Auditing Mcqs Practice Test

Question 1

For what minimum period should audit working papers be retained by audit firm?

Accepted Answer

C.  For a period auditor opines them to be useful in servicing the client

Question 2

The auditor’s permanent working paper file should not normally, include__________?

Accepted Answer

A. Extracts from client’s bank statements

Question 3

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

Accepted Answer

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

Question 4

Which  of  the  following  best  describes  the  primary  purpose  of  audit  programme preparation?

Accepted Answer

C. To gather sufficient

Question 5

The quantity of audit working papers complied on engagement would most be affected by__________?

Accepted Answer

B. Auditor’s experience and professional judgment

Question 6

The working papers which auditor prepares for financial statements audit are___________?

Accepted Answer

C. Owned by the auditor

Question 7

Audit programme is prepared by____________?

Accepted Answer

D. The auditor and his audit assistants

Question 8

What would most effectively describe the risk of incorrect acceptance in terms of substantive audit testing?

Accepted Answer

A. The auditor has ascertained that the balance is materially correct when in actual fact it is not

Question 9

Which of the following affects audit effectiveness?

Accepted Answer

D. Both A and C

Question 10

What would most appropriately describe the risk of incorrect rejection in terms of substantive testing?

Accepted Answer

B. The auditor concludes that the balance is materially misstated when in actual fact it not

Question 11

Which of the following is not corroborative evidence?

Accepted Answer

D. Worksheet supporting consolidated financial statements

Question 12

When is evidential matter, generally, considered sufficient?

Accepted Answer

B.  When it is enough to provide a basis for giving reasonable assurance regarding truthfulness

Question 13

Which of the following factors is most important in determining the appropriations of audit evidence?

Accepted Answer

A. The reliability of audit evidence and its relevance in meeting the audit objective

Question 14

The nature, timing and extent of substantive procedures is related to assessed level of control risk

Accepted Answer

C. Directly

Question 15

In an audit of financial statements, substantive tests are audit procedures that __________?

Accepted Answer

D. May be test of transactions, test of balance and analytical procedures

Question 16

Which of the following statements is, generally, correct about the reliability of audit evidence?

Accepted Answer

B. Effective internal control system provides reliable audit evidence

Question 17

Of the following, which is the least persuasive type of audit evidence?

Accepted Answer

C. Carbon copies of sales invoices inspected by the auditor

Question 18

Goods sold on the basis of ‘sales or return ‘ should:

Accepted Answer

A. Be included in the stock

Question 19

Floating assets are valued at____________?

Accepted Answer

C. Cost	or market price whichever is lower

Question 20

Stock should be valued at_________?

Accepted Answer

C. Cost or Market price whichever is lower.