auditing mcqs

Adverse opinion

Disclaimer of opinion

Unqualified opinion

Qualified opinion

unqualified opinion

qualified opinion

disclaimer of opinion

unqualified opinion with reference to notes to the accounts

It is expensive

It may be carried out on daily basis

It is needed when the organization has a good internal control system

It is conducted at regular interval

At the planning state, the auditor considers materiality at the financial statement level only

Materiality is a relative concept

Materiality judgments involve both quantitative and qualitative judgments

Auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of an informed decision maker who will rely on the financial statements

Prior year’s errors

Adjusted interim financial statements

The auditor’s remuneration

Prior year’s financial statements

Vouching

Verification

Auditing

Checking

Lower, Higher, Lower

Lower, Lower, Higher

Higher, Lower, Lower

Lower, Higher, Higher

B. Lower, Lower, Higher

Lower, Higher, Higher

Lower, Higher, Lower

Higher, Lower, Lower

Obtain a copy of the existing auditor’s letter of engagement

Obtain the client’s permission to communicate with the existing auditor

Obtain the existing auditor’s working papers

Obtain a copy of the company’s most recent board minutes

Owned by the auditor

Retained in auditor’s office until a change in auditors

Owned by the client

Evidence for audit conclusions

Curtailment of expenses

Checking of Wastages

Over Valuation of assets

Under valuation of assets

Only (and (C.

Erstwhile director

Relative of a director

Internal auditor

Members of the company

Directors of the company

All of the above

The Central Government

Taking management decisions

Preparation of accounting records

Preparing tax computations

Advising on weaknesses in the internal control systems

Conducting the inventory count

Obtaining and evaluating audit evidence on the financial statements

Calculating the year-end accruals figure for inclusion in the accounts

Providing representations to management

All of above 

Unqualified opinion

Adverse opinion

Qualified opinion

Previous years

Budget

Other audit clients

Other companies in the same industry

They are the best source of audit evidence

They should be used only when there is other substantive audit evidence to complement it

Shareholders receive a copy of all material written representations

They should be used only when there is a lack of other substantive audit evidence

These are given by the directors of the company

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

All of the above

These are given to adhere to requirements of section 211.

Standards on Assurance Engagement

Standards on Review Engagement

Standard on Quality Control

Standards on Auditing

Comparing aggregate wages paid to number of employees

Tracing of purchases recurred in the purchase book to purchase invoices.

Comparing the actual costs with standard costs

All of them are analytical procedure

Basis of the opinion

Involvement of any specialist

Statement of responsibilities of directors and auditors

Introductory paragraph specifying the pages to which the report relates and the accounting convention adopted

Daily cash sales summary

Bank statement

Monthly statements sent to customers

Salesmen’s summary

1, 2 and 4 only

1, 3 and 4 only

1, 2 and 3 only

2, 3 and 4 only