Exam-preparation4u: TYBCOM SEM 5 || Audit and Assurance MCQS

TYBCOM SEM 5

Unit 1

Audit and Assurance

Nature and objectives of scope of Audit

1. ----------- along with other disciplines such as accounting and law, equips you

with all the knowledge that is required to enter into auditing as a profession.

(a) Auditing

(b) Taxation

(d) Taxation and Finance both

2. No business or institution can effectively carry on its activities without the help of

proper ------------- :

(a) Audit

(b) Record and accounts

(d) both (a) and (b)

3. As per SA-200 “Overall Objectives of the Independent Auditor”, in conducting an

audit of financial statements, the overall objectives of the auditor are:

(a) To obtain reasonable assurance

(b) To report on the financial statements

(d) none of the above

4 (IESBA Code) related to an audit of financial statements establishes which of the

following as the fundamental principles of professional ethics relevant to the

auditor when conducting an audit of financial statements :

(a) Integrity;

(b) Objectivity;

(d) All of the above

5. The auditor’s _________ safeguards the auditor’s ability to form an audit opinion

without being aff ected by any influences.

(a) Objectivity

(b) Independence

(d) Integrity

6. The main object of an audit is ___

a) Expression of opinion

b) Detection and Prevention of fraud and error

c) Both (a) and (b)

d) Depends on the type of audit

Answers to MCQs

1. (a) 2. (b) 3. (c) 4. (d) 5. (b) 6.(D) 7.(

Unit 2

Audit stretegy, Audit planning And

Audit program

1. The audit plan is ______detailed than the overall audit strategy

(a) Less

(b) More

(d) none of the above

2. Planning is _____ process of an audit that often begins shortly after (or in connection

with) the completion of the previous audit and continues until the completion of

the current audit engagement:

(a) continuous

(b) discreet

3. The auditor shall develop an audit plan that shall include a description of:

(a) The nature, timing and extent of planned risk assessment procedures

(b) The nature, timing and extent of planned further audit procedures at the

assertion level.

engagement complies with SAs.

(d) All of the above

4. With reference to SA 300, the auditor shall document:

(a) The overall audit strategy

(b) The audit plan

audit strategy or the audit plan, and the reasons for such changes.

(d) All of the above

5. The overall audit strategy and the audit plan remain the ____ responsibility.

(a) auditor’s

(b) management’s

(d) All of the above

6. Determining a percentage to be applied to a chosen benchmark (in relation to

materiality) involves the exercise of ___________

(a) Independence

(b) Professional Judgement

(d) All of the above

Answers to MCQs

1. (b) 2. (a) 3. (d) 4. (d) 5. (a) 6. (b)

1. ______________refers to the record of audit procedures performed, relevant

audit evidence obtained, and conclusions the auditor reached.

(a) Audit Techniques

(b) Audit evidence

(d) None of the above

2. ____________may be defined as one or more folders or other storage media, in

physical or electronic form, containing the records that comprise the audit

documentation for a specific engagement.

(a) Audit File

(b) Audit evidence

(d) both (a) and (b) above

3. As per SQC-1 “An appropriate time limit within which to complete the

assembly of the final audit file is ordinarily not more than ______days after the

date of the auditor’s report”.

(a) 30

(b) 60

(d) 45

4. A request that the confirming party respond directly to the auditor only if the

confirming party disagrees with the information provided in the request.

(a) Positive confirmation request

(b) Non Response

(c ) Negative Confirmation request

(d) Exception

5. Auditor’s judgment as to sufficiency may be affected by which factor:

(a) Materiality

(b) Risk of material misstatement

(d) All of the above

6. Which of the following is not an Audit procedures to obtain audit evidence :

(a) Inspection

(b) Observation

(d) None of the above

7. Which of the following is not an assertion about presentation and disclosure:

(a) Occurrence and rights and obligations

(b) Completeness

(d) Existence

Answers to MCQs

1. (c) 2. (a) 3. (b) 4. (c) 5. (d) 6. (d)

7. (d)

AUDIT AND ASSURANCE

MID SEMESTER EXAMINATION

MCQS - 2019

(1) _______ Job is analytical and critical in nature and require auditor's time, energy, attention and patience,

(A) Accounting

(B) Investigation

(C) Auditing

(D) Negotiating

(2) Standards on Quality Control (SQC)-1 requires working papers to be retained for _______ from the date of auditor's report.

