Top 150+ Solved Audit Taxation MCQ Questions Answer
Q. An auditor who accepts an audit but does not possess the industry expertiseof the business entity should
a. engage experts
b. obtain knowledge of matters that relate to the nature of entity’s business
c. inform management about it
d. take help of other auditors.
Q. Audit in depth is synonymous for
a. Complete audit
b. Completed audit
c. Final audit
d. Detailed audit.
Q. Which of the following statements is, generally, correct about thereliability of audit evidence?
a. To be reliable, evidence should conclusive rather than persuasive
b. Effective internal control system provides reliable audit evidence
c. Evidence obtained from outside sources routed through the client
d. All of the Above.
Q. When is evidential matter, generally, considered sufficient?
a. When it constitutes entire population
b. When it is enough to provide a basis for giving reasonable assurance regarding truthfulness
c. When it is objective and relevant
d. When auditor collects and evaluates it independently.
Q. For what minimum period should audit working papers be retained by audit firm?
a. For the time period the entity remains a client of the audit firm.
b. For a period of ten years
c. For a period auditor opines them to be useful in servicing the client
d. For the period the audit firm is in existence.
Q. Who is responsible for the appointment of statutory auditor of a limited company?
a. Directors of the company.
b. Members of the company.
c. The Central Government.
d. All of the above.
Q. Which of the following sections deal with qualifications of the auditor ?
a. Section 226 (1) and section 226(2).
b. Section 224 (1) and section 224 (2).
c. Section 226 (3) and section 226(4).
d. Section 224(3) & Sec.224.
Q. Which of the following statement is not true?
a. A partnership firm can be appointed as a statutory auditor of limited company.
b. Appointment can be made in the name of the firm.
c. Majority of the partners should be practicing in India.
d. All partners should be chartered accountants.
Q. As per the requirements of section 226(3) and 226(4) a person is disqualifiedfrom being appointed as a statutory auditor if he holds………………
a. Equity shares or debentures of the company.
b. Equity shares carrying voting of the company.
c. Shares carrying voting rights of the company.
d. Security carrying voting rights of the company.
Q. The board of directors shall appoint first auditor of a company.
a. With in one month of completion of capital subscription state of the company.
b. With in one month of the promotion of the company.
c. With in one month of the commencement of the business of the company.
d. With in one month of incorporation of the company.
Q. The term of the auditor ship of first auditor would be from the date of appointmenttill………………………….
a. the conclusion of statutory meeting.
b. the conclusion of first annual general meeting.
c. the conclusion of next annual general meeting.
d. the date of removal.
Q. In case the directions fail to appoint first auditor (s), the shareholders shallappoint them at…..by passing a resolution
a. a general meeting.
b. first annual general meeting.
c. statutory meeting.
d. annual general meeting.
Q. Life Insurance Corporation of India holds twenty five percent of subscribed capital of XYZ Ltd. The appointment of statutory auditor in XYZ Ltd. Would be by…………………..
a. ordinary resolution.
b. special resolution.
c. (a) or (b).
d. none of the above.
Q. ---------------- audit is compulsory for joint stock companies
a. Statutory
b. Final
c. Continuous
d. none
Q. Deduction under section 80-HHE is related to :
a. Export of computer software, technical services outside Indi
b. Foreign projects.
c. Business of exports.
d. Backwards industries