Auditing MCQ Questions and Solutions with Explanations

1

Which of the following affects audit effectiveness?

A) Risk of over reliance B) Risk of incorrect rejection C) Risk of incorrect acceptance D) Both A and C

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Answer & Solution

Answer: Option D

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2

The first annual general meeting of the company must be held

A) within 3 months from the date of closing of first financial year of the company B) within 6 months from the date of closing of first financial year of the company C) within 9 months from the date of closing of first financial year of the company D) None of these

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Answer & Solution

Answer: Option C

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3

According to Section 226(3) of the Companies Act, 1956, the following persons are disqualified for appointment as an auditor of a company:

A) A debtor of a company B) An officer of a company C) An insolvent D) All the above

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Answer & Solution

Answer: Option D

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4

Which of the following Auditing Assurance Standard deals with Audit Planning?

A) AAS7 B) AAS8 C) AAS9 D) AAS3

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Answer & Solution

Answer: Option B

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5

Identify the odd one from the following

A) Routine clerk B) Instruction card clerk C) Disciplinary officer D) Inspector

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Answer & Solution

Answer: Option A

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6

When a transaction has not been recorded in the books of account either wholly or partially such errors are called . . . . . . . .

A) errors of commission B) errors of omission C) compensating error D) error of principle

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Answer & Solution

Answer: Option B

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7

Testing the truthness of the items appearing in the books of original entries is called vouching. This definition is given by

A) D. Paula B) Joseph Lancaster C) Batliboi D) Marshall

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Answer & Solution

Answer: Option C

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8

Assertion (A): Internal audit is required to be conducted by a qualified chartered accountant.
Reason (R): It is a tool of management.
Give the correct answer using the given option

A) Both A and R are correct and R is the correct explanation of A B) Both A and R are correct and R is not the correct explanation of A C) A is correct but R is wrong D) A is wrong but R is correct

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Answer & Solution

Answer: Option D

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9

Which of the following would give the assurance that debtors mentioned on the date of balance sheet actually exist?

A) Sending debtor's confirmation letters B) Reviewing subsequent collection C) Verify debtors against sales document D) Both A and B

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Answer & Solution

Answer: Option D

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10

Which of the following statement is not true regarding appointment of auditor by the Central Government?

A) Such powers have been conferred upon it by section 139(7) B) If a company fails to appoint an auditor at a general meeting C) If an auditor refuses to accept appointment, the powers of the Central Government can be exercised D) None of the above

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Answer & Solution

Answer: Option B

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Auditing MCQ Questions and Solutions with Explanations | Commerce