71
The balance of cash in often between one to five per cent of total assets. Tick the most appropriate statement with regard to verification of cash in context of this:
A)
Cash in always material as materiality is qualitative concept
B)
No audit of cash is needed when, in auditor's opinion, cash is immaterial. Materiality is a relative concept
C)
The cash balance need only be audited if the balance is in overdraft
D)
Cash is to be verified if control risk is assessed as high
Answer & Solution
Answer: Option
A
72
The current file of the auditor's working papers, generally, should include:
A)
A flowchart of the internal controls
B)
Organisation charts
C)
A copy of financial statements
D)
Copies of bond and debentures
Answer & Solution
Answer: Option
C
73
According to Section 227(1) of Companies Act 1956, the auditor does not have the right-
A)
To sign the audit report
B)
To see the books, accounts and vouchers of company
C)
To obtain information and explanation
D)
To correct any wrong description
Answer & Solution
Answer: Option
D
74
Contents of Audit Report are given in companies Act under section:
A)
244
B)
255
C)
226
D)
227
Answer & Solution
Answer: Option
D
75
"Balance Sheet Audit" in India means the audit of:
A)
Balance Sheet and Profit and Loss Account items
B)
Balance Sheet items
C)
Assets items of Balance Sheet
D)
Liability items of Balance Sheet
Answer & Solution
Answer: Option
A
A)
By the managers of the organization
B)
By the employees of the organization
C)
By the auditors
D)
By shareholders
Answer & Solution
Answer: Option
C
77
Which of the following statements is not true with respect to management representations obtained as per AAS11?
A)
Authenticated copy of relevant minutes of meetings may be regarded as management representation
B)
It should always be in working
C)
It may be dated prior to the report date
D)
It should be addressed to the auditor
Answer & Solution
Answer: Option
B
78
The creditor's accounts, generally, have credit balance. Debit balance may be due to:
A)
Advance paid against an order
B)
Goods returned
C)
Wrong debit to supplier account
D)
Any of these
Answer & Solution
Answer: Option
D
79
Which of the following implies an enquiry into the valuation, ownership, title, existence and possession of assets?
A)
Vouching
B)
Verification
C)
Internal check
D)
Routine checking
Answer & Solution
Answer: Option
B
80
A Company Auditor may be removed by the
A)
Managing Director
B)
Board of Directors
C)
Shareholders in General Meeting
D)
None of the above
Answer & Solution
Answer: Option
C
