Auditing Mcqs Practice Test

Question 1

Which of the following is not an analytical procedure?

Accepted Answer

A. Tracing of purchases recurred in the purchase book to purchase invoices.

Question 2

What are analytical procedures?

Accepted Answer

C. Substantive tests designed to study relationships between financial and non\xadfinancial

Question 3

The basic assumption underlying the use of analytical procedures is:____________?

Accepted Answer

B. Relationship among data exist and continue in the absence of known condition to the contrary

Question 4

Which  of  the  following  statements  is  most  closely  associated  with  analytical  procedure applied at substantive stage?

Accepted Answer

D. It helps to accumulate evidence supporting the validity of a specific account balance

Question 5

Analytical procedures issued in the planning stage of an audit, generally?

Accepted Answer

D. All of the above

Question 6

In determining the level of materiality for an audit, what should not be considered?

Accepted Answer

B. The auditor’s remuneration

Question 7

When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the_____________?

Accepted Answer

B. Estimates of the total likely misstatement is less than materiality level

Question 8

_______the audit risk,_______the materiality and _______the audit effort?

Accepted Answer

A. Lower, Higher, Lower

Question 9

Which of the following statements is not correct about materiality?

Accepted Answer

D. At the planning state, the auditor considers materiality at the financial statement levelonly

Question 10

Balance sheet does not include\xad:_____________?

Accepted Answer

D. Routine checks

Question 11

Which of the following statements is not true about continuous audit?

Accepted Answer

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

Question 12

Balance sheet audit includes verification of____________?

Accepted Answer

D. All of the above

Question 13

Audit in depth is synonymous for\xad_____________?

Accepted Answer

D. Detailed audit

Question 14

In Pakistan, balance sheet audit is synonymous to___________?

Accepted Answer

A. Annual audit

Question 15

Audit of banks is an example of__________?

Accepted Answer

E. All of the above

Question 16

Auditing is what?

Accepted Answer

B. Examination of financial statements

Question 17

The current file of the auditor’s working papers, generally, should include____________?

Accepted Answer

C. A copy of financial statements

Question 18

Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor?

Accepted Answer

A. The working papers may be obtained by third parties when they appear to be relevant to issues raised in litigation

Question 19

Which of the following statement is true regarding an auditor’s working papers?

Accepted Answer

B. They should be considered as the principle support for the auditor’s report

Question 20

Which of the following factors would least likely affect the quantity and content of an auditor’s working papers

Accepted Answer

D. The content of management representation letter