Top 250+ Solved Auditing MCQ Questions Answer
Q. Concealment of shortage by delaying the recording of cash receipts is known as
a. Embezzlement
b. Misappropriation
c. Lapping
d. None of these
Q. The title of AAS2 issued by Council of ICAI is ___
a. Objective and Scope of the Financial Statements
b. Objective and Scope of the Audit of Financial Statements
c. Objective and Scope of Business of an Entity
d. Objective and Scope of Financial Statements Audit
Q. Which of the following is not true about opinion on financial statements?
a. The auditor should express an opinion on financial statements.
b. His opinion is no guarantee to future viability of business
c. He is responsible for detection and prevention of frauds and errors in financial statements
d. He should examine whether recognised accounting principle have been consistently
Q. A sale of Rs. 25,000 to A was entered as a sale to B. This is an example of _
a. Error of omission
b. Error of commission
c. Compensating error
d. Error of principle
Q. ‘Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an exampleof _
a. Error of principle
b. Error of commission
c. Error of omission
d. Error of duplication
Q. Which of the following statements is not true?
a. Management fraud is more difficult to detect than employee fraud
b. Internal control system reduces the possibility of occurrence of employee fraud and management fraud
c. The auditor’s responsibility for detection and prevention of errors and frauds is similar.
d. All statements are correct.
Q. As per AAS4, if auditor detects an error then –
a. He should inform the management.
b. He should communicate it to the management if it is material
c. The auditor should ensure financial statements are adjusted for detected errors.
d. Both (b) and (c)
Q. Which of the following is not a limitation of audit as per AAS4?
a. Objectivity of auditor’s judgment
b. Selective testing
c. Persuasiveness of evidence
d. Limitations of internal control system.
Q. Internal audit is undertaken
a. By independent auditor
b. Statutorily appointed auditor
c. By a person appointed by the management
d. By a government auditor
Q. The scope of internal audit is decided by the :
a. Shareholders
b. Management
c. Government
d. Law
Q. Audit of banks is an example of –
a. Statutory audit
b. Balance sheet audit
c. Concurrent audit
d. All of the above
Q. Concurrent audit is a part of
a. Internal check system
b. Continuous audit
c. Internal audit system
d. None
Q. In India, balance sheet audit is synonymous to
a. Annual audit
b. Continuous audit
c. Detailed audit
d. Statutory audit
Q. Audit in depth is synonymous for
a. Complete audit
b. Completed audit
c. Final audit
d. Detailed audit