Auditing MCQ Questions and Solutions with Explanations

1.
Consider the following elements:
1. Scope of audit
2. Validity of appointment
3. Knowledge about business
4. Instruction to client
5. Division of work among audit clerks
The correct sequence of these elements for the commencement of a new audit will be

A. 2, 1, 3, 4, 5

B. 1, 2, 3, 4, 5

C. 5, 1, 4, 3, 2

D. 4, 1, 3, 2, 5

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2.
Auditing and accounting are concerned with which of the following financial statements?

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 a thorough knowledge of accounting concepts and convention to enable opinion on financial statements

D. All of the above

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3.
What is the first stage of energy audit?

A. Survey

B. Report

C. Checking

D. Preparation

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4.
In how many days from the registration, the first Auditor of the Company be appointed?

A. 10

B. 20

C. 30

D. 60

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5.
Under which Section of Companies Act. The remuneration of the Auditor has been discussed?

A. Section 224 (2)

B. Section 224 (8)

C. Section 225

D. Section 231

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6.
Which of the following can be accepted as a supporting document?

A. Invoice/Challan

B. Debit note/Credit note

C. E-mails/letters

D. All of the above

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7.
A flow chart, made by the auditor, of an entity's internal control system is a graphic representation that depicts the auditor's:

A. Understanding of the system

B. Understanding of fraud risk factors

C. Documentation of assessment of control risk

D. Both A and C

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8.
The objective of the ordinary audit of financial statements is the expression of an opinion on

A. The fairness of the financial statements

B. The accuracy of the financial statements

C. The accuracy of the annual report

D. The balance sheet and income statement

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9.
Who requires a legal audit?

A. Sole trader

B. Partnership

C. Public limited company

D. Joint Hindu Family Business

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10.
If the auditor believes that the financial statements are fairly stated or is unable to reach and conclusion because of insufficient evidence, the auditor

A. Should withdraw from the engagement

B. Should request an increase in audit fees so that more resources can be used to conduct the audit

C. Has the responsibility of notifying financial statements, users through the auditor's report

D. Should notify regulators of the circumstances

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Auditing MCQ Questions and Solutions with Explanations | Commerce

1. Consider the following elements: 1. Scope of audit 2. Validity of appointment 3. Knowledge about business 4. Instruction to client 5. Division of work among audit clerks The correct sequence of these elements for the commencement of a new audit will be

Answer & Solution

2. Auditing and accounting are concerned with which of the following financial statements?

Answer & Solution

3. What is the first stage of energy audit?

Answer & Solution

4. In how many days from the registration, the first Auditor of the Company be appointed?

Answer & Solution

5. Under which Section of Companies Act. The remuneration of the Auditor has been discussed?

Answer & Solution

6. Which of the following can be accepted as a supporting document?

Answer & Solution

7. A flow chart, made by the auditor, of an entity's internal control system is a graphic representation that depicts the auditor's:

Answer & Solution

8. The objective of the ordinary audit of financial statements is the expression of an opinion on

Answer & Solution

9. Who requires a legal audit?

Answer & Solution

10. If the auditor believes that the financial statements are fairly stated or is unable to reach and conclusion because of insufficient evidence, the auditor

Answer & Solution

Read More Section(Auditing)

1.
Consider the following elements:
1. Scope of audit
2. Validity of appointment
3. Knowledge about business
4. Instruction to client
5. Division of work among audit clerks
The correct sequence of these elements for the commencement of a new audit will be

2.
Auditing and accounting are concerned with which of the following financial statements?

3.
What is the first stage of energy audit?

4.
In how many days from the registration, the first Auditor of the Company be appointed?

5.
Under which Section of Companies Act. The remuneration of the Auditor has been discussed?

6.
Which of the following can be accepted as a supporting document?

7.
A flow chart, made by the auditor, of an entity's internal control system is a graphic representation that depicts the auditor's:

8.
The objective of the ordinary audit of financial statements is the expression of an opinion on

9.
Who requires a legal audit?

10.
If the auditor believes that the financial statements are fairly stated or is unable to reach and conclusion because of insufficient evidence, the auditor