.
- D) The company has made political contributions.
The most difficult type of misstatement to detect fraud is based on:
- A) Related party purchases
- B) Related party sales
- C) Related party sales
- D) Omission of a sales transaction from being recorded.