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Basic Auditing MCQs Quiz 6

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Question 1

Which of the following statement is true regarding an auditor’s working papers?

Score: 1 of 1
Your answerChoice

They help the auditor to monitor the effectiveness of the audit firm’s quality control

They document the level of independence maintained by the auditor

Selected

They should be considered as the principle support for the auditor’s report

They should not contain details regarding weaknesses in the internal control system

Question 2

Which of the following statements is, generally, correct about the reliability of audit evidence?

Score: 1 of 1
Your answerChoice
Selected

Effective internal control system provides reliable audit evidence

To be reliable, evidence should conclusive rather than persuasive

Evidence obtained from outside sources routed through the client

All are correct.

Question 3

Which of the following statements is not correct about materiality?

Score: 0 of 1
Your answerChoice

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

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

Selected

Materiality is a relative concept

Materiality judgments involve both quantitative and qualitative judgments

Question 4

Which of the following statements is not true about continuous audit?

Score: 0 of 1
Your answerChoice
Selected

It may be carried out on daily basis

It is expensive

It is conducted at regular interval

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

Question 5

Which of the following are you unlikely to see in the current file of auditors’ working papers?

Score: 1 of 1
Your answerChoice

Summary of unadjusted errors

Selected

Memorandum & articles of association

Details of the work done on the inventory count

Audit planning memorandum

Question 6

For companies required to produce interim financial statements (IFI):

Score: 0 of 1
Your answerChoice
Selected

the same firm should audit the IFI and the financial statements for the year as a whole.

one accountancy firm should review the IFI and a different firm should audit the financial statements for the year as a whole.

the same firm should review the IFI and the financial statements for the year as a whole.

one audit firm should audit the IFI and a different firm should audit the financial statements for the year as a whole.

Question 7

The fundamental objective of the audit of a company is to_____________?

Score: 0 of 1
Your answerChoice
Selected

Detect and prevent errors and fraud

Attest to the credibility of the company’s accounts

Assess the effectiveness of the company’s performance

Protect the interests of the minority shareholders

Question 8

Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of____________?

Score: 0 of 1
Your answerChoice

Error of commission

Selected

Error of omission

Error of duplication

Error of principle

Question 9

Goods sold on the basis of ‘sales or return ‘ should:

Score: 0 of 1
Your answerChoice

Be included in the stock

Selected

None of the above

Not be checked by auditor

Not be included in the stock

Question 10

How many Standards on Auditing have been issued?

Score: 1 of 1
Your answerChoice

34

Selected

38

32

36

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