(A) maximum 7 years

(B) maximum 8 years

(C) at least 7 years

(D) at least 8 years

(3) Normally, the auditor finds it necessary to rely on audit evidence that is _______.

(A) Inconclusive

(B) Probable

(C) Persuasive

(D) All of the above

(4) As Per SA 500, _______ is information used by the auditor in arriving at the conclusions on which the auditor's opinion is based.

(A) Audit evidence

(B) Audit report

(D) Audit programme

(5) Arrange the following stages, an auditor has to undergo for the perfomance of an audit.

I. Obtain Knowledge about business of his client

II. Obtain an appointment letter

III. Examination of the financial infomation of an entity

IV. Issuing an audit report

(A) III, I, IV, II

(B) I, II, III, IV

(C)I, III, II, IV

(D) II, I, III, IV

(6) Which of the following is/are the example/s of audit documentation

I. audit programme

II. memoranda

III. letter of confirmation

IV. bank reconciliation statement

(A) III, I, IV, II

(B) I, II, III, IV

(C)I, III, II, IV

(D) II, I, III, IV

(6) Which of the following is/are the example/s of audit documentation

I. audit programme

II. memoranda

III. letter of confirmation

IV. bank reconciliation statement

(A) I, II, III, IV

(B) I, II, IV

(D) I, III, IV

(7) Star Mission Private Limited having turnover of Rs. 2.20 crores is required to carry out

I. Energy Audit

II. Statutory Audit

IlI. Internal Audit

IV. Tax Audit

(A) II, III, IV

(B) IV

(C) II, IV

(D) I, II, III

(8) Factors to be considered while planning an audit of financial statements are_______.

(A) Size and complexity of business

(B) Previous experience of key engagement team members

(C)Changes in circumstances during the audit engagement

(D) All of the above

(9) The factor which distinguishes an error from fraud and other irregularity is

(A) Whether it is caused by the auditor or the client

(B) Materiality

(D) Intention

(10) Which of the following is not a method of obtaining audit evidence?

(A) Accounting Statistics

(B) Reperformance

(C) Analytical procedures

(D) Observation

(11) Current audit file relating to audit of a laxmi Enterprise Limited will not contain

I. Latter of balance Confirmation.

II. Audit Programmme

III. No objection Certificate of previous auditor

IV. Analysis of significant ratios and trends.

(A) I, II

(B) III, IV

(D) II, III

(12) Which of the following is an advantage of the preparation of working paper

I. To provide a guide for advising another client on similar issues

II. To provide a basis for subsequent audits

III. To provide a basis for review of audit work

IV. To ensure audit work is being carried out as per programme

(A) II, III, IV

(B) I, II, III, IV

(D) I, II, III

(13) One or more folders or other storage media, in physical or electronic form, containing the records that comprise the audit documentation for a specific engagement is called _______.

(A) audit working papers

(B) audit notebook

(D) audit file

(14) The primary responsibility under SA 240, the prevention and detection of frauds rests with

(A) those charged with governance

(B) Management

(C) A and B

(D) Government

(15) Which of the following statements is/are true or false about continuous audit?

I. It is conducted regular/irregular interval throughout the year.

II. It shall be carried out on a daily basis.

III. It is needed when the organization has a good internal control system.

IV. It is not expensive.

(A) True, False, False, True

(B) True, True, True, True

(C) True, False, False, False

(D) True, True, False, True

(16) Standards on Auditing(SAs) is to be applied

(A) to engagements to apply agreed upon procedures

(B) in the review of historical financial information

(C) in the audit of historical financial information

(D) in engagements dealing with subject matters other than historical financial information

(17) _______ are such errors the existence of which becomes apparent in the process of _______ .

(A) Self-revealing error, observation

(B) Self-revealing errors, compilation of accounts

(D) Errors of omission, observation

(18) According to SA 230 the form and content of working papers are affected by:

(A) The nature and complexity of the client's business.

