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This set of Auditing Multiple Choice Questions & Answers (MCQs) focuses on Auditing Set 1
Q1 | Goods purchased but not recorded in the purchase register is ________________
- an error of omission
- to reduce profits
- an error of commission
- affect on agreement of trial balance
Q2 | Working papers are the property of the ________________
- client and auditor
- auditor
- client
- equity shareholders
Q3 | Which of the following documents is not relevant for vouching of sales ________________
- daily cash sales summary
- credit memos
- delivery challans
- sales department attendance record
Q4 | The main object of an Audit is ________________
- to ensure that final accounts are prepared
- expression of an opinion on true and fair view of accounts
- to ensure the future viability of the enterprise
- detection and prevention of frauds and errors
Q5 | An Audit Programme must be prepared ________________
- before commencement of an audit
- after completion of an audit
- after submission of an audit report
- during the conduct of an audit
Q6 | Analytical Review is ________________
- an audit technique
- audit in depth
- a compliance procedure
- reporting requirement
Q7 | Audit in Depth means ________________
- none of the above
- detailed examination of all transactions
- investigation of all transactions
- detailed examination of selected transactions
Q8 | Audit programme should be ________________
- flexible
- rigid
- oral and flexible
- oral
Q9 | ________________ incorporates both Accounting and Administrative Controls.
- internal control
- internal check
- statutory audit
- internal audit
Q10 | Debtors are valued at ________________
- realizable value
- as per articles of association
- book value
- decided by the customer
Q11 | The main objective of Window Dressing is ________________
- increase liability
- to mislead investors
- to reduce tax liability
- to understate profits
Q12 | ________________ document is not relevant for vouching cash purchases
- purchase order
- goods inward register
- purchase invoice
- attendance record of cashier
Q13 | To select a sample for Audit, the auditor should consider ________________
- all the above
- the size of the sample
- the volume of transactions
- adequacy of internal control system
Q14 | Secret reserves are shown on ________________
- assets side of balance sheet
- none of the above
- liabilities side of balance sheet
- credit side of trading account
Q15 | Stock of goods on consignment should be valued at ________________
- none of the above
- invoice price
- cost of realizable value whichever is lower
- cost price
Q16 | ________________ is not an error of Commission
- mathematical error
- compensating error
- posting error
- none of the above
Q17 | Telephone charges should be examine on the basis of ________________
- cash memo
- telephone bill
- all the above
- agreement with telephone department
Q18 | The Auditor examines Bill of Lading in order to vouch ________________
- sales within the state
- all the above
- sales outside the state
- sales outside the country
Q19 | ________________ Asset, which is not subject to physical verification
- stock
- cash
- furniture
- debtors
Q20 | Goods sold but not recorded in Sales Register is ________________
- compensating error
- an error of commission
- an error of omission
- none of the above
Q21 | Audit plan should be best on knowledge of the ________________
- client\s reputation
- client\s family
- client\s share capital
- client\s business
Q22 | Confirmation is ________________
- a compliance procedure
- an audit technique
- a principle of audit
- none of the above
Q23 | ________________ should be checked by the Auditor in verification of Machinery
- all the above
- charge/line
- the possession
- ownership
Q24 | Closing stock with the consignee is to be shown as the Asset of ________________
- consignee
- customer
- all the above
- consignor
Q25 | If a material financial fraud is detected, Auditor should ________________
- report it to police
- report it to the institute of ca of india
- ignore it
- report it to the owners or shareholders