Auditing MCQs
Auditing MCQs
AUDITING
4. The authenticity of financial statements is very essential and such authenticity of accounts
can be assured with the help of an-
a) Internal Audit b) Performance Audit
c) Independant Audit d) None of the above
5. Examination of books of accounts with supporting vouchers and documents in order to detect
and prevent error and fraud is the main function of-
a) Accountant b) Management
c) Company Director d) Auditing
6. Express an opinion on the financial or non financial areas is the goal of-
a) Accounting b) Managing c) Auditing d) None of the above
7. In the case of financial audit, a set of financial statements are said to be true and fair when they
are free of-
a) Error b) Fraud
c) Material Misstatements d) None of the above
11. Auditor has to report that accounts have been prepared as per GAAP and presents a ____
a) Correct view of business operantions
b) Authentic view of business operations
c) Both(a) and (b)above
d) true and fair view of business operation
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17. Review of internal contol system is very important for the auditor as the effectives of internal
control system will determine the extent of checking to be done by the -\
a) Accountant b) Management
c) Both accountant and management d) Auditor
18. The compliance test and substantive procedures performed by the auditor will determine the
effectiveness of
a) Management Accounting System b) Cost Accounting system
c)I nternal Audit system d)I nternal Control system
19. Auditor has to cpmpare the balance sheet and Profit and liss account or other statement with
the-
a) Bank statement b) Cash Book
c) Both (a) and (b) above d) Books of Accounts and supporting vouchers
20. The auditor has to give its opinion whether the financial statements depicts
a) Correct view of the accounts b) Acceptable view of the accounts
c) True and fair view of the state of affairs of organization
d) None of the above
21. It is because of audit the the owner will be satisfied about the
a) Profits of the organisation
b) Employees, customers and suppliers of the organization
c) Business operations and working of its various departments
d) None of the above
22. No one will try to commit an error or fraud as the accounts are subject to-
a) Scrutiny b) Internal control
c) Audit d) None of the above
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23. Auditing is very useful in obtaining the independent opinion of the auditor about-
a) Financial condition b) business condition
c) Profits/losses d) Business condition
25. Money can be borrowed easily on the basis of audited balance sheet from-
a) Private sources b) Creditors
c) Financial institutions d) Government
26. Generally auditing exercise on is based on test checking, Inferring a result on the basis of test
check always need not to be-
a) Fair b) Apparently correct
c) True d) None of the above
29. An audit cannot add exactness and certainty to financial statements when these factors ______
a) Do not exist b) Exists
c) Are not known d) None of the above
33. Primary responsibility for the adequacy of financial statement disclosures rest with the ______
a) Auditor
b) Management
c) Auditors Staff
d) Central Government
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36. Investigation implies systematic, critical and special examination of the records of a business
for a-
a) General purpose b) Unspecified purpose
c) Specific purpose d) None of the above
40.Auditing seeks-
a) Conclusive evidence b) Corroborative evidence
c) Both (a) and (b) above d) Persuasive evidence
Answers:
1 a 11 d 21 c 31 b
2 b 12 a 22 c 32 c
3 b 13 b 23 d 33 b
4 c 14 b 24 d 34 c
5 d 15 a 25 c 35 b
6 c 16 c 26 c 36 c
7 c 17 d 27 a 37 d
8 a 18 d 28 c 38 c
9 d 19 d 29 a 39 c
10 d 20 c 30 c 40 d
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11 Types of Auditing
2. Internal audit is an evaluation and analysis of the business operation conducted by the-
a) Accounting staff b) Managemene
c)I nternal audit staff d) External audit staff
12. The internal audit can pin point the person responsible for-
a) Errors b) Frauds
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14. The external auditor can rely on Internal auditor and there is no need of
a) Stautory audit b) Cost audit
c) Management audit d) Cent percent checking
16. The purpose of Internal audit is to provide suggestions for improvement of-
a) Accounting activities b) Audit activities
c) Employees activities d) Business activities
18. The internal audit staff can provide new ideas about-
a) Accounting matters b) Auditing matters
c) Legal matters d) Various business matters
19. The purpose of internal audit is to determine the proper use of-
a) Accouning staff b) Audit staff
c) Leegal staff d) Resources
21. The benefit of internal audit is that proper accounting system is-
a) Already being used b) Not being used
c) Introduced d) Not required
22. The benefit of internal audit is that there is better management of-
a) Accounting concern b) Auditing concern
c )Legal concern d) Business concern
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29. The auditor can suggest the way and means to improve the-