(B) The nature of the engagement

(D) All of the above

(19) Sufficiency is the measure of the _______ of audit evidence obtained whereas appropriateness of audit evidence implies its _______

(A) quantity, relevance and reliability

(B) quantity, accuracy

(D) relevance, quantity

(20) Which of the following are the basic principles governing audit

I. Audit Planning, Audit Evidence

II. Confidentiality, Skill and competence

III. Work Performed by others,

IV. Independence, Integrity, objectivity

(A) II, I, IV

(B) I, III, IV

(D) I, II, III, IV

(21) Match the following:

a. Auditing of historical financial statement	I 4000-4699
b. Applied in other related Services	II 100-999
c. Review of historical financial statement	III 2000-2699
d. Applied in assurance engagements	IV 3000-3699

(A) a.- III, b.- IV, c.- I, d.- II

(B) a.- IV, b.- II, c.-III, d.-IV

(C) a.- lI, b.- I, c.- III, d.- IV

(D) a.- I, b.- IV, c.- II, d.- III

(22) According to SA 240 a financial audit is conducted by the auditor to obtain _______ assurance that financial statuments are free from _______ caused by fraud and/ or error.

(A) absolute, material statements

(B) reasonable, material statements

(C) reasonable, material misstatements

(D) absolute and reasonable, material misstatements

(23) M/s Swaraj Express purchase goods worth Rs. 5,00,000 has been recorded as furniture purchase is a/an _______ .

(A) error of principle

(B) trial balance error

(C) compensating error

(D) error of commission

(24) The records of audit procedures performed, relevant audit evidence obtained and the conclusions the auditor reached is termed as _______.

(A) Audit observation

(B) Audit documentation

(D) Pemanent audit file

(25) _______ is an outline of all procedures to be followed in order to arrive at an opinion conceming client's financial statements.

(A) Audit notebook

(B) Audit programme

(C) Audit evidence

(D) Audit files

(26) Which of the following will be consider as a diary in which auditor scribble down all important inquiries in order to avoid the possibility of unquestioned material facts?

(A) Audit Notebook

(B) Audit Working papers

(D) Audit Evidence and Working papers

(27) Match the following:

a. Checking Mathematical accuracy	I. Observation
b. Independent execution of procedures and control	II. Re-performance
c. Seeking information from knowledgeable persons	III. Re-calculation
d. Looking at a process or procedure	IV. Inquiry

(A) a - ll, b - IV, c - I , d - III

(B) a - III, b - II, c - IV, d - I

(D) a - IV, b - Il, c - III, d - I

(28) Which of the following is/are advantage/s of audit programme

I. shields inefficient staff

II. provides clear-cut instructions

III. helps in assessing progress of work

(A) I, III

(B) I, II

(D) II, III

(29) As per SA-200 "Overall Objectives of the Independent Auditor," in conducting an audit of financial statements, the overall objectives of the auditor is/are:

(A) To obtain reasonable assurance

(B) To report on true and fair view on the financial statements

(C) A and B

(D) Niether A nor B

(30) Auditing engagement can be performed with respect to

(A) Non-profit making entity

(B) Profit making entity

(D) any entity

MID SEMESTER EXAMINATION

AUDIT & ASSURANCE

MCQs - OCTOBER 2018

1. Which of the following is not an advantage of the preparation of working papers?

I. To provide a guide for advising another client on similar issues

II. To provide a basis for subsequent audits

III. To help in preparation of daily accounting work

IV. To ensure that employee records the transactions timely

A. I, II, IV

B. II, III

C. I, III, IV

D. II, IV

2. Record of communication with regards to disbursement of loan including regards to disbursement of loan including terms and conditions for sanctioning of loaf for tenure of 10 years are documented in

A. Audit note book

B. Audit Working papers

C. Current audit file

D. Permanent audit file

3. Which of the following is/are incorrect?

I. internal auditor need not be a chartered accountant

II. Internal auditor is always an employee of the organization

III. Internal auditor reports to the management

A. I, III

B. II,III

C. I, II

D. II

4. As per SA 240 the primary responsibility for the prevention and detection of fraud rests with _______

I. Auditor

II. Management

III. Those charges with governance of entity

IV. Audit assistant

A. II, III

B. I, II, III

C. I

D. III, IV

5. An Audit programme is

A. list of the power to be used by auditor.

B. Guidance to the audit team as to the work to be performed.

C.A device to facilitate the audit of computer system

D. The record on which balance sheet to be summarised by the auditor.

6. Audit evidence is defined as _______ used by the auditors in arriving at the conclusions on which the auditor's opinion is based.

