1. is a systematic examination
of the books and records or a
business.
A. Auditing.
B. Vouching.
C. Verification.
D. Checking.
ANSWER: A
2. Which of the following are not
objectives of auditing?
A. Ascertain the profit and
preparation of P/L Account, Balance
sheet.
B. Detection and prevention of
frauds and errors.
C. Give a true and fair view of
financial amount.
D. To submits the accounts to
Government of India.
ANSWER: D
3. Which of the following is not a
kind of audit?
A. Statutory and private audit.
B. Government and continuous
audit.
C. Continuous, final, Interim,
Cash, Cost and Management audit.
D. None of these.
ANSWER: D
4. An audit which is compulsory by
the law .
A. Government audit.
B. Internal audit.
C. Cost audit.
D. Statutory audit.
ANSWER: D
5. Instruction of audit issued by
controller and auditor general of
India .
A. Statutory audit.
B. Final audit.
C. Management audit.
D. Government audit.
ANSWER: D
6. Audit done by the employees of
the business undertaking is called.
A. Final audit.
B. Management audit.
C. Government audit.
D. Government audit.
ANSWER: B
7. This kind of audit is conducted
generally between two annual
audits.
A. Internal audit.
B. Interim audit.
C. Final audit.
D. Continuous audit.
ANSWER: B
8. Management audit otherwise
called as .
A. Final audit.
B. Efficiency audit.
C. Cost audit.
D. Cash audit.
ANSWER: B
9. A number of checks and
controls exercised in a business to
ensure its efficient working are
known as.
A. Internal check.
B. Internal control.
C. Internal audit.
D. Interim check.
ANSWER: B
10. Voucher relates to .
A. Cash receipt.
B. Cash payment.
C. Credit transactions.
D. All the above.
ANSWER: D
11. Internal check is meant for.
A. Prevention of frauds.
B. Detection of frauds.
C. Helping audit is depth.
D. Detection of errors.
ANSWER: A
12. Internal auditor is appointed
by.
A. The management.
B. The shareholders
C. The government.
D. The statutory body.
ANSWER: A
13. Auditing begins where _ ends.
A. Selling.
B. Inventory valuation.
C. Accounting.
D. Purchases.
ANSWER: C
14. A kind of audit conducted
for a part of the accounting year is
called.
A. Periodical audit.
B. Partial audit.
C. Cost audit.
D. Interim audit.
ANSWER: A
15. For which of the following,
Audit is optional?
A. Trusts.
B. Joint stock companies.
C. Proprietorship concern.
D. None of the above.
ANSWER: C
16. The audit that is made
compulsory under statute is
called.
A. Statutory audit.
B. Partial audit.
C. Complete audit.
D. Continuous audit.
ANSWER: A
17. The receipt of goods must be
entered in _.
A. Goods inward book.
B. Goods outward book
C. Receipt of Stores.
D. Receipt issue and balance of
stores
ANSWER: A
18. Auditing standards differ
from auditing procedures in that
procedures relate to.
A. Measure of performance.
B. Audit principles.
C. Acts to be performed.
D. Audit judgments.
ANSWER: C
19. Confirmation of the court is
necessary for.
A. Increasing the share capital.
B. Reduction of share capital.
C. Conversion of shares into stock.
D. Issue of new shares.
ANSWER: B
20. Profit prior to incorporation
may be utilized to.
A. Write of goodwill
B. Pay interest on purchase
consideration
C. Writing off fixed assets.
D. All the above.
ANSWER: A
21. An audit programme is _.
A. A description, memorandum or
an outline of the work to be done in
a business.
B. The rules and regulations
prescribed for writing up the books
of accounts.
C. To gain knowledge of clients
accounting system.
D. A trial work.
ANSWER: B
22. An auditor of a company will
be held liable under the companies
act.
A. If the destroys, mutilates, secrets
etc., any documents, vouchers,
books etc., with a view to deceive
any person.
B. If he has examined all the
documents of the company.
C. If he has not contravened the
provisions of sec.227.
D. If he is an auditor of the
company.
ANSWER: A
23. The main object of the audit of
the cash book may be.
A. To verify the assets and
liabilities.
B. To know that all receipts and
payments have been properly
recorded.
C. To check the internal control
system in business
D. To check the bank balance.
ANSWER: B
24. The purpose of the audit of
wage payment is to determine
that.
A. The work is executed completely
for which the workers are paid
wages.
B. The workers are paid the correct
amount of wages under proper
authorization.
C. The workers are working
regularly.
D. None of the above.
ANSWER: B
25. One of the audit procedures to
check the issue of share capital of
the newly formed company is.
A. The memorandum of association
and articles of association.
