Classification of Audit MCQS With Answers

2. Classification of Audit

111, Continuous Audit is carried on –

(a) At the end of the year

(b) At the mid of the year

(d) None of these

112, Continuous audit is suitable –

(a) For big institutions (✓)

(b) For small institutions

(d) None of these

113, Which of the following audit year?

(a) Final audit

(b) Continuous audit (✓)

(d) Internal audit

114, In which of the following case, continuous audit becomes necessary –

(a) To make intensive check of accounts

(b) When internal check system is not followed organisation in the

(d) All of these (✓)

115, Which of the following proves helpful in declaration of Interim dividend –

(a) Periodical Audit

(b) Balance Sheet Audit

(d) All above

116, Which of the following is not a advantage of continuous audit –

(a) Early detection of errors and frauds

(b) Intensive checking of books of accounts

(d) All above

117, Which of the following is not a disadvantage of continuous audit?

(a) Possibility of alteration in figures

(b) Inconvenience of work

(d) Intensive check of accounts (✓)

118, In which of the following, there is more possibility of secret pact with employees –

(a) Continuous Audit (✓)

(b) Periodical Audit

(d) Interim Audit

119, The effect of auditor on employees by continuous audit –

(a) Increases

(b) Decreases (✓)

(d) None of the above

120, Periodical Audit is carried on –

(a) At the mid of the financial year

(b) At the end of the financial year (✓)

(d) None of these

121, Final Audit can also be termed as –

(a) Annual Audit

(b) Balance Sheet Audit

(d) All of these (✓)

122, Periodical Audit is started –

(a) After preparing final accounts (✓)

(b) Before preparing final accounts

(d) None of above Sonal

123, Which of the following type of audit is suitable for small concerns –

(a) Continuous Audit

(b) Periodical Audit

(e) Balance Sheet Audit

(d) Both above (b) and (c) (✓)

124, Which of the following is suitable form of audit when there exists strong internal check system –

(a) Continuous Audit

(b) Periodical Audit (✓)

(d) Partial Audit

125, Advantage of periodical audit is –

(a) Helpful in declaration of Interim dividend

(b) Quick preparation of Final accounts

(d) All above

126, In which of the following there is more possibilities in alteration of figures –

(a) Continuous Audit (✓)

(b) Final Audit

(d) None of these

127, Periodical Audit is an audit in which –

(a) Balance sheet of number of years is audited

(b) Audit is done at the end of the financial year (✓)

(d) None of these

128, Balance Sheet Audit is useful when –

(a) The concern is a big one

(b) The concern is a small one (✓)

(d) None of these

129, The scope of interim audit falls within the purview –

(a) Partial Audit

(b) Final Audit (✓)

(d) None of these

130, Interim audit is get done –

(a) At the beginning of the year

(b) At the end of the year

(d) None of the these

131, Management Audit is –

(a) Compulsory

(b) Voluntary (✓)

(d) None of these

132, Under balance sheet audit examination is done –

(a) Fixed Assets only

(b) Fixed Liabilities only

(d) None of these

133, Under Management audit examination is done of the –

(a) Work of the employees

(b) Work of auditor

(d) None of these.

134, The Audit which is opted by a Insurance Company is –

(a) Annual audit (✓)

(b) Interim audit

(d) None of these

135, What is necessary to measure the efficiency of a manager?

(a) Social audit

(b) Cost audit

(d) Management audit (✓)

136, Management Audit is a valuation of –

(a) Cost Accounts

(b) Financial Accounts.

(d) Assets and Liabilities

137, Which type of audit is followed by Banking Companies –

(a) Annual Audit (✓)

(b) Interim Audit

(d) Partial Audit

138, Continuous Audit is beneficial for –

(a) Banks

(b) Railway

(d) All of these (✓)

139, “The continuous audit is one which of commenced and carried on before the close of the financial year to which it relates”. This is defined by –

(a) S.W. Rowland (✓)

(b) Spicer and Pegler

(d) None of these

140, Which of the following is advantage of continuous audit –

(a) Early detection of errors and frauds

(b) Quick publication of final accounts

(d) All of these (✓)

141, Which of the following is a feature of continuous audit –

(a) Highly expensive (✓)

(b) Uninterrupted work

(d) All above

142, Audit which is done at the time of admission of a new partner is called –

(a) Casual Audit (✓)

(b) Standard Audit

(d) Interim Audit

143, If only a part of the accounts of a business are examined, it is termed as –

(a) Casual Audit

(b) Standard Audit

(d) Interim Audit

144, Audit is not a guarantee of cent percent truth –

(a) This statement is correct (✓)

(b) This statement is incorrect

(d) None of these

145, Feature of Periodical Audit is –

(a) No fear of alternation of figures

(b) Economical

(d) All of these (✓)

146, Which of the following type of audit make hurdle in routine works of enterprise –

(a) Continuous Audit (✓)

(b) Periodical Audit

(d) Partial Audit

147, In which of the following of Audit there remain no scope of alteration in figures –

(a) Continuous Audit

(b) Periodical Audit (✓)

(d) Partial Audit

148, In which of the following audit publishing of final accounts –

(a) Continuous Audit

(b) Periodical Audit (✓)

(d) Partial Audit

149, “A continuous audit is one where Auditor Staff is occupied continuously on the accounts the whole year round”, this is defined by –

(a) Spicer and Pegler

(b) Rowland

(d) None of these

150, “A final or completed audit is that which is commenced after the end of financial year of which it relates”. This is defined by –

(a) W.W. Bigg

(b) Rowland

(d) Spicer and Peglar

151, In which country Balance Sheet Audit means the audit of only Balance Sheet?

