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This set of Practical Auditing Multiple Choice Questions & Answers (MCQs) focuses on Practical Auditing Set 1
Q1 | Auditing refers to
- Preparation and checking of account
- Examination of accounts of business units only
- Examination of accounts of professional accountants
- Checking of vouchers
Q2 | Main object of auditing is
- Detection of errors
- To find out whether P&L a/c & B/S show true and fair state affairs
- Detection of frauds
- Detection and prevention of frauds and errors.
Q3 | Auditing is luxury for a
- Joint stock company
- Partnership firm
- Small shop-keeper
- Government company
Q4 | Auditing is compulsory for
- Small scale business enterprises
- All partnership firms
- All joint stock companies
- All proprietary concerns
Q5 | Propriety audit refers to
- Verification of accounts
- Examination accounts of propriety concerns
- Enquiry against justification and necessity of expresses
- Audit of Govt. companies
Q6 | Propriety is normally undertaken in case of
- Joint stock company
- Government company
- Statutory corporation
- Govt. departments
Q7 | Interim audit refers to
- Examination of accounts continuously
- Examination of accounts intermittently
- Audit work to find out and check interim profits of a company
- Carrying on audit for bonus purposes at the end of the year
Q8 | Final audit implies
- Audit of accounts at the end of the year
- Finally checking of accounts to reveal frauds
- Audit for submitting report immediately at the end of the year
- Audit of banking companies
Q9 | A continuous audit is specially needed for
- Any trading concern
- Smaller concerns
- Banking companies
- Any manufacturing companies
Q10 | Joint audit implies
- Audit of two concerns together
- Audit of joint stock companies
- Audit of joint sector companies
- Audit by two firms of C.A
Q11 | Management audit means
- Audit undertaken on behalf of the management
- Evaluating performance of various management processes and functions
- Audit undertaken on behalf of Govt. to punish management
- Compulsory audit
Q12 | Systems audit implies
- Systematic examination of accounts
- Audit undertaken to improve auditing systems
- Enquiring accounting and control systems
- Checking the performance of management
Q13 | Internal audit means
- Audit undertaken to ascertain truth and fairness of state of affairs
- Audit undertaken internally to evaluate management functions
- Audit undertaken by employees of the organization to check financial irregularities
- Audit by independent auditor to improve internal affairs
Q14 | Internal audit is
- Compulsory for a company with paid-up capital of Rs. 25 lakh and above
- Voluntary for a company
- Not necessary for a company
- Necessary for a company
Q15 | Internal audit is undertaken
- By independent auditor
- Statutorily appointed auditor
- By a person appointed by the management
- By Government auditor
Q16 | Internal auditor is appointed by the
- Management
- Shareholders
- Government
- C & A-G
Q17 | The object of internal check is to
- Control wastage of resources
- Prevent errors and frauds
- Verify the cash receipts and payments
- Facilitate quick decision by the management
Q18 | Effective internal check system reduces
- The liability of auditor
- Work of auditor
- Both work as well as auditor
- Responsibilities of an auditor
Q19 | Internal check is a part of
- Internal audit
- Internal accounting
- External audit
- Internal control
Q20 | Internal check is carried on by
- Special staff
- Internal auditor
- Accountant
- None of the above
Q21 | Internal check is suitable for
- Larger concerns
- Smaller concerns
- Petty shop- keepers
- None of the above
Q22 | Internal check is carried on by
- Staff specially appointed for the purpose
- Internal auditor
- The members of the staff among themselves
- Supervisor of the staff
Q23 | Internal check is essential for
- Petty traders
- Cash transactions in a large concern
- A concern using automatic equipments
- None of the above
Q24 | Misappropriation of goods may be checked by
- Proper supervision over stock
- Checking of employees
- Punishment of employees
- None of the above
Q25 | Window dressing implies
- Curtailment of expenses
- Checking wastages
- Under- valuation of assets
- Over- valuation of assets