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WorksheetsAuditing Unit 1
Total questions: 25
Worksheet time: 7mins
Auditing means
Detection and prevention of frauds
Detection and prevention of errors and frauds
Detection and prevention of errors
Controlling of accounts
The first auditor of a company will hold office
For a period of one year
Till holding of statutory meeting
Till the conclusion of first annual general meeting
Till a new auditor is appointed
Who is responsible for the appointment of statutory auditor of a limited company?
Directors of the company
Members of the company
The Central Government
All of the above
Who among the following is eligible to appoint an auditor of Government company?
An individual not passing CA
A chartered accountant whether in practice or not
By C & AG
A chartered accountant in practice
Audit of banks is an example of
Statutory audit
Balance sheet audit
Concurrent audit
Both (a) and (b)
All of the above
In India, balance sheet audit is synonymous to
Annual audit
Continuous audit
Detailed audit
Statutory audit
Audit in depth is synonymous for-
Complete audit
Completed audit
Final audit
Detailed audit
Balance sheet audit includes verification of
Assets
Liabilities
Income and expense accounts where appropriate
All of the above
Who among the following can be appointed as auditor of a company?
A partner or a director of a company
A person of unsound mind
Mr. who owes Rs.500 to the company
Mr. Z the holder of C.A certificate
What is the first step of an Auditor to do Audit?
Collecting Evidence
Planning
The purpose of an Audit plan is to determine why, How when and by whom the audit will be performed
True
False
The scope of Auditing is _____________
Detection of fraud and errors
Judging the fair presentation of financial statements
Reporting on Financial position of Business enterprises
All the above
Auditing is done to ascertain the accuracy of financial statements provided by the organization
TRUE
FALSE
An Auditor can hold the audit of not more than ------- companies
20
15
10
30
Auditing is done to ascertain the accuracy of financial statements provided by the organization
TRUE
FALSE
Which of the following is not true about opinion on financial statements
The auditor should express an opinion on financial
His opinion is no guarantee to future viability of business
He is responsible for detection and prevention of frauds and errors in financial statements
He should examine whether recognised accounting principle have been consistently
An audit of financial statements is conducted to determine if the
A.Client’s internal control is functioning as intended.
B. Organization is operating efficiency and effectively.
C. Auditee is following specific procedures or rules set down by some higher authority.
D. Overall financial statements are stated in accordance with the applicable financial reporting framework.
Which of the following statements is not a distinction between independent auditors and internal auditors?
A. Independent auditors represent third party users external to the auditee entity, whereas internal auditors report directly to management.
B. Internal auditors are employees of the auditee, whereas independent auditors are independent contractors
C. Although independent auditors strive for both validity and relevance of evidence, internal auditors are concerned almost exclusively with validity.
D. The internal auditor’s span of coverage goes beyond financial auditing to encompass operational and performance auditing
Which of the following has the primary responsibility for the fairness of the representations made in the financial statements?
A. Client’s management.
B. Audit Committee.
C. Independent auditor.
D. Board of Accountancy.
Which of the following statements does not describe a condition that creates a demand for auditing?
A. Expertise is often required for information preparation and verification.
B. Conflict between an information preparer and a user can result in biased information.
C. Information can have substantial economic consequences for a decision-maker.
D. Users can directly assess the quality of information.
Auditor’s primary responsibility is to detect errors and frauds.
TRUE
FALSE
Recording a transaction twice in the books of original entry is an error of __________
Principle
Commission
Duplication
What are the techniques of verification?
Inspection
Observation
Confirmation
all the above
Which of the following describe the true relationship between auditor, client and external users?
A. Management provides capital to external users and auditor is hired to provide report relied upon by users for assurance.
B. External users rely on auditor’s report assurance to reduce information risk provided by management
C. Auditor ensure report are based on management decision on the economic event to be presented to external users
D. Management and auditor provide financial statement to external users
The distinction between the role of auditor and accountant can be best describe as
A. Accountant provide financial information for decision making while auditor determine whether the information properly reflects the economic events of the accounting period.
B. Accountant must have a thorough understanding of the principles and rules to prepare financial statement while auditor rely on the theory of evidence to verify the financial statement.
C. Auditor is responsible for detection and prevention of error and frauds while accountant ensure the credibility and quality dimension of financial statement.
D. Auditor must possess expertise in the accumulation and interpretation of audit evidence while accountant need to be expert in understanding the principles and rules.