A. information

B. retiring auditor's communication

C. Management Communication

D. Letter

7. Which of the following statements is/are true or false about continuous audit?

I. It is conducted at regular/irregular intervals throughout the year.

II. It is carried throughout the year.

III. It shall be carried out by the internal auditor only.

IV. It is expensive.

A. True, True, False, True

B. False, True, False, False

C. True, False, True, True

D. False, True, True, False

8. Current working paper file relating to audit of a partnership fim will contain

I. Confirmation from the bank for the balance of fixed deposit

II. Copy of partnership deed

III. Analysis of transactions and balances

IV. Organisational structure of the client

A. I, IV

B. II, IV

C. II, III

D. I, III

9. The auditor should obtain _______ audit evidence for the purpose of expressing an opinion.

A. sufficient and appropriate

B. External

C. internal and periodical

D. Legal and relevant

10. What is/ are the advantages of audit

I. Settlement of disputes

II. Keeps accounts department vigilant

III. Regret in processing of loan by the bankers

IV. Acceptability by the authorities

A. I, II, III, IV

B. I, II, IV

C. III, IV

D. I, II, III

11. Fortune private limited commences the trading business and have turnover

Rs. 2,15,00,000 for the year 2017-18 Out of the following, which of the types of audit is/are mandatorily applicable?

I. Social Audit

II. Tax Audit

III. Statutory Audit

IV. Energy Audit

A. II, III

B. III

C. III, IV

D. I, II, III

12. ______ is a process to examine the effect-good or bad-of the operation of an enterprise with its surroundings.

A. Interim Audit

B. Cost Audit

C. Energy Audit

D. Environmental Audit

13. Labor charges paid at the time of installation of Plant and Machinery debited to repairs and maintenance account. This is error of

A. Principles

B. Commission

C. Compensating

D. Omission

14. Which of the following is/are the basic principles governing audit?

I. Confidentiality

II. Planning

III. Skill and competence

IV. Documentation

A. I, II, III, IV

B. I, III, IV

C. I, IV

D. II, IV

15. Financial statements of an entity need to be prepared in accordance with

I. Accounting standards issued by the Institute of Chartered Accountants of India

II. Approval of auditor only.

II. Guidance Notes issued by the Institute of Chartered Accountants of India

IV. Relevant statutory requirements

A. I, II, III, IV

B. I, III, IV

D. I, IV

C. II, IV

16. Consider and determine the following stages, an auditor has to undergo for planning of an audit.

I. Acquiring the knowledge of Accounting and Internal Control System

II. Acquiring the knowledge about business of his client

III. Determine the degree of reliance to be place on the internal control system

IV. Determine the nature, timing and extent of audit procedures

A. I, II, III, IV

B. II, I, III, IV

C. I, III, II, IV

D. III, I, IV, II

17. Who is the custodian authority for the audit working papers?

A. Board of Directors

B. Audit assistants and not auditor

C. Employee of the clients

D. Auditor

18. _______ represents audit evidence obtained by the auditor as a direct written response to the auditor from a third party.

A. External confirmation

B. Reperformance

C. Inquiry

D. Analytical Procedure

19. Which of the following is not an advantage of audit programme.

A. The audit work may become too mechanical

B. Uniformity in the performance of audit work is ensured

C. Progress of the work can be examined periododically

D. The responsibility for negligence can be fixed

20. Which of the following is/are not advantage/s of Continuous Audit.

I. Early detection of frauds and errors

II. Auditor is able to understand the technicalities of the business

III. Likely collusion between client's staff and auditor's staff

IV. It acts as a moral check on the staff of the client.

A. II, III

B. II, III, IV

C. II

D. III

21. The audit notebook is maintained by ______

A. audit assistants

B. accountants

C. Auditor himself only.

D. All of the above

22. Match the following

Standard on Auditing

Apply on agreed upon procedures

other than historical financial information

Standard on Review Engagements

Review of historical financial

Information

Audit of historical financial

information

A. 1 - II, 2 - III

B. 1 - III, 2 - II

C. 1 - II , 2 - III

D. 1 - III, 2 - I

23. As per SA 230 _________ is one or more folders or other storage media, in physical or electronic form, containing the records that comprise the audit documentation for a specific engagement.