B. The share transfer register.
C. The issue of debenture.
D. None of the above.
ANSWER: A
26. Capital reserves are created
out of profits of.
A. A revenue nature.
B. A capital nature.
C. A secret reserve.
D. Contingency reserve.
ANSWER: B
27. A good audit report must at
least meet one of the following
qualifications _.
A. It should offer constructive and
timely suggestions to the
management.
B. It should not point out mistakes.
C. It should not be based on factual
information.
D. It should not be based on balance
sheet.
ANSWER: A
28. The work of one clerk is
automatically check by another
clerk is called.
A. Internal control.
B. Internal check.
C. Internal audit.
D. None of the above.
ANSWER: B
29. The owners of the company
are called _.
A. Debenture holders.
B. Debtors.
C. Shareholders.
D. None of the above.
ANSWER: C
30. Verification is.
A. The art of recording the business
transaction.
B. An examination of the books of
accounts.
C. The act of establishing the
accuracy of entries in the books of
accounts.
D. None of the above.
ANSWER: C
31. Depreciation is.
A. The decrease in the value of an
asset.
B. The increase in the value of an
asset.
C. An appreciation to the company.
D. A credit to shareholders.
ANSWER: A
32. The main objects of
investigation are.
A. To discover errors and frauds.
B. To prevent errors and frauds.
C. To verify statements.
D. All the above.
ANSWER: D
33. Internal controls and internal
check are.
A. One and the same.
B. Different.
C. Internal control includes internal
check.
D. None of the above.
ANSWER: C
34. Share may be issued.
A. At par.
B. At premium.
C. At discount.
D. All the above.
ANSWER: D
35. The liabilities of an auditor
can be.
A. Civil.
B. Criminal.
C. Civil and Criminal.
D. Official.
ANSWER: C
36. An auditor is like a.
A. Watchman.
B. Foolish dog.
C. Mad dog.
D. Watch dog.
ANSWER: B
37. Special audit is necessary for.
A. Inefficient concern.
B. Processing concern.
C. Trading concern.
D. Manufacturing concern.
ANSWER: A
38. The first auditors appointed hold
office.
A. For a period of one year.
B. For a period of two years.
C. For a period of three years.
D. Till the conclusion of the first
annual general meeting.
ANSWER: D
39. Audit of company account is.
A. Compulsory.
B. Unnecessary.
C. Avoidable.
D. Depends upon directors.
ANSWER: A
40. The company‟s auditor is
expected to give.
A. His expert opinion about the
accounts.
B. A factual position about the
accounts.
C. A critical review of the accounts.
D. Financial assistance.
ANSWER: A
41. Internal auditor of a company
must be.
A. Cost accountant.
B. Chartered accountant.
C. ICWA
D. Need not possess any
professional qualification.
ANSWER: B
42. Auditors of a joint stock
company are appointed by.
A. Directors of the company.
B. Annual general meeting.
C. Election at the annual general
meeting.
D. Debenture holders.
ANSWER: C
43. A company auditor can be
removed by.
A. Board of directors.
B. Managing director.
C. Any director.
D. General meeting.
ANSWER: D
44. A vacancy caused by
resignation of an auditor is filled
by.
A. Board of directors.
B. Managing director.
C. General meeting.
D. Central government.
ANSWER: C
45. Audit in depth means .
A. Audit of each and every item.
B. Intensive audit of each and every
item.
C. Intensive audit of a few items.
D. Audit of a few selected items.
ANSWER: C
46. Concurrent audit is a part of.
A. Internal check system.
B. Continuous audit.
C. Internal audit system.
D. Final audit.
ANSWER: C
47. In India balance sheet audit is
synonymous to.
A. Annual audit.
B. Continuous audit.
C. Detailed audit.
D. Statutory audit.
ANSWER: A
48. Audit in depth is synonymous
for.
A. Complete audit.
B. Completed audit.
C. Final audit.
D. Detailed audit.
ANSWER: D
49. Balance sheet audit included
verification of.
A. Assets.
B. Liabilities.
C. Income and expenditure accounts
where appropriate.
D. All of the above.
ANSWER: D
50. Which of the following
statements is not true about
continuous audit?
A. It is conducted at regular interval.
B. It may be carried out on daily
basis.
C. It is needed when the
organisation has a good internal
control system.
D. It is expensive.
ANSWER: C
51. Which of the following is not a
fact of EPA?
A. Economic audit.
B. Efficiency audit.
C. Expenditure audit.
D. Effectiveness audit.
ANSWER: C
52. Balance sheet does not include.
A. Verification of assets and
liabilities.
B. vouching of income and
expense accounts related to assets
and liabilities.
C. Examination of adjusting and
closing entries.
D. Routine checks.
ANSWER: D