This quiz works best with JavaScript enabled. Home > Finance > Accounting > Auditing > Auditing – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Auditing Quiz 12 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Surprise checks are part of an A) Auditor's working papers. B) Audit Programme. C) Auditor's Report. D) Accounting Standard. Show Answer Correct Answer: B) Audit Programme. 2. When an auditor detects material weaknesses in the internal checks and control system of the company under audit, it should report his findings as per A) ICWAI orders. B) ICAI orders. C) SEBI orders. D) MAOCARO orders. Show Answer Correct Answer: B) ICAI orders. 3. The following are examples of audit documentation, except..... A) Program audit. B) Permanent archive. C) Test list. D) Analysis. Show Answer Correct Answer: B) Permanent archive. 4. When auditing an investment in another company, an auditor most likely would seek to conduct which audit procedure to help satisfy the valuation assertion? A) Inspect the stock certificates evidencing the investment. B) Examine the audited financial statements of the investee company. C) Review the broker's advice or canceled check for the investment's acquisition. D) Obtain market quotations from The Wall Street Journal or another independent source. Show Answer Correct Answer: D) Obtain market quotations from The Wall Street Journal or another independent source. 5. The following are the benefits and functions of making an LHP, except..... A) Media for communicating examination results to related parties. B) As a material for improvement for the entity being examined. C) As a basis for follow-up monitoring that must be carried out by the auditee. D) As material for authorities and NGOs to participate in evaluating the results of the examination. Show Answer Correct Answer: D) As material for authorities and NGOs to participate in evaluating the results of the examination. 6. It is not the auditor's responsibility to ensure that the entity complies with relevant laws and regulations. A) True. B) False. Show Answer Correct Answer: A) True. 7. Assertions about rights and obligations relate to..... A) Whether the entity's assets or liabilities existed at a particular date and whether the recorded transactions have occurred during a particular period. B) Whether all transactions and accounts that should be presented in the financial statements have been included in them. C) Whether assets are the entity's rights and debts are the company's obligations at a certain date. D) Whether the components of assets, liabilities, income and costs have been included in the financial statements at the proper amounts. Show Answer Correct Answer: C) Whether assets are the entity's rights and debts are the company's obligations at a certain date. 8. The first auditor of a company will hold office A) For a period of one year. B) Till holding of statutory meeting. C) Till the conclusion of first annual general meeting. D) Till a new auditor is appointed. Show Answer Correct Answer: C) Till the conclusion of first annual general meeting. 9. The audit conducted to check and examine the efficiency and effectiveness management is called ..... A) Safety audit. B) Energy audit. C) Company audit. D) Management audit. Show Answer Correct Answer: D) Management audit. 10. Auditing is derived from the Latin word A) Order. B) Audire. C) Audre. D) Auditor. Show Answer Correct Answer: B) Audire. 11. Without the client's permission, a CPA may not disclose confidential client information contained in the auditor's working papers to: A) A federal court that has issued a valid subpoena. B) Disciplinary enforcement bodies established in accordance with State law. C) Voluntary quality control review board. D) A CPA firm that has purchased the accounting practice of another CPA firm. Show Answer Correct Answer: A) A federal court that has issued a valid subpoena. 12. What are the audit periods? A) November-April and May-October. B) January-May and June-October. C) October-February and March-July. D) November-October. Show Answer Correct Answer: A) November-April and May-October. 13. Analytical procedures used in planning an audit should focus on identifying ..... A) The various assertions that are embodied in the financial statement. B) The predictability of financial data from individual transaction. C) Areas that may represent specific risks relevant to the audit. D) Material weaknesses in internal control. Show Answer Correct Answer: C) Areas that may represent specific risks relevant to the audit. 14. What is auditing A) A critical examination of books of records. B) A formality check. C) Regular activity. D) None of these. Show Answer Correct Answer: A) A critical examination of books of records. 