A. Audit File

B. Audit working papers

C. Audit engagement letter

D. Audit Notebook

24. Match the following -

1.	Inspection	I.	Checking mathematical accuracy
2.	Observation	2.	Looking at the process and procedures
3.	Inquiry	1.	Examining records and documents
		3.	Seeking information of knowledgeable persons

A. 1 – Ill, 2 – lV, 3 – Il

B. 1 – Il, 2 – Ill, 3 – I

C. 1 – Ill, 2 – Il, 3 – IV

D. 1 – I, 2 – Ill, 3 – IV

25. _________ are such errors the existence of which becomes apparent in the process of compilation of accounts.

A. Self-revealing errors

B. Error of duplication

C. Error of omission

D. B and C

26. As per SA 240, a financial audit is conducted by the auditor to obtain _______ that the financial statements are free from material misstatement caused by fraud and/or error.

A. true and correct opinion
B. reasonable opinion
C. correct opinion
D. absolute opinion

27. Audit working papers refers to all the documents, _______ relating to primarily to set of accounts being audited.

A. gathered from internal parties.
B. gathered from external parties.
C. Prepared and gathered by management.
D. Prepared and gathered by auditor.

28. The form, content and extent of working papers depends on factors such as

I. The significance of the audit evidence obtained
II. The size and complexity of the entity.
III. The nature audit procedures to be performed

A. I, III
B. II III
C. I, II, III
D. I, II

29. Consider the following documents

1. Audit notebook
2. Audit report
3. Audit programme
4. Audit appointment Letter

What is the correct sequence in which the above documents are prepared?

A. 1,2,3,4
B. 4,3,1,2
C. 3,1,4,2
D, 2,3,1,4

30. Permanent working paper file normally includes

I. Bank Reconciliation Statement
II. Confirmation received from the client
III. Notes regarding significant accounting policies
IV. Description of the type of business carried on

A. I, III
B. III, IV
C. I, II
D. II, IV

MID SEMESTER EXAMINATION

AUDIT & ASSURANCE

MCQS - 2017

1. Match the following:

a. Standards on Auditing	I. 4000-4699
b. Standards on Related Services	II. 100-999
c. Standards on Review Engagements	III. 2000-2699
d. Standards on Assurance Engagements	IV. 3000-3699

A. a.-III, b.- IV, c.-I, d.-Il

B. a.-IV, b.-II, c.-III, d.-IV

C. a.-I, b.- IV, c.-II, d.-III

D. a.-Il b.- I, c.-III, d.-IV

2. Auditing job is ______ and ______ in nature and require auditors time, energy, attention and patience.

A. Planning and Testing

B. Analytical and Critical

C. Practical and Sophisticated

D. Experimental and Tedious

3. Normally, the auditor finds it necessary to rely on evidence that is ________.

A. Inconclusive

B. Probable

C. Persuasive

D. All of the above

4. An audit checklist is ________.

A. an organization chart of the clients' management structure.

B. a means of ensuring that all relevant items are examined

C. an internal control questionnaire.

D. an audit Programme

5. Which of the following are the basic principle governing audit

A. Audit planning, Audit Evidence

B. Confidentiality and Audit notebooks

C. Work performed by other, skill and competence

D. Independence, integrity, objectivity

A. I, II, III, IV

B. II, I, IV

C. I, III, IV

C. II, III, IV

6. A sales of Rs. 5,00,000 to Mr. Kavi was entered as sales to Mr. Ravi. This is an example of ________.

A. Error of omission

B. Compensating error

C. Error of principle

D. Error of commission

7. According to SA 230 the form and content of working papers are affected by

A. The nature and complexity of the client's business

B. The nature of the engagement

C. The nature and condition of the client's records and degree of reliance on internal controls.

D. All of the above

8. Records of communication with retiring auditor are documented in __________.

A. Permanent audit file

B. Audit note book

C. Audit Working papers

D. Current audit file

9. Secondary objective of audit is ________.

A. Detection and prevention of errors

B. Detection and prevention of frauds

C. Expression of independent opinion on accounts

D. Detection and prevention of errors & frauds

10. Purchase of factory furniture has been debited to general expense account it is error of

A. Omission

B. Commission

C. Compensating Error

D. Principle

11. Standards on Assurance Engagements is to be applied _______.

A. in the review of historical financial information

B. In the audit of historical financial information

C. to engagements to apply agreed upon procedures

D. in engagements dealing with subject matters other than historical financial information

12. Sufficiency is the measure of the ________ of audit evidence obtained whereas appropriateness of audit evidence implies its _________.

