This quiz works best with JavaScript enabled. Home > Finance > Accounting > Auditing > Auditing – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Auditing Quiz 15 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Accountancy starts were book keeping ends A) False. B) True. Show Answer Correct Answer: B) True. 2. Audit services are included in which of the following core services? A) Financial planning services. B) Assurances services. C) Management consulting services. D) Technology services. Show Answer Correct Answer: C) Management consulting services. 3. Application-based controls are implemented to ensure that: A) A. Prevent and detect unauthorized interference. B) B. Data input into the application is valid, complete and accurate. C) C, Access control systems in accordance with organizational policies. D) D. Documentation of user requirements and measuring achievements. Show Answer Correct Answer: C) C, Access control systems in accordance with organizational policies. 4. An audit of financial statements is conducted to determine if the A) Client's internal control is functioning as intended. B) Organization is operating efficiency and effectively. C) Auditee is following specific procedures or rules set down by some higher authority. D) Overall financial statements are stated in accordance with the applicable financial reporting framework. Show Answer Correct Answer: D) Overall financial statements are stated in accordance with the applicable financial reporting framework. 5. Balance Sheet audit has its origin in A) US. B) INDIA. C) UK. D) AUSTRALIA. Show Answer Correct Answer: A) US. 6. Which of the following characteristics is not an element of audit risk? A) Materiality risk. B) Control risk. C) Inherent risk. D) Detection risk. Show Answer Correct Answer: A) Materiality risk. 7. Which of the following statement is not distinguishing feature for computer based processing and manual processing? A) In a computer based accounting system, audit trail is in electronic form. B) The potential for human error in the CIS environment is lesser as compared to manual system. C) Errors in a CIS environment are less systemic as compared to errors in manual processing. D) Computer processing offers management a variety of analytical tools. Show Answer Correct Answer: C) Errors in a CIS environment are less systemic as compared to errors in manual processing. 8. Which two of the following characteristics apply to internal audit?(1) The purpose is to improve the company's operations.(2) Reports to shareholders on whether the financial statements give a true and fair view of affairs.(3) Auditors may be employees of the company.(4) Evidence is collected in accordance with relevant ISAs. A) (1) and (3). B) (2) and (4). C) (1) and (4). D) (2) and (3). Show Answer Correct Answer: A) (1) and (3). 9. Below are the parties responsible for all transactions within the organization: A) Auditor internal. B) Management. C) Board of Directors. D) Financial executive. Show Answer Correct Answer: B) Management. 10. What if a five (5) member Audit Team has been appointed and only three (3) of the five are available to do the Audit, would the Audit be considered valid? A) Yes. B) No. Show Answer Correct Answer: A) Yes. 11. If certain items are found that require adjustments to be reasonable, the auditor has the right to provide an opinion in the form of: A) WTP. B) Reasonable Without exception. C) Unreasonable. D) WTP with Explanatory Paragraph. Show Answer Correct Answer: D) WTP with Explanatory Paragraph. 12. Internal check and internal audit are the same A) True. B) False. Show Answer Correct Answer: B) False. 13. Auditors of a company are ordinarily appointed by A) General Manager of the company. B) Shareholders in the annual general meeting. C) Managing Director. D) Chairman of the Board of Directors. Show Answer Correct Answer: B) Shareholders in the annual general meeting. 14. Every practitioner must be firm and honest in establishing professional relationships and business relationships in carrying out their work. This statement is in accordance with the basic principles of the Code of Ethics for Public Accountants, namely..... A) Professional behavior. B) Objectivity. C) Integrity. D) Confidentiality. Show Answer Correct Answer: C) Integrity. 15. According to SOX Section 404, the types of opinions an examiner may provide on a client entity's internal controls are as follows, except..... A) Do not give an opinion. B) Not effective and efficient. C) Unreasonable. D) Reasonable without exception. Show Answer Correct Answer: B) Not effective and efficient. 16. The primary difference between operational auditing and financial auditing is that in operational auditing A) The operational auditor is not concerned with whether the audited activity is generating information in compliance with financial accounting standards. B) The operational auditor is seeking to help management use resources in the most effective manner possible. C) The operational auditor starts with the financial statements of an activity being audited and works backward to the basic processes involved in producing them. D) The operational auditor can use analytical skills and tools that are not necessary in financial auditing. Show Answer Correct Answer: B) The operational auditor is seeking to help management use resources in the most effective manner possible. 17. As per SA-200 "Overall Objectives of the Independent Auditor", in conducting an audit of financial statements, the overall objectives of the auditor are: A) To Obtain reasonable assurance. B) To report on the financial statements. C) Both (a) and (b) above. D) None of the above. Show Answer Correct Answer: C) Both (a) and (b) above. 18. Who implement the auditing? A) Independent auditors. B) State auditors. C) Internal auditors. D) All of above answers. Show Answer Correct Answer: D) All of above answers. 19. The level of assurance provided by an assurance engagement will depend on the type of engagement. Which of the following type of engagemeent will give the level of reasonable assurance? A) Review of financial information. B) Report on profit and cashflow forcast. C) Internal audit reviews. D) Statutory audit. Show Answer Correct Answer: D) Statutory audit. 20. An inspection of facilities, equipment, work practices which identifies any areas or practices that might be hazardous to employees is a ..... ? A) General Safety Audit. B) Safety Program. C) Emergency Plan. D) None of above. Show Answer Correct Answer: A) General Safety Audit. 21. The independent audit firm only conducts financial statement audits. A) True. B) False. Show Answer Correct Answer: B) False. 22. Providing opinions is an audit function in the form of: A) Inspection. B) Attestation. C) All true. D) None of above. Show Answer Correct Answer: B) Attestation. 23. Independent and competent auditors: A) Independence in fact:maintains an unbiased attitude, follows the auditingstandards and obeys the law. B) Independence in appearance:shouldn't be influenced by the client's interestand close relationships. C) Competence:qualification, skills, ethics and factors needed to effectivelymanage and confirm the correctness of a company's accounting procedures. D) All of above answers. Show Answer Correct Answer: D) All of above answers. 24. The correct audit risk formula is A) DR = AR x IR x CR. B) IR = AR / (CR + DR). C) CR = IR / (AR x DR). D) AR = IR x CR x DR. Show Answer Correct Answer: D) AR = IR x CR x DR. 25. Who among the following is eligible to appoint an auditor of Government company? A) By C & AG. B) A chartered accountant whether in practice or not. C) A chartered accountant in practice. D) An individual not passing CA. Show Answer Correct Answer: A) By C & AG. 26. When incorrect entries are made in the books of accounts either wholly or partially, the error is ..... 2. A) Error of Omission. B) Error of Commission. C) Error of Principle. D) Compensating error. Show Answer Correct Answer: B) Error of Commission. 27. A continuous audit is not suitable where A) System of Internal check in operation is not satisfactory. B) Transactions are few but complicated. C) There is no urgency to finalise the accounts on a particular date. D) Internal audit work is being carried on in a satisfactory manner. Show Answer Correct Answer: D) Internal audit work is being carried on in a satisfactory manner. 28. ..... is the examination by the auditor of all documentary evidences, which are available to support the authenticity of the transaction entered in the clients record A) Book-Keeping. B) Vouching. C) Recording. D) Accounting. Show Answer Correct Answer: B) Vouching. 29. The word 'Audit ' is derived from a Latin word ''audire" which means ..... A) To inspect. B) To examine. C) To hear. D) None of above. Show Answer Correct Answer: C) To hear. 30. An Auditor can hold the audit of not more than ..... companies A) 10. B) 20. C) 30. D) 15. Show Answer Correct Answer: B) 20. ← 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