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Auditing MCQ Questions and Solutions with Explanations | Commerce

Auditing MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Auditing MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-8 section-2

Each section contains 100 MCQs on Auditing .
71
While observing a client's annual physical inventory, an auditor conducted test counts for certain test counts were higher than the recorded quantities in the client's perpetual records. This situation could be the result of the client's failure to record:
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Answer & Solution
Answer: Option B
No explanation is given for this question. Let's Discuss on Board
72
If in a company, the work of one person is complementary to the work of another, then it is related to
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Answer & Solution
Answer: Option C
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73
Which of the following is NOT a reason for fraud?
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Answer & Solution
Answer: Option D
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74
Test checking should not be applied to-
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Answer & Solution
Answer: Option D
No explanation is given for this question. Let's Discuss on Board
75
Which of the following is a primary voucher:
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Answer & Solution
Answer: Option A
Solution:
Primary vouchers are those original documents that serve as the main and direct evidence of a business transaction.

They are the first or original source documents that record the occurrence of a transaction and provide proof for entries made in the books of accounts.

An invoice is a classic example of a primary voucher because it is the original document issued by the seller to the buyer showing details such as the goods sold, quantity, price, and total amount payable.

Carbon copies of receipts and counterfoils are not primary vouchers; they are considered secondary vouchers since they are duplicates or internal copies used for record-keeping and reference purposes.

Therefore, the document that qualifies as a primary voucher is the invoice.

Hence, the correct answer is Option A: Invoice.
76
Which of the following audits is exclusively done by Company Secretary?
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Answer & Solution
Answer: Option D
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77
Auditor has to submit the audit report to:
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Answer & Solution
Answer: Option C
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78
A company has bought patents. Which of the following methods is most suitable for providing depreciation on them?
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Answer & Solution
Answer: Option A
No explanation is given for this question. Let's Discuss on Board
79
Cost audit of a company under Section 233 B can presently be conducted by
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Answer & Solution
Answer: Option C
No explanation is given for this question. Let's Discuss on Board
80
If a company auditor does something inappropriate in his performance of duty which causes the financial loss to the company, he shall be held guilty
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Answer & Solution
Answer: Option A
Solution:
Civil negligence occurs when a person, such as an auditor, fails to exercise the level of care and skill that a reasonably competent professional would be expected to apply in similar circumstances.

In the case of an auditor, if he performs his duties carelessly or without following proper auditing standards, and such negligence results in financial loss to the company, he can be held guilty of civil negligence.

This type of negligence does not imply criminal intent but represents a failure to meet professional obligations and due care expected under civil law.

Breach of duty is a broader concept that includes any failure to fulfill assigned responsibilities, whereas civil negligence specifically refers to such a failure caused by lack of due diligence or professional care.

Criminal negligence involves reckless or intentional misconduct leading to harm, which is more severe and not typically applicable to auditing errors.

Financial irregularities refer to errors or frauds in financial records, not the auditor’s failure to detect them.

Therefore, when an auditor’s improper actions or omissions cause financial loss to the company, he is held guilty of civil negligence.

Hence, the correct answer is Option A: Civil Negligence.