A. quantity, relevance and reliability

B. quantity, accuracy

C. relevance, quantity

D. reliability, quantity

13. Current Audit File relating to audit of a partnership firm will not contain _______.

A. Letters of confirmation

B. Audit Programme

C. Partnership Deed

D. Audit Plan

14. The main objective of _______ is to avoid or reduce income tax liability.

A. Partial secret Reserve

B. Window Dressing

C. Secret Reserve

D. None of the above

15. Goods returned by customer for Rs.5000/- were taken into stock but no entry was passed. It is ______.

A. an error of Omission

B. Compensating error

C. an error of principal

D. an error of Commission

16. Consider the following stages, an auditor has to undergo before commencing a new audit.

I. Ascertain the scope of the audit work.

II. Knowledge about business of his client

III. The agreement with the client

IV. Instructions to and information from client

A. II, I, III, IV
B. III, I, II, I
C. I, III, II, IV
D. I, II, III, IV

17. Factors to be considered while planning an audit of financial statements are _________.

A. Changes in circumstances during the audit engagement
B. Previous experience of key engagement team members
C. Size and complexity of business
D. All of the above

18. An Audit programme is _________.

A. The date on which balance sheet to be signed by the auditor.
B. the duties to be performed by auditor.
C. guidance to the audit team as to the work to be performed.
D. a device to facilitate the audit of computer system.

19. Which of the following statements is/are true or false about continuous audit?

I. It is conducted at regular/irregular intervals throughout the year,
II. It shall be carried out on a daily basis,
III. It is needed when the organization has a good internal control system,
IV. It is expensive.

A. True, False, False, True
B. True, False, True, True
C. True, True, False, True
D. True, True, True, True

20. What is the advantage of the continuous audit?

A. Chances of alterations of audited figure are more
B. Adjustment in Income and profit can be mode
C. The audit work is distributed evenly throughout the year
D. The auditor can help to write the book

21. Who will be the actual owner and custodian of working papers prepared for the purpose of audit?

A. Shareholders
B. Board of Directors
C. Auditor
D. Government

22. Which of the following will be consider as a diary in which auditor scribble down all important inquires in order to avoid the possibility of unquestioned material facts?

A. Audit Evidence
B. Audit Working papers
C. Audit Notebook
D. Audit Evidence and Working papers

23. Which of the following is not a method of obtaining audit evidence?

A. Accounting Statistics
B. Inspection
C. Observation
D. Computation

24. According to SA 240 a financial audit is conducted by the auditor to obtain ________ assurance that financial statements are free from material misstatements caused by fraud and/ or error.

A. absolute
B. Perfect
C. absolute and reasonable
D. Reasonable

25. Manipulation of accounts include ______.

A. Window dressing
B. Secret reserve
C. Secret reserve and window dressing
D. all types of error

26. Which of the following is not an advantage of the preparation of working paper?

A. To provide a basis for subsequent audits
B. To ensure audit work is being carried out as per programme
C. To provide a guide for advising another client on similar issues
D. To provide a basis for review of audit work

27. _______ are such errors the existence of which becomes apparent in the process of compilation of accounts.

A. Intentional error

B. Concealed error

C. Unintentional error

D. Self-revealing error

28. The wrong allocation of amount between capital and revenue expenditure is a/an ________.

A. compensating error

B. error of principle

C. error of commission

D. trial balance error

29. Which of the following will be helpful in determining the Scope of Audit Work and the extent of the auditor's responsibilities for conducting audit?

A. Audit engagement letter

B. Director's letter

C. Joining letter

D. Audit coverage letter

30. When accounts are prepared in such a manner that they indicate a much better and sound financial position of the business enterprise than in facts, it is known as

