This quiz works best with JavaScript enabled. Home > Accounting > Auditing > Auditing – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Auditing Quiz 11 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Two managers were charged with ..... $ 400, 000 over a ten-year period. A) Integrity. B) Payroll. C) Embezzling. D) Misstatement. Show Answer Correct Answer: C) Embezzling. 2. The objectives of the audit of the receivables section are as follows except A) Registered receivables are legal claims and belong to the company. B) All company invoices have been recorded completely and accurately within cut-off limits. C) Receivables have been appropriately classified. D) Is an uncollectible debt. Show Answer Correct Answer: D) Is an uncollectible debt. 3. The first auditors of a company are appointed by the A) Registrar of Companies. B) Shareholders of the Company. C) Promoters of the Company. D) Board of Directors of the Company. Show Answer Correct Answer: D) Board of Directors of the Company. 4. The following that do not include steps in understanding and assessing operational risk are ..... A) Carry out testing of the costs and benefits of internal control. B) Carry out substantive testing. C) Design, perform, and evaluate tests of controls. D) Assess control risk. Show Answer Correct Answer: A) Carry out testing of the costs and benefits of internal control. 5. In examining financial statements, auditors need several physical evidence including..... A) Intangible assets, other assets, and capital. B) Long-term debt and capital. C) Cash, Securities, Inventory and Fixed Assets. D) Receivables and Payables. Show Answer Correct Answer: C) Cash, Securities, Inventory and Fixed Assets. 6. Cutoff tests designed to detect valid sales that occurred before the end of the year but have been recorded in the subsequent year would provide assurance about management's assertion of A) Presentation and disclosure. B) Completeness. C) Rights and obligations. D) Existence. Show Answer Correct Answer: B) Completeness. 7. Auditors calculate various financial ratios of client companies to compare them with the same financial ratios of similar companies in the industry and the same financial ratios of client companies from previous years. In this case the auditor does..... A) Substantive testing. B) Tests of controls. C) Analytical testing. D) Test of control. Show Answer Correct Answer: C) Analytical testing. 8. The level of assurance provided by an external audit is absolute. A) True. B) False. Show Answer Correct Answer: B) False. 9. Statements regarding inconsistencies in the application of generally accepted accounting principles are contained in the standard..... A) A. Reporting. B) B. Field work. C) W. One one. D) D. Examination of Financial Reports. Show Answer Correct Answer: A) A. Reporting. 10. Companies with effective corporate governance are more risky to audit. A) True. B) False. Show Answer Correct Answer: B) False. 11. Example of vouchers A) Cash memo. B) Bank pay in slip. C) Both A and B. D) Only A. Show Answer Correct Answer: C) Both A and B. 12. Which of these statements is false A) Detection and prevention of errors and fraud are secondary objectives. B) The objectives of accounting can be classified into two parts. C) Primary objectives are also called contingency objectives. D) The primary purpose of auditors is report to owners. Show Answer Correct Answer: C) Primary objectives are also called contingency objectives. 13. In collecting information to understand the internal control that applies within the client's company, the auditor is primarily interested in internal control whose objectives, except..... A) Compliance with applicable laws and regulations. B) Effectiveness and efficiency of operations. C) Reliability of financial reporting. D) Prevention of collusion. Show Answer Correct Answer: D) Prevention of collusion. 14. What is the first stage of energy audit. A) Survey. B) Checking. C) Report. D) Preparation. Show Answer Correct Answer: D) Preparation. 15. Audit is a fact finding process that compares actual results with A) Specified Standards and plans. B) Expected results. C) Premature results. D) Preliminary results. Show Answer Correct Answer: A) Specified Standards and plans. 16. The purpose of an audit is to test management's assertions in the financial statements, except..... A) Rights and obligations. B) Valuation or allocation. C) Client business plan. D) Existence or existence. Show Answer Correct Answer: C) Client business plan. 17. Main Object of Audit is A) Detection and Prevention of Errors. B) Detection of Frauds. C) Detection and Prevention of Errors and Frauds. D) To find out whether P/L Account and B/S exhibit true and fair view of state of affairs. Show Answer Correct Answer: D) To find out whether P/L Account and B/S exhibit true and fair view of state of affairs. 18. When there is a request for confirmation from a client who does not provide an answer, the confirmation code is A) CB. B) NR. C) PBC. D) RPO. Show Answer Correct Answer: B) NR. 19. Inventory costs must be calculated using the first-in, first-out cost formula, which is called..... A) FIFO. B) LIFO. C) AVERAGE. D) First In. Show Answer Correct Answer: A) FIFO. 20. ..... auditors work with government departments or private businesses, checking for mismanagement of funds and findinf ways to eliminate waste and fraud. A) Independent. B) Public. C) External. D) Internal. Show Answer Correct Answer: D) Internal. ← PreviousNext →Related QuizzesAccounting QuizzesAuditing Quiz 1Auditing Quiz 2Auditing Quiz 3Auditing Quiz 4Auditing Quiz 5Auditing Quiz 6Auditing Quiz 7Auditing Quiz 8Auditing Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books