Auditing Mcqs Practice Test

Question 1

For companies required to produce interim financial statements (IFI):

Accepted Answer

D. the same firm should review the IFI and the financial statements for the year as a whole.

Question 2

What is meant by negative assurance?

Accepted Answer

D. The auditor did not find anything to indicate that a material misstatement exists.

Question 3

The auditor   should examine subsequent realization of revenue such as dividends, interest,commission, etc to:\xad_____________?

Accepted Answer

A. identify cases of unrecorded revenue

Question 4

To test whether sales have been recorded, the auditor should draw a sample from a file of__________?

Accepted Answer

C. sales invoices

Question 5

Which of the following documents is not relevant for vouching cash sales?

Accepted Answer

C. Monthly statements sent to customers

Question 6

The client changed method of depreciation from straight line to written down value method. This has been disclosed as a note to the financial statements. It has an immaterial effect on the  current  financial  statements.  It  is  expected,  however,  that  the  change  will  have  a significant  effect  on  future  periods.  Which  of  the  following  option  should  the  auditor express?

Accepted Answer

A. Unqualified opinion

Question 7

Which of the following is true about explanatory notes?

Accepted Answer

A. These are given by the directors of the company

Question 8

The auditor has serious concern about the going concern of the company. It is dependent on company’s obtaining a working capital loan from a bank which has been applied for. The management of the company has made full disclosure  of these  facts in the notes to the balance sheet. The auditor is satisfied with the level of disclosure. He should issue___________?

Accepted Answer

B. unqualified opinion with reference to notes to the accounts

Question 9

When restrictions that significantly affect the scope of the audit are imposed by the client, the auditor generally should issue which of the following opinion?

Accepted Answer

A. Qualified opinion

Question 10

The date on auditor’s report should not be____________?

Accepted Answer

C. earlier than the date on which the accounts are approved by the management

Question 11

Auditor of a___________company does not have right to visit foreign branches of the company?

Accepted Answer

B. Manufacturing

Question 12

The branch auditor is appointed by___________?

Accepted Answer

B. Shareholders in general meeting

Question 13

The auditor has a right to\xad___________?

Accepted Answer

D. Both B. and C.

Question 14

A statutory auditor has a right of access at all times to___________?

Accepted Answer

C. Books, accounts and vouchers of the company

Question 15

Who out of the following cannot be appointed as a statutory auditor of the company?

Accepted Answer

B. Internal auditor

Question 16

The authority to remove the first auditor before the expiry of term is with__________?

Accepted Answer

A. the shareholders in a general meeting

Question 17

If a casual vacancy in the office of auditor arises by his resignation it should only be filled by the company in a_________?

Accepted Answer

C. General meeting

Question 18

In case the directions fail to appoint first auditor (s), the shareholders shall appoint them at_________by passing a resolution.

Accepted Answer

A. a general meeting

Question 19

The term of the auditor ship of first auditor would be from the date of appointment till________?

Accepted Answer

B. the conclusion of first annual general meeting

Question 20

The board of directors shall appoint first auditor of a company

Accepted Answer

D. With in one month of incorporation of the company