a) Accounting performance b) Auditing performance
c) Management performance d) Business performance
32. The auditor can go through the internal audit report at the time of-
a) Starting audit work b) Finishing audit work
c) Starting accounting work d) Finishing accounting work
37.Internal audit is a tool to use the resources in the best interest of the-
a)Accounting staff b)Audit staff
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43.In case of poor audit staff there is no guarantee that audited accounts are-
a)Full of errors b)Free from errors
c)Free from frauds d)Full of frauds
44.The limitation of internal audit is thatmanagement may not feel their responsibility in
completing the-
a)Accounts formalities b)Legal formalities
c)Audit formalities d)Compliance formalities
47.Section 224 of the Companies Act 1956 contains provisions regarding the appointment of the
a)Accountant b)Internal auditor
c)External auditor d)All of the above
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49.The secretarial audit is an effective tool for corporate compliance management. It helps to
detect non-compliance and to take-
a)Appropriate action b)Legal action
c)Corrective measures d)All of the above
50.Secretarial audit is essentially a mechanism to monitor compliance with the requirements of-
a)Company laws b)Mercantile laws
c)Stated laws d)Corporate laws
51.A compny secretary In Practice has been assigned the role of-------- under section2(2)(c)(v) of
the Company Secretaries Act,1980-
a)Internal auditor b)Company auditor
c)Statutory auditor d)Secretarial auditor
52.It is recommended that the -------- be carried out periodically(quarterly/half yearly)and adverse
findings if any, be communicated to the Board for corrective action-
a)Internal audit b)Statutory audit
c)Financial audit c)Secretarial audit
56.Cost audit is mandatory if in immediate previous year aggregate value of------- exceeds the
specified limits-
a)Total turnover b)Paid up capital
c)Net worth d)Total assets
57.The cost auditor has to judge, whether the planned expenditure is designed to give-
a)Good results b)Appropriate results
c)Targeted results d)Optimum results
58.The cost auditor has to judge ,whether the size and channels of expenditure were designed to
produce the-
a)Good results b)Better results
c)Best results d)optimum and targeted results
59.The cost auditor has to judge, whether the return from expenditure on capital as well as current
operations coluld be improved by-
a)New methods and techniques b)Scientific plans and a actions
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60.Cost audit is useful for the purpose of -------- and proper utilization of scarce resources-
a)Incresing profit b)Reducing cost
c)Cost control and cost reduction d)Optimum utilization
61. The objective of tax audit is to assist the ------ in making the correct income tax assessment of
the assessee concerned
a)Government b)Commissioner of income tax
c)CBDT d)Income tax authorities
62.The tax auditor has to specifically report on certain transactions which have an effect on the ---
------ of the assessee concerned and are,thus important to the tax authorities.
a)Income b)Profits
c)Income tax liability d)All of the above
63.Therre are certain features of co-operative which are similar to those of-
a)Sole proprietorships b)Partnership
c)Companies d)All of the above
64.As in the case of companies , in co-operative socities also,there is a --------of ownership from
management
a)Integration b)Seperation
c)Coordination d)None of the above
65.---------of trusts assures the creators of trust and /or those for whose benefit the trust is
created.(i.e.benificiaries)the financial statements of the trust are reliable.
a)Independent accounting b)Independent financial audit
c)Independent appraisal d)Independent internal audit
66.In many cases, it is specifically provided in the relevant law and/or in the trust deed that the ---
-----shall get the financial statements of the trust audited.
a)Owners b)Management
c)Members d)Trustees
67.In India the Income tax Act.1961,provides for non-Inclusion of certain incomes of-------- in
their taxable income-
a)Private trusts b)charitable trusts
c)Public trusts d)Educational and religious trusts
68.Many public trust ge their accounts audited pursuant to the requirement of the ---------
a) Companies Act b)Indian Trusts Act
c)Cooperative socities Act d)Income Tax Act,1961
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70.Auditor performs an audit to ensure that the customer has paid the appropriate premium for-----
-------- provided to him.
a)Benifit b)Assurance
c)Risk cover d)All of the above
71. At present ,partnership firms in India are ------- to get their financial statements audited.
a)Legally required b)Not legally required
c)Compulsorily d)None of the above
72. Still, many firms get their financial statements audited as auditied accounts helps in proper-
a)Maintainance of accounts b)Maintainance of assets and properties
c)Valuation of goowill,distribution of share of the deceased Partner to their legal heirs etc.
d)All of the above.