15. WHICH ONE IS NOT AN DUTY OF AN AUDITOR A) Duty to sign the audit report. B) Duty to report to company's banker. C) Duty to report to members. D) Duty to report on violation of law. Show Answer Correct Answer: B) Duty to report to company's banker. 16. Primary objective of audit is A) Detection of errors. B) Detection of frauds. C) Verification of assets. D) None of the above. Show Answer Correct Answer: D) None of the above. 17. Internal check is done by the A) Internal auditor. B) External auditor. C) Employees. D) None of these. Show Answer Correct Answer: C) Employees. 18. SQCS (Statements on Quality Control Standards) were issued by who? A) ASB. B) EDD. C) DOD. D) OED. E) BSA. Show Answer Correct Answer: A) ASB. 19. An auditor is a watch dog not a blood hound.this statement has been given in decesion of. A) Garner vs Murray case. B) Kingston cotton mill case. C) Pardger cotton mill case. D) None of the above. Show Answer Correct Answer: B) Kingston cotton mill case. 20. WHICH OF THE FOLLOWING IS NOT ELIGIBLE FOR APPOINTMENT AS AN AUDITOR OF A COMPANY A) A person who is CA. B) A person who is employee of company and a CA. C) A firm of CA. D) A LLP having CA as partners. Show Answer Correct Answer: B) A person who is employee of company and a CA. 21. Which of the following are the responsibilities of the external auditor in auditing financial statements? A) Maintaining internal controls and preparing financial reports. B) Providing internal assurance on internal control and financial reports. C) Providing internal oversight of the reporting process. D) All of the above. E) None of the above. Show Answer Correct Answer: E) None of the above. 22. The following are methods of rationalizing unethical behavior, except..... A) Everyone does it. B) If it is legal, it is ethical. C) I'm the only one who does it. D) Possible discoveries and their consequences. Show Answer Correct Answer: C) I'm the only one who does it. 23. The Treasurer lives a great distance from the meeting place and cannot attend special events and most meetings due to her job. Can the Recordress keep the Deposit Slip and make the deposit of Court funds? A) Yes. B) No. Show Answer Correct Answer: B) No. 24. An audit which deals with compliance of various provisions of Companies Act is known as A) Secretarial Audit. B) Internal audit. C) Management Audit. D) Balance sheet audit. Show Answer Correct Answer: A) Secretarial Audit. 25. Which of the following is not an estimate that is usually classified as inventory is..... A) Raw materials. B) Finished good. C) Allowance for bad debt. D) Spare part. Show Answer Correct Answer: C) Allowance for bad debt. 26. An auditor is not easily influenced, is not bound by anyone, does not depend on other people, is called..... A) Independent. B) Trust. C) Profesional. D) Independent. Show Answer Correct Answer: A) Independent. 27. Three major differences between operational and financial audit are the purpose of audit, distribution of report and inclusion of non-financial areas in operational audit. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 28. The condition found by the auditor, after obtaining sufficient audit evidence, concluded that the deviation from accounting principles (misstatement) found was material and pervasive. So the opinion that should be given is..... A) Does Not Give Opinion (Disclaimer). B) Reasonable With Exceptions (Qualified Opinion). C) Wajar Tanpa Pengecualian (Unqualified Opinion). D) Unfair (Adverse). Show Answer Correct Answer: D) Unfair (Adverse). 29. A CPA firm wishes to be adequately assured whether it has fulfilled its responsibility to provide services according to professional standards by: A) Adherence to generally applicable auditing standards. B) Have a proper quality control system. C) Join a professional society that encourages ethical behavior. D) Maintain an independent attitude in the alliance. Show Answer Correct Answer: D) Maintain an independent attitude in the alliance. 30. This corroborating evidence is in the form of a direct written response as known to the third party to a specific request for actual information. This evidence is very reliable, but the procedures used are very expensive. What type of corroborating evidence is meant? A) Physical evidence. B) Confirm. C) Inspection. D) Oral evidence. Show Answer Correct Answer: B) Confirm. ← PreviousNext →Related QuizzesAccounting QuizzesFinance QuizzesAuditing Quiz 1Auditing Quiz 2Auditing Quiz 3Auditing Quiz 4Auditing Quiz 5Auditing Quiz 6Auditing Quiz 7Auditing Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books