Auditing Set 5
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This set of Auditing Multiple Choice Questions & Answers (MCQs) focuses on Auditing Set 5
Q1 | Which of the following sections deal with qualifications of the auditor ?
- Section 226 (1) and section 226(2)
- Section 224 (1) and section 224 (2)
- Section 226 (3) and section 226(4)
- Section 224(3) & Sec.224
Q2 | Which of the following statement is not true?
- A partnership firm can be appointed as a statutory auditor of limited company
- Appointment can be made in the name of the firm
- Majority of the partners should be practicing in India
- All partners should be chartered accountants
Q3 | As per the requirements of section 226(3) and 226(4) a person is disqualified frombeing appointed as a statutory auditor if he holds
- Equity shares or debentures of the company
- Equity shares carrying voting of the company
- Shares carrying voting rights of the company
- Security carrying voting rights of the company
Q4 | The board of directors shall appoint first auditor of a company
- Within one month of completion of capital subscription state of the company
- Within one month of the promotion of the company
- Within one month of the commencement of the business of the company
- Within one month of incorporation of the company
Q5 | The term of the auditor ship of first auditor would be from the date of appointmenttill__
- the conclusion of statutory meeting
- the conclusion of first annual general meeting
- the conclusion of next annual general meeting
- the date of removal
Q6 | In case the directions fail to appoint first auditor (s), the shareholders shall appointthem at…..by passing a resolution
- a general meeting
- first annual general meeting
- statutory meeting
- annual general meeting
Q7 | Which of the following statement is not true regarding appointment of statutoryauditor by the Central Government?
- Such powers have been conferred upon it by section 224(3)
- If a company fails to appoint an auditor at a general meeting
- If an auditor refuses to accept appointment, the powers of the Central
- None of the above
Q8 | If a casual vacancy in the office of auditor arises by his resignation it should only befilled by the company in a……..
- Board meeting
- Extraordinary general meeting
- General meeting
- Annual general meeting
Q9 | For the purposes of section 224(IB) the number of partners of a firm which shall betaken into account would be as on the date of _
- Completion of audit
- Auditor’s report
- Acceptance of audit
- Starting of audit work
Q10 | Which of the following is counted for the purposes of section 224(IB) the number ofpartners of a firm which shall be taken into account would be as on the data of ___
- Joint audit
- Audit to non-profit companies
- Audit of unlimited companies
- All of the above
Q11 | Mr. A, a Charted Accountant, has nineteen audits, Out of following audits whichaudits should he accept to ensure he doesn’t violate provisions of section 224(IB) __
- Audit of a private company
- Audit of branch of a foreign company
- Audit of two branches of an Indian company
- All of them
Q12 | Which audit out of the following would not be regarded as one audit for the purposesof section 224(IB)?
- Audit of one branch each of two different companies
- Joint audit
- Audit head office & branches
- Audit of one or more branches of a company
Q13 | The auditor of a Government company is appointed by the C & AG. His remunerationis fixed by__
- The C & AG
- The shareholders
- The shareholders at an annual general meeting
- The board of directors
Q14 | The section which contains provisions regarding remuneration of the auditor is_
- Section 224(9)
- Section 224(7)
- Section 224(8)
- Section 224(6)
Q15 | The authority to remove the first auditor before the expiry of term is with_
- The shareholders in a general meeting
- The shareholders in the first annual General meeting
- The board of directors
- the Central Government
Q16 | Which of the following statements is not correct regarding removal of first auditorbefore expiry of the term?
- He is removed at a general meeting
- The shareholders are authorized to do so
- The approval of the Central Government is required for such removal
- The provisions for such removal are contained in section 224(7)
Q17 | The retiring auditor does not have a right to___
- make written representations
- get his representations circulated.
- be heard at the meeting
- speak as a member of the company
Q18 | Who out of the following cannot be appointed as a statutory auditor of the company?
- Erstwhile director
- Internal auditor
- Relative of a director
- Only (b) and (c)
Q19 | A statutory auditor has a right of access at all times to
- Books and accounts of a company
- Books, accounts and documents of the company
- Books, accounts and vouchers of the company
- Notices and documents of the company
Q20 | The auditor has a right to
- Obtain information and explanation
- Obtain information and explanation from the employees and officers
- Obtain information and explanation necessary for the purpose of audit
- Both (b) and (c)
Q21 | The principal auditor, as per clarification issued by the ICAI, does not have any rightto
- Inspect working papers of the branch auditor
- Visit branches
- Seek information necessary for audit purposes
- Incorporate the branch audit report in his audit report
Q22 | Under which of the following section auditor has a duty to enquire into six specifiedmatters and report by exception?
- Section 227(4A)
- Section 227 (IA)
- Section 227 (2)
- Section 227(3)
Q23 | The auditor has to enquire, under section 227 (IA) into different aspects, related toshares allotted for cash for the purpose of auditor include
- Shares against whose allotment cash has actually been received
- Shares allotted for consideration other than cash
- Shares allotted against a debt payable
- All of them
Q24 | Right to visit branches has been given to the auditor under which section?
- Section 222(3)
- Section 228(2)
- Section 228(4)
- Section 228(3)
Q25 | Which of the following statements with regard to rules regarding exemptionfrom branch audit is not true?
- A branch office of a company can be granted exemption on the basis of quantum of activity criterion
- If a satisfactory arrangement of scrutiny check of the books of account of a branch office of a manufacturing company has been made, it can be exempted from branch audit
- Cost consideration should be considered as an important factor/ground for exemption from branch audit
- The auditor should state in his audit report that branch office is exempted by virtue of quantum of activity or any other basis