73. Sole proprietary concerns are------- to get their financial statements audited by independent
financial auditors.
a)Legally required b)Not legally required
c)Ethically required d)Not ethically required.
74.It is the duty of ------- to audit the receipts and expenditure of the union Government and State
Government
a)External (statutory auditor) b)Secretarial auditor
c)Government d)Comptroller and Auditor General of India (C&AG)
77.After the function audit, proper systems are put in place and gaps as identified are filled by
way of
a)Legal actions b)Corrective actions
c)Corroborative actions d)Compensatory actions
79.--------may take into account the anticipated benefits of aprogram relative to the actual
performance-
a)Targeted performance b)The performance audit
c)Planned performance d)Achieveable and standard performance
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90. In comparision to the independent auditors, an internal auditor is more likely to be concerned
with:
a)Cost accounting system b)Internal control system
c)Legal compliance d)Accounting system
Answers:
Question Ans Question Ans Question Ans Question Ans Question Ans
1 b 21 C 41 d 61 d 81 d
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2 c 22 D 42 d 62 c 82 a
3 a 23 D 43 b 63 c 83 b
4 d 24 D 44 c 64 b 84 b
5 a 25 C 45 c 65 b 85 b
6 d 26 C 46 c 66 d 86 c
7 d 27 c 47 c 67 c 87 d
8 c 28 a 48 d 68 b 88 d
9 c 29 d 49 c 69 c 89 c
10 d 30 c 50 c 70 c 90 b
11 d 31 d 51 d 71 b
12 d 32 a 52 d 72 c
13 d 33 b 53 a 73 b
14 d 34 d 54 d 74 d
15 d 35 d 55 d 75 d
16 d 36 d 56 c 76 d
17 a 37 d 57 d 77 b
18 d 38 b 58 c 78 d
19 d 39 d 59 d 79 b
20 c 40 a 60 C 80 d
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12 Tools of Auditing
2.The objective of the auditor is to plan the audit so that it will be performed in-
a)planned way and manner b)timely manner
c)Both(a)and(b) above d)an effective manner
3.While framing an audit plan auditor should ascertain his------ cast by various legislations on
him.
a)Limitations b)Duties and obligations
c)Rights and powers d)Terms of appointment and responsibiliteies
6.While preparing an audit plan due consideration may be given to the areas where there is any
change in-
a)Legal policies b)Audit policies
c)Accounting policies d) Management policies
7.It is important for the auditor to identify the areas which involves-----, so that the audit can be
planned in such a way that overall audit risk will be less.
a)Lesser audit risk b)Great audit risk
c)Inherent audit risk d)Zero percent audit risk
8.While laying down an audit plan the auditor shall assess the effectiveness of-
a)Accounting system b)System of internal controls
c)Both (a)and (b) above d)External controls on the operations of the entity
10.An audit programme is a set of --------- which are to be followed for proper execution of audit.
a)Orders b)Directions
c)Instructions d)Rules
11.The prepared audit program may be--------- if needed in accordance with the prevailing
circumstances.
a)Reviewed b)Revised
c)Rechecked d)Reconsidered
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15.Audit programme is documented in the --------,which are the official rrecord that contains the
planning and execution of the audit agreement.
a)Audit plan b)Action plan
c)Audit and action plan d)Audit working papers
16.Audit programmes helps in ensuring that all important areas are appropriately covered during.
a)Accounting b)Recording
c)Auditing d)Accounting and auditing
17.Audit programme helps in distributing the work among the assistants in accordance with the
level of their.
a)Qalifications b)Past knowledge
c)Expertise d)Competence and experience
18.Audit programme provides instructions to the audit staff and reduces scope for-
a)Understanding b)Misunderstanding
c)Negligence d)Liabilities
19.Audit programme helps in fixing the ------- for the work done among the audit staff as work
done may be traced back to the individual staff members.
a)Remuneration b)Liabilities
c)Ngligencies d)Responsibility
21.On completion of an audit-------------- serves the purpose of audit record which may be useful
for future reference.
