Auditing MCQ Questions and Solutions with Explanations

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Each section contains 100 MCQs on Auditing .

Which of the following statements is not correct regarding removal of first auditor before expiry of the term?

A) He is removed at a general meeting B) The shareholders are authorized to do so C) The approval of the Central Government is required for such removal D) None of these

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

Civil liability of an auditor implies liability for:

A) Misappropriation of cash B) Misappropriation of goods C) Fraud D) Misfeasance E) Not checking accounts properly

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

Which of the following is not an inherent limitation of internal control system?

A) Management override B) Collusion among employees C) Inefficiency of internal auditor D) Abuse of authority

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

A Statutory Auditor of a private limited company is duty-bound to submit his report to:

A) The financial institutions B) The Government through the Registrar of Companies C) The Managing Director of the Company D) The Shareholders of the Company in the Annual General Meeting

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

When auditing prepaid insurance, an auditor discovers that the insurance policy bond on building is not available for inspection. This may indicate:

A) No insurance has been undertaken for building B) Lien on building C) Insurance premium has not been paid D) Insurance premium paid but not recorded

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

The scope of internal audit is decided by the:

A) Shareholders B) Management C) Government D) Law

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

If the Board of Directors fails to appoint the first auditor, then the first auditor is appointed by

A) Company in its annual general meeting B) Central Government C) Registrar D) Company Law Board

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

Balance Sheet audit is useful when:

A) Concern is very large B) Concern is very small C) Internal check is weak D) No audit system exists

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

"Cost Audit" means:

A) Audit by a Cost Accountant B) Audit of Cost Account C) Auditing the Cost of Goods produced D) None of these

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

Floating assets are valued at:

A) Cost B) Market price C) Cost or market price whichever is lower D) Cost less depreciation

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

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Auditing MCQ Questions and Solutions with Explanations | Commerce