Top 250+ Solved Auditing MCQ Questions Answer

From 136 to 150 of 223

Q. Which of the following is true about explanatory notes?

a. These are given by the directors of the company

b. These are given to adhere to requirements of section 211.

c. These are given by auditors of the company in auditor’s report

d. All of the above

  • b. These are given to adhere to requirements of section 211.

Q. Which of the following is not true regarding requirements under section 227(3) (f) of the Companies Act, 1956?

a. The auditor has to satisfy himself whether any of the directors of the company, whether public or private, are disqualified from being appointed as directors as per section 274(1) (g).

b. Section 274(1) (g) is applicable to appointment of directors both in public and private companies but reporting is limited to only those directors of a company who are also directors of a public company

c. The auditor requires every director to submit a written representation in respect of each Public company, of which the is a director, as to whether such company has defaulted in terms of provisions of sections 274(1) (g)

d. The disqualification should be considered on the date of audit report.

  • d. The disqualification should be considered on the date of audit report.

Q. The management of a company, to which AS3 is not applicable, does not includestatement of cash flows in its annual report. The auditor should express

a. Unqualified opinion

b. Qualified opinion

c. Adverse opinion

d. Any of these depending upon materiality and pervasiveness and adequacy of disclosure

  • a. Unqualified opinion

Q. In case the auditor gives a disclaimer of opinion in the audit report which of thefollowing paragraph(s) of a standard unqualified audit report are modified?

a. Scope paragraph

b. Opinion paragraph

c. Scope and opinion paragraphs

d. Introductory, scope and opinion paragraph

  • c. Scope and opinion paragraphs

Q. A departure from recognized accounting principle is disclosed in a note to thefinancial statements. The auditor should

a. Issue a standard unqualified audit report

b. Issue a qualified report

c. Issue an unqualified report with ‘emphasis of matter’ paragraph

d. Disclaim opinion

  • b. Issue a qualified report

Q. Which of the following documents is not relevant for vouching cash sales?

a. Daily cash sales summary

b. Salesmen’s summary

c. Monthly statements sent to customers

d. Bank statement

  • c. Monthly statements sent to customers

Q. The auditor should examine subsequent realization of revenue such asdividends, interest, commission, etc to

a. Identify cases of unrecorded revenue

b. Ensure proper disclosure in the balance sheet

c. Recomputed accrued income on the data of balance sheet

d. Any of these

  • a. Identify cases of unrecorded revenue

Q. To test whether sales have been recorded, the auditor should draw a samplefrom a file of

a. Purchase orders

b. Sales orders

c. Sales invoices

d. Bill of loading

  • c. Sales invoices

Q. For vouching of which item, the auditor is most likely to examine cost records?

a. Commission earned

b. Bad debts recorded

c. Credit sales

d. Sale of scrap

  • d. Sale of scrap

Q. The “Guidance Note on Revenue” issued by the ICAI does not deal with

a. Sales revenue

b. Revenue rendering service

c. Revenue from sale of fixed assets

d. Income from interest, dividend

  • c. Revenue from sale of fixed assets

Q. An auditor conducts a surprise check on the pay day (i.e) the day wages andsalaries are paid. The primary purpose of this audit procedure is

a. To ensure that there are no ghost workers

b. To ensure the casual workers employed are authorized by the supervisor

c. To test procedures for distributing pay cheques

d. To obtain understanding of internal control system

  • c. To test procedures for distributing pay cheques

Q. Which of the following would prevent double payment of the same voucher?

a. The person signing the cheque should cancel the supporting documents

b. Cheques should be signed by at best two persons

c. The data of payment of vouchers of similar nature should be the same or close to each other

d. All of the above

  • a. The person signing the cheque should cancel the supporting documents
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