a)Audit programme b)Audit working papers
c)Audit plan d)Audit notes
22.Each business has separate problems. So a single/same audit programme can not be laid down
for-
a) Each type of CA firms b) Each type of work
c) Each type of method d) Each type of business
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23.Audit programme kills the -------- of capable persons. Assistant can not suggest any
improvement in the plan.
a)Qualities b)Qualification
c)Efficiency d)initiative
24.The audit programme is ------- that it ignores many other aspects like internal contol.
a)Automational b)Mechanical
c)Professional d)Emotional
25.With the passage of time new problems arises during the audit may be ------- in the audit
Programme.
a)Looked b)Over looked
c)Under looked d)Ignored
27.The audit staff should be encouraged to draw attention of the -------- to any defects in the
programme.
a)Company b)Management
c)Accountant d)Auditor
28.------------ is an outline of how the audit is to be done,who is to do what work and within what
time.
a)Audit strategy b)Audit plan
c)Audit programme d)Audit methods
29.---------- refers to the method and means adopted by the auditor for collection and evaluatin of
audit evidence in different audit situation:
a)Audit evidence b)Audit tools
c)Audit planning d)Audit technique
32. Time, extent and -------- of audit depends upon effectiveness of internal control:
a)Nature b)Periodicity
c)Relevance d)Format
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34. The auditor has to obtain------------ to substantiate his opinon on the financial statements.
a)Internal evidence b)External evidence
c)Internal and external evidence d)Sufficient and appropriate evidence
35. The audit evidence provides grounds for believing that a particular thing is--------by providing
support for a fact or a point in question.
a)Correct b)Incorrect
c)True or not c)Acceptable
36. The evidences collected by the auditor must support the contents of the-
a)Audit work b)Audit plan
c)Audit programme d)Auditors report.
38. Sufficient evidence can be obtained by test checking instead of ------ checking.
a)Routine b)Exensive
c)Substantial d)100%
39. Evidence obtained by auditor are persuasive rather than --------- in nature therefore evidence
cannot be 100% reliable.
a)Reliable b)Circumstancial
c)conclusive d)Attractive
43.The obtained audit evidence must be--------- to the matter being checked
a)correct b)Reliable
c)Irrelevant d)Relevant
45.Audit evidence is more reliable when the auditor obtains ----------from difference sourcesor of
a different nature.
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46.The quality of informantion generated by the audited organization is directly related to the
strength of the organizations-
a)Internal check b)Internal control
c)Internal audit d)All of the above
53. ------- are the documents prepared or obtained by the auditors and tetained by him in
connection with the audit.
a)Audit notes b)Audit working papers
c)Audit evidence d)All of the above
56.Audit working papers are also serving as a great guide to the staff to whom the work of audit
has been assigned-
a)Before the previous year audit b) After the previous year audit
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c) Before the next year audit d) After the next year audit
57.The working papers are the property of the -------- and the client cannot ask the auditor for
their custody
a)Assistants who actually worked b)Client
c)Auditor d)Government
58. It is the duty of the auditor to maintain --------- of the client information
a)Accuracy b)Follow up
c)Secrecy d)Confidentiality
60. Seniors can supervise the audit work performed by the juniors by examining their-
a)Records and documents b)Performance
c)Behaviour at work place d)working papers
61. Working papers provide as evidence of the audit work performed to-
a)support the auditor b)support the audit assistants work
c)Save the auditor against adverse consequences
d)support the auditors opinion.
