Auditing MCQ Questions and Solutions with Explanations

51

Limitation of auditing is-

A) that it does not reveal complete picture of business B) that it does not guarantee accuracy of accounts C) that auditor may by biased D) all the above

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Answer & Solution

Answer: Option D

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52

Audit of banks is an example of:

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

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Answer & Solution

Answer: Option D

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53

The auditor should examine subsequent realization of revenue such as dividends, interest, commission, etc. to:

A) Identify cases of unrecorded revenue B) Ensure proper disclosure in the balance sheet C) Recomputed accrued income on the data of balance sheet D) Any of these

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Answer & Solution

Answer: Option A

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54

Latin word "audire" means

A) To adjust B) To dare C) To hear D) To here

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Answer & Solution

Answer: Option C

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55

Which of the following is related to internal checking?

A) The accounting records are checked by internal people B) Assets verification is done internally C) The work of one person is automatically checked by other person D) The work of each person is checked internally

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Answer & Solution

Answer: Option C

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56

Audit working papers is an assets of:

A) A client B) Auditor C) Both A and B D) Company Law Board

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Answer & Solution

Answer: Option B

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57

Management audit otherwise called as . . . . . . . .

A) Final Audit B) Efficiency Audit C) Cost Audit D) Cash Audit

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Answer & Solution

Answer: Option B

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58

Which of the following statements is NOT correct regarding the duties of an auditor?

A) Physical verification of fixed assets is primarily the responsibility of the auditor B) Ownership of fixed assets should be verified by examining the title deed by the auditor C) Auditor should ascertain that the assets are in the possession of the client D) The auditor should satisfy himself that the assets have been valued in the financial statements according to the accounting principles

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Answer & Solution

Answer: Option A

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59

Internal check is done for

A) Helping audit in depth B) Prevention of frauds C) Detection of frauds D) None of these

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Answer & Solution

Answer: Option B

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60

Proper segregation of duties reduces the opportunities in which a person would both:

A) Establish controls and executes them B) Records cash receipts and cash payments C) Perpetuate errors and frauds and conceals them D) Record the transaction in journal and ledger

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Answer & Solution

Answer: Option C

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Auditing MCQ Questions and Solutions with Explanations | Commerce