101. In case of sales return, the
auditor should examine which
documents?
A. Credit notes, advice notes and
inward return notes.
B. Debit notes advice notes and
inward return notes.
C. Purchase invoices advice
notes and inward retu7r2n notes.
D. Credit notes, inspection report
and inward return notes.
ANSWER: D
102. Which of the following is
most crucial to a purchase
department?
A. Reducing the cost of acquisition.
B. Selecting supplies.
C. Authorizing the acquisition of
goods.
D. Assuring the quality of goods.
ANSWER: C
103. The creditor‟s accounts
generally, have credit balance.
Debit balance may be due to.
A. Advance paid against an order.
B. Goods returned.
C. Wrong debit to supplier account.
D. Any of the above.
ANSWER: D
104. Which of the following is not
true with regard to verification of
assets?
A. It invoices substantiation of
occurrence of transactions.
B. Its objective is to establish
existence, ownership, possession,
valuation and disclosure of assets.
C. The auditor has to form an
opinion on different aspects.
D. The auditor has to form an
opinion on managerial aspects.
ANSWER: A
105. Which of the following
statements is not true?
A. Valuation of assets is the
responsibility of management.
B. The auditor can rely on a
certificate issued by an authorized
valuationer as to the valuation of
assets in the balance sheet.
C. The auditor should have the asset
as per generally accepted accounting
principles.
D. Valuation is not part of auditor
duty.
ANSWER: C
106. For granting subsidy to the
sick units, the audit required
would be.
A. Financial audit.
B. Internal audit.
C. Management audit.
D. Statutory audit.
ANSWER: A
107. Surprise checks are part of _.
A. An auditor working papers.
B. An audit programme.
C. An auditor’s report.
D. An accounting standard.
ANSWER: B
108. Statutory auditor of a
company is the case of a casual
vacancy may be appointed by the.
A. Board of directors.
B. Managing director.
C. Extraordinary general meeting.
D. Government concerned.
ANSWER: A
109. The auditor of a company
not supposed to issue qualified
report when.
A. Goodwill worth Rs.100000 built
up when the company is not shown
in the balance sheet.
B. Goodwill is shown in the balance
sheet although it has been totally
lost.
C. Balance sheet and profit and loss
account show a true and correct
view of the company affair and are
drawn in conformity with law.
D. Proper books of accounts as
required by law have been refused
access to some of these books.
ANSWER: D
110. Consider the following
activities: valuation, verification,
vouching
A. 3,1,2
B. 3,2,1
C. 2,3,1
D. 1,2,3
ANSWER: A
111. Which of the following pairs
are correctly matched?
A. Test Check - Random Checking.
B. Internal Check - A system of
automatic checking.
C. Internal control- Includes internal
check and internal audit.
D. Investigation - General
examination of all accounting
records.
ANSWER: D
112. Audit Note Book is a.
A. Personal notebook of an auditor.
B. Record of important points and
enquires which an auditor has to
refer to his clients.
C. Records of mistake and errors
detected during the course of audit
of account books.
D. Record of work performed by an
auditor.
ANSWER: C
113. By observing, testing and
assessing, an auditor examines the
system of.
A. Internal audit.
B. Internal control.
C. Continuous audit.
D. Statutory audit.
ANSWER: B
114. An auditor of a partnership
firm is appointed as per.
A. Status.
B. Government orders.
C. Agreement.
D. Convention.
ANSWER: C
115. A company auditor may be
removed in the meeting of the.
A. Board of directors when the
managing director is also present.
B. Board of directors.
C. Majority shareholders.
D. General body of shareholders.
ANSWER: D
116. Management audit is
conducted by.
A. The statutory auditor.
B. Government auditor.
C. Cost auditor.
D. None of these.
ANSWER: D
117. Internal auditor is
appointed by the.
A. Shareholders of the company.
B. Statutory auditor.
C. Institute of internal auditors of
India.
D. Board of directors of the
company.
ANSWER: D
118. In case of audit of statutory
report, an auditor is expected to
give his report on the.
A. Number of shares allotted,
amount received in cash and
summarized, Receipt and payment
account.
B. Authorized capital, subscribed
capital and paid-up capital.
C. Profit and loss account,
Balance sheet and Directors report.
D. Director qualification calls in
arrears and calls in advance.
ANSWER: A
119. Sampling is used in the case
of.
A. Collection of debts by the
accountant.
B. Test checks by the auditor.
C. Checking pass-book entries by
the accountant.
D. Suppression by the works
managers.
ANSWER: B
120. A continuous audit is not
suitable where the.
A. Transactions are few but
complicated.
B. There is no urgency to finalize
the accounts on a particular date.
C. Internal work is being carried on
in a satisfactory manner.
D. System of internal check in
operation is not satisfactory.
ANSWER: C
121. Management audit is.
A. An independent appraisal of the
total a management process.
B. A statutory requirement.
C. An investigation into the conduct
of director.
D. An independent appraisal of
competitiveness of business.
ANSWER: A
122. Management audit is ordered
by the.
A. Workers of a company.
B. Government.
C. Board of directors.
D. SEBI.
ANSWER: C
123. The remuneration of an
auditor of partnership firm is
fixed by.
A. The Partnership Act.
B. The Companies Act.
C. The Government.
D. None of these.
ANSWER: D
124. As far as a company is
concerned, which one of the
following pairs is not correctly
matched?
A. Internal audit - Obligatory.
B. Statutory audit - Mandatory.
C. Continuous Audit - Optional.
D. Management - Voluntary.
ANSWER: A
125. A file which contains rules
governing the organisation under
audit is known as .
A. Convert file.
B. Permanent file.
C. Routine file.
D. Precedence file.
ANSWER: B
126. Special audit of the accounts
of a company is directed by.
A. Shareholders of the company.
B. Comptroller and auditor
general of India.
C. Company law board.
D. Central government.
ANSWER: D