62. The Auditors Working Papers are divided into two parts;
a)Permanent audit file and current audit file
b) Permanent audit file and temporary audit file
c) temporary audit file and current audit file
d) current audit file and transitory audit file
Answers:
Question Ans Question Ans Question Ans Question Ans Question Ans
1 b 16 d 31 b 46 d 61 d
2 d 17 d 32 a 47 a 62 a
3 d 18 c 33 c 48 d
4 d 19 d 34 d 49 d
5 a 20 d 35 d 50 c
6 c 21 a 36 a 51 a
7 b 22 d 37 c 52 d
8 c 23 d 38 d 53 b
9 a 24 b 39 c 54 d
10 c 25 b 40 d 55 a
11 b 26 d 41 a 56 b
12 d 27 d 42 b 57 c
13 a 28 c 43 d 58 d
14 d 29 d 44 c 59 c
15 c 30 a 45 b 60 d
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4.When the auditor works for the organization,he or she is usually referred to as an-
a)Chief accountant b)Employee
c)External auditor d)Internal auditor
5.The internal auditor often conducts----- that may encompass several on a rotating basis
a)Internal audit b)Periodic audits
c)Work beneficial to external auditor d)Continuous audit
6.Often, the internal auditor will set up a schedule to ensure that audits are conducted
on------ of the company at least once per calendar:
a)each aspect b)each area
c)each wing d)each critical portion
7.So many Acts require organizations to get their accounts audited by-
a)A qualified chartered Accountant b)An internal auditor
c)An independent external agency d)An independent internal agency
9.The external auditor has to check the accounts of the organization,and their compliances to
various-
a)Rules and regulations b)Needs and purposes
c)Requirements d)Auditing standards
10.Section 224 of the Companies Act 1956 contains provisions regarding the-
a)Remuneration of the external auditor
b) Remuneration of the internal auditor
c)Appointment of the auditor
d)Appointment of the internal auditor
11.As per section224 the auditor of any company can be appointed by the
shareholders however in some cases the auditor can be appointed by the
a)Government of the state in which the company is registerd
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b)Directors
c)Central Government
d)Directors or the central government
12.Section 224(5)provides that the first auditor or auditors are to be appointed by the-
a)Shareholders b)Board of directors
c)Managing Directors d)Central government
13.First directors are appointed with ---------- of the date of the registration of the
Company.
a)One month b)two months
c)Three months d)Six months
14.The first auditor so appointed shall hold office till the conclusion of-
a)First accounting year b)Next accounting year
c)First Annual General Meeeting (AGM) d)First statutory meeting
16.In case the Board of Directors fails to appoint the first auditors within one month
of its incorporation the --------may appoint the first auditors.
a)Chairman of the company b)Managing dorectors
c)Company in general meeting d)central government
17.On appointment of subsequent auditors, the company must give intimation within
7 days of such appointment to-
a)The board of directors b)The registrar of companies
c)The auditor so appointed d)The central government
18.Sub-setion(6)of section 224 provides that the casual vacancy in the office of
auditor may be filled by the-
a)Board of directors b)shareholders
c)Central Government d)C&AG
20.The auditor appointed in the casual vacancy holds office till the conclusion of the
Next-
a)Annual general meeting b)Board meeting
c)Extraordinary general meeting d)Financial year.
21.Casual vacancy means vacancy created by the ceasing to act after being validly
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25.Who may appoint an auditor in a casual vacancy arising due to resignation of auditor-
a)Board of directors b)Company in general meeting
c)Central government d)Any of the above
26.In case the directors fail to appoint first auditor(s), the shareholders shall appoint
Them at------------- bypassing a resolution-
a)A general meeting b)First annual general meeting
c)Statutory meeting d)Annual general meeting
27.In a casual vacancy in the office of auditors arises by his resignation it should only
Be filled by the company in a ---------.
a)Boardss meeting b)Extraordinary general meeting
c)General meeting d)Annual general meeting
31.The authority to remove the first auditor before the expiry of the term is with-
a)The shareholder in a general meeting
b)The shareholders in the first annual general meeting
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32.Who out of the following cannot be appointed as a statutory auditor of the company-
a)Erstwhile director b)Inetrnal auditor
c)Relatove o! A director d)only (2) and (3)
36.Where firm of chartered accountants is appointed as auditors,who of the following may act the
name of the said firm-
a)Any partner of the firm b)Any director of the firm
c)Any employee of the firm,who is also a chartered accountancy
d)Any of the above.
39. A person acquires disqualification for appointment as a statutory auditor of the when he is
indebted to the company for more than-
a)Rs.1000 (b) Rs.5000 (c)Above Rs.1000 (d)Any sum
41. A person shall not be qualified to be appointed as an auditor of the company if he is in the
employment of-
a)An officer of the company b)An employee of the company
c)Both (a) and (b) d)None of the above
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43. In case of insolvency or unsound mind , a person will automatically be disqualified for
appointment as an auditor, because-
a)He is not a person of repute b)He cannot take decision properly
c)He is not wealthly d) He ceases to be a member of ICAI
45.--------Of the Companies Act,1956 contains provisions regarding the appointment of the
company:
a)Section 223 b) Section221
c) Section 224 d) Section 226
46.The quality of auditor to be free from influence is being defined by which term-
a)Self-control b)objective
c)Independence d)unbiased
47. The auditor of a compay shall have right of access , at all times, to the books, accounts and
vouchers of the company,whether kept at the-
a)Regisered office of the company b)Head office of the company
c)Corporate office of the company d)Anywhere
48. The auditor shall be entitled to require from the officers of the company such-----
as he theinks necessary for the performance of his duties as auditor.