A. Partial secret Reserve

B. Secret Reserve

C. Window Dressing

D. None of the above

MID SEMESTER EXAMINATION

AUDIT & ASSURANCE

MCQS = 2010 - 11

1. _______ contains all real and nominal accounts

a) impersonal ledger

b) personal ledger

c) Purchase ledger

d) sales ledger

2. The creditors accounts generally have credit balance debit balance may be due to

a) Wrong debit to supplier account

b) Advance paid against an order

c) Goods returned

d) any of these

3. Sales to Mr. X for Rs. 11,000 correctly recorded in sales day book but wrongly

debited to X's Account as per Rs.10,500 this errors of _______

a) Errors of principle

b) Errors of omission

c) Compensating errors

d) Errors of commission

4. The main object of audit is ______

a) Expression of opinion

b) Detection & Prevention of fraud & error

c) Both A and B

d) Depends on type of audit

5. Figures may be altered in the account which have already been audited is the disadvantages of

a) Partial audit

b) Interim audit

c) Balance sheet audit

d) Final audit

6. Records of communication with retiring auditor are documented in

a) Per meant audit file

b) Audit working papers

c) Current audit file

d) Audit notebook

7. The current file of the auditors working papers generally include

a) A copy of financial statement

b) A flowchart of the internal control

c) Copies of bond & debentures

d) Organization chart

8. Manipulation of account to show better performance of management is called

a) Window dressing

b) Secret reserve

c) Employment fraud

d) Management fraud

9. Wages paid for installation of machinery charged to trading profit & loss is

a) Clerical errors

b) Errors of principle

c) Errors commission

d) Correct statement

10. Audit of bank is an example of

a) Balance sheet audit

b) Statutory audit

c) Consultant audit

d) All

11. Balance sheet audit includes verification of

a) Assets and liabilities

b) Income & expenses accounts where appropriate

C) Examination of adjusting and closing entries

d) All Above

12. Window dressing the bank overdraft is an example of

a) Understatement of liabilities

b) Manipulation of expenses

c) Overstatement of assets

d) None of these

13. Continuous audit is useful for

a) small concerns

b) Medium conches

c) Big concerns

d) None of these

14. All the papers pertaining to the year under audit are field in the

a) audit file

b) Per meant file

c) current file

d) All

15. _______ is the owner of working papers

a) owner of the film

b) Workers of the firm

c) Auditor

d) None of these

16. The benefit of __________ is likely to be enjoyed not only in the current year but also in some more years to come

a) Capital expenditure

b) Prepaid expenses

c) Revenue expenditure

d) Deferred revenue expenses

17. Assets which continuously decline in their value due to extraction or depletion are called

a) current Assets
b) Depreciable assets
c) Wasting assets
d) Fixed assets

MID SEMESTER EXAMINATION
AUDIT & ASSURANCE
MCQS = 2012 - 13

1. Bills payable means acknowledgement of

a) Debts payable
b) Bills receivable
c) Both a and b
d) None of these

2. Continuous audit is suitable for the organization ________

a) Where the final account are to be presented immediately after the close of
financial year
b) Where internal controls are not very effective
c) Where volume of transaction is very large
d) All

3. Installation charges of machinery wrongly debited to repairs and maintenance account this is error of _______

a) Principle
b) Compensating
c) Clerical
d) Duplication

4. Audit programme should be based on knowledge of the client's ______

a) Reputation
b) Profit
c) Net worth
d) Nature of business

5. Secret reserve means

a) Showing better position than actual
b) Showing losses
c) Showing worst position than actual
d) None of these

6. Which of the following is not recorded in audit note book?

a) Audit programme
b) Importance balance
c) Accounting statistics
d) Analysis of transaction and balance

7. Figures may be altered in the account which have already been audited is the disadvantages of

a) Interim audit
b) Partial audit
c) Final audit
d) Balance sheet audit

8. Manipulation of accounts to show better performance of management is

a) Management fraud
b) Secret reserve
c) Employment fraud
d) Window dressing

9. Misappropriating one of the amounts out of two or three identical receipts and
crediting the accounts of first customer by the receipt from second customer. This
process is called

a) Window Dressing
b) Teeming & Lading
c) Compensating error
d) None of these

10. Audit of accounts of Joint Stock Company is compulsory under the ______ Act

a) Income tax act 1961
b) Institute of Chartered Accountant Act, 1949
c) Partnership act 1932
d) Companies act 1956

11. An audit programme is ________

a) The date on which balance sheet to be signed by the auditor
b) The duties to be performed by the auditor
c) A devise to facilitate the audit of computer system
d) Guidance to the audit team as to the work to be performed

12. Assets which continuously decline in their value due to extraction or depletion are called

a) Wasting assets
b) Depreciable assets
c) Fluctuating assets
d) Circulating asset

Exam-preparation4u

TYBCOM SEM 5 || Audit and Assurance MCQS

TYBCOM SEM 5

Unit 1

Audit and Assurance

Unit 2

Audit stretegy, Audit planning And

Audit program

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