a)Documents and records b)Informations
c)Explanations d)Informantion and explanation
49. In case the information is not supplied tothe auditor, he can report the same to the-
a)Board of directors b)Managing director
c)Members d)Chief executive officer(CEO) of the company
50.Only the person appointed as auditor of the compay or where a firm is so appointed, only a
partner in the firm practicing in India,may sign the-
a)Certificate b)Working papers
c)Documents d)Auditors report
52. Where the accounts of any branch office are audited by a person other than the companys
auditor, the companys auditor-
a)Shall not be entitled to visit the branch office
b)Shall be entitled to visit the branch office
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53. Where the accounts of any branch office are audited by a person other than the companys
auditor, the companys auditor-
a)shall have a right of access
b) shall not have a right of access
c) shall be required to access
d)shall not be required to access
54. The auditor shall have the right to receive ------ fro auditing the accounts of the company.
a)Remuneration b)Comission
c)Reward d)Award
56.The auditor must examine the original books of account,kept by the company to discover any -
-----therein.
a)Inefficiencies b)Irregularities
c)Inaccuracies or omissions d)Errors and frauds.
57.The auditorss duty is to examine the companys balance sheet and profit and loss account,and
report on the original books of account and the annual accounts to the-
a)Board of directors b)Managing director
c)Members d)Authority who has appointed him/her
60. Section 227(1A) requires an auditor to inquire; Whether------- hs actually been received in
respect of any shares shown in the books to have been allotted for cash
a)Payment b)Cash
c)Asset d)Consideration
62. Auditor will report on the matter and points as specified in section 227(1A) only if has a-------
-- to make otherwise he will not make any comment.
a)General comment b)Particular comment
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64. Who will be responsible for errors i report if external audit relies on the work of internal
auditor:
a)External auditor b)Internal auditor
c)Management d)Shareholders
66. When an independent auditor relies on the work of an internal auditor ,he or she should;
a)Examine the scope of internal auditors work
b)Examine the system of supervising,review and documentation of internal auditors work
c)Adquacy of related audit programme.
d)All of the above
67. In comparison to the independent auditor,an internal auditor is more likely to be concerned
with;
a)Cost accounting system b) Internal control system
c)Legal compliance d) Accounting system
68.Whether the management can restrict the scope of work of external auditor;
a)Yes b)No
(c)In some cases d)If shareholders permit
69. It is the duty of the auditor to-- -------- to the members of the company on the
Accounts examined by him.
a)Give suggestions b)Comment
c)Refer certain points d)Make a report,
70.The reports besides other things necessary in any particular case,must expressly state;
Whether the balance sheet gives a true and fair view of the ---------- as at the end of the financial
year.
a)Assets and liabilities b)Financial position
c)Companys standing d)companys affairs
71. The report, besides other things necessary in any particular case, must expressly state;
Whether the profit and loss account gives a true and fair view of the -----for the financial year.
a)Financial position b)companys earning capacity
c)Profit and loss d)All of the above
72. The report, besides other things necessary in any particular case, must expressly state;
Whether in his opinion , the profit and loss account and balance sheet comply with the -----------
referred to i Sub-section(3C) of section 211.
a)Auditing standards b)Auditing guidelines
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73. The report, besides other things necessary in any particular case, must expressly state; --------
-the observation or comments of the auditors which have any adverse effect on the functioning of
the company.
a)In thick type b)In italics
c)In thick type or in italics d)In bold type
74. The report, besides other things necessary in any particular case, must expressly state;Whether
any director is ------- from having appointed as director under clause (g) of 274(1)
a)Qualified b)Disqualified
c) Qualified or disqualified d)None of the above
75.Section 227(4) states that where any of the above matters is answered --------------- ,the
Auditors report must state the reason for the same
a)Positively b)In the negative
c)With a qualification d) INthe negative or with a qualification
76. Under Sub-section (4A) of section227 the ------------- is empowered to issue order requiring
the auditor to include in his report a statement on such matters as may be specified
a)Central Government b)State Government
c)Comptroller and Auditor General of India (C&AG) d)Registrar of Companies.
78. Auditors report is the experts opinion expressed by the auditor as to the fairness of-
a)Financial position b) General position
c)Financial statements d)Balance sheet and profit and loss account
79.--------is the medium through which an auditor expresses his opinion on the financial
statements-
a)Auditors observation b)Auditors comments
c)Auditors views d)Auditors report
80. Auditors report is an important part of -------since it summarize the results of the examination
work conducted by the auditor-
a)Accounting process b)Audit process
c)Accounting and audit process d)None of the above
81.The report shows the scope of the work done and the responsibility assumed by the auditor
regarding the ------- of the financial statements.
a)Truthfulness b)fairness
c)correctness ot otherwise d)Fairness or otherwise
82.The auditor draws appropriate conclusions by -----------, which he conveys through the audit
report.
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SIDDHARTH ACADEMY
83.Auditor report is addressed to the members of the company and is considered at the -----------
of the company.
a)Board Meeting(BM) b)Annual General Meeting (AGM)
c)Extraordinary Geneeral Meeting(EGM) d)All of the above
84.Audit reports should be so drafted that they remain simple and intelligible to-
a)Readers (b)Directors (c)employees (d)A comman man
85.The auditor report should be explicit so as to provide greater informantion and protection to the
interest of ----------and others.
a)Board of Directors b)Employees
c)Shareholders d)Debtors and Creditors
90.The audit report should indicate the -------- or practice followed in conducitong the audit.
a)Accounting standards b)Auditing standard
c)Auditing guidelines d)Accounting policies
92.The auditors report shall be---------- the date on which the auditor has obtained sufficient
appropriatae audit evidence and date on which accounts are approved by the management.
a)dated b)dated not earlier than
c)dated but not later than d)None of the above
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SIDDHARTH ACADEMY
94.Where auditor does not have any, reservation, objection, regarding the information under
audit, then he issues an-
a)Adverse opinion b)Qualified opinion
c)Unqualified opinion d)Disclaimer of opinion.
96.Where auditor expresses-----------, he should also slate in his report the reason for the same, so
that the readers can assess their significance and effect.
a)An adverse opinion b)Unqualified opinion
c)Disclaimer of opinion. d)All of the above
97.In a situation where neither the unqualified, nor adverse opinion is appropriate the auditor
gives the-
a)Clean report b)Qualified opinion
c)Disclaimer of opinion d)None of the above
98.Where auditor expresses a qualified opinion,he should also state in his report the-
a)Matters on which he is satisfied
b)Matters on which he is not satisfied
c)Reasons for the qualified opinion
d)Consequencces of the dissatisfied areas/points
100. If the qualification are quantifiable (measurable)then the auditor has to----- it.
a)Quality b)Calculate
c)Compute d)Quantity
102. When auditor does not have any reservation,objection regarding the information under audit
then he issues an-
a)Qualified opinion b)Averse opinion
c)unqualified opinion d)Negative opinion
103.Auditor has to give its opinion whether the financial statement depicts:
a) True and correct view b) Fair and correct view
c) True and fair view d) True and Exact view
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SIDDHARTH ACADEMY
Anwers:
Q. No. Ans Q. No. Ans Q. No. Ans Q. No. Ans Q. No. Ans Q. No Ans
1 d 21 c 41 c 61 d 81 d 101 a
2 d 22 d 42 d 62 c 82 d 102 c
3 c 23 c 43 d 63 d 83 b 103 c
4 d 24 d 44 d 64 a 84 d 104 d
5 b 25 b 45 c 65 d 85 c 105 d
6 d 26 a 46 c 66 d 86 d
7 c 27 c 47 d 67 b 87 c
8 b 28 a 48 d 68 b 88 d
9 a 29 a 49 c 69 d 89 d
10 c 30 c 50 d 70 d 90 b
11 d 31 a 51 d 71 c 91 c
12 b 32 b 52 b 72 d 92 b
13 a 33 c 53 a 73 c 93 e
14 c 34 e 54 a 74 b 94 c
15 d 35 a 55 d 75 d 95 c
16 c 36 a 56 c 76 a 96 a
17 c 37 b 57 c 77 d 97 b
18 a 38 b 58 c 78 c 98 c
19 c 39 c 59 b 79 d 99 d
20 a 40 d 60 b 80 b 100 d
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