(a) In Japan

(b) In China

(d) In England

152, To sell the business which type of audit is carried on –

(a) Periodical Audit

(b) Continuous Audit

(d) None of these

153, Existence of internal audit system does not reduce the desirability of –

(a) Annual Audit (✓)

(b) Interim Audit

(d) Continuous Audit

154, Comptroller and Auditor General of India is appointed by –

(a) Central Government

(b) ICAI

(d) None of these

155, To make audit of Government Offices, auditor appointed by –

(a) ICAI

(b) President

(d) None of these

156, Comptroller and Auditor General of India submits its audit report to –

(a) President (✓)

(b) Prime Minister

(d) None of these

157, Qualification of an Internal Auditor is –

(a) C.A.

(b) C.S.

(d) No qualification is determined (✓)

3. Audit Process

158, “An audit programme is flexibly planned procedure of examination”, this is defined by –

(a) Kohlar

(b) Arthur W. Holmes (✓)

(d) None of above

159, Which is the essential quality of an audit programme –

(a) Division in

(b) Fixing responsibilities

(d) Flexibility (✓)

160, An audit programme must be –

(a) Flexible

(b) Detailed

(d) All of these (✓)

161, Which of the following is a merit of audit programme?

(a) Division of work according to capability

(b) Fixed responsibilities

(d) All of these (✓)

162, Which of the following is disadvantage of audit programme?

(a) Mechanised work

(b) Lack of independent decisions

(d) All above (✓)

163, Before the audit of a new institution –

(a) Scope is determined

(b) Nature of the institution is studied

(d) All of the above (✓)

164, Audit programme should be –

(A) Written (✓)

(b) Verbal

(d) None of these

165, An audit programme is chalked out for the following purpose

(a) For incoming and outgoing of auditor

(b) For routine checking

(d) For inspection of branches of company

166, In audit programme, audit work planning is done by –

(a) Accounts staff

(b) Audit staff (✓)

(d) Managing director

167, Audit programme should –

(a) Rigid

(b) Mechanised

(d) Elastic (✓)

168, Use of working papers are necessary as it is –

(a) A statutory requirement

(b) Helps to inspect the work of assistants

(d) Beneficial for auditor (✓)

169, Audit note book contains –

(a) Dates of reference

(b) Detail of work done

(d) All above (✓)

170, The auditor obtains the working papers –

(a) In the course of the audit (✓)

(b) Before starting audit

(d) None of these

171, Audit working papers are the property of –

(a) Owner of the business

(b) Auditor (✓)

(d) None of these

172, For which of the following purpose, auditor keeps working papers –

(a) To use them as reference

(b) As a proof of his work

(d) All of these (✓)

173, Which of the following case is related with ownership working papers –

(a) Ipswich Mills vs. Dillon, 1927 (✓)

(b) Kingston Cotton Mills

(d) Mackson and Robbins

174, Which is the advantage of Audit Note Book –

(a) Make auditor free from memorising the facts

(b) Helpful in audit work

(d) All above (✓)

175, Which of the following work perview in routing checking?

(a) Checking of elementary books

(b) Rectification of errors

(d) All of these (✓)

176, Main objective of Routine checking is –

(a) To check mathematical accuracy of the entries of elementary books and accounts

(b) To check the follow-up of accounting principles

(d) All above (✓)

177, By Routine checking –

(a) Expenses of business increase

(b) Expenses of business decrease

(d) None of these

178, Routine checking is done by –

(a) Employees of the concern (✓)

(b) Auditors

(d) All of these

179, Test checking means –

(a) Detailed checking of some transactions/items

(b) Checking of each item

(d) None of these

180, Test checking is beneficial when –

(a) Number of business transactions is less

(b) Internal check system is satisfactory (✓)

(d) None of these

181, Test checking is appropriate –

(a) Large business concerns

(b) Huge number of transactions

(d) All above (✓)

182, Test checking……….. the responsibility of auditor –

(a) Increases (✓)

(b) Decreases

(d) None of these

183, If there arise loss to employer due to adopting test checking, then auditor is………. for loss.

(a) Liable (✓)

(b) Not liable

(d) None of the above

184, Test checking refers to –

(a) Testing of accounting records

(b) Testing of honesty of employees

(d) Checking of all transactions recorded

185, In a big organisation where number of transactions are numerous, auditor check –

(a) All transactions

(b) Some transaction selected as sample (✓)

(d) Some transactions of each month

186, Test checking is done to –

(a) Find out errors

(b) Detect frauds

(d) None of these

187, Audit note book is a –

(a) Audit planning

(b) Audit programming

(d) Checking of arithmetical accuracy of accounting records

188, Routine checking discovers –

(a) Clerical errors and ordinary frauds (✓)

(b) Planned frauds

(d) None of the above

189, Test checking reduces the –

(a) Auditor’s work (✓)

(b) Auditor’s responsibility

(d) None of these

190, Under Intensive checking –

(a) All books of accounts are examined

(b) Specific books of accounts are examined (✓)

(d) Both (a) and (b)

191, Under over all checking –

(a) All books of accounts are examined

(b) All methods of checking are used (✓)

(d) Both (a) and (b)

192, Permanent file contains the abstract of –

(a) Regulations related to the organisation of institution

(b) Agreements related to long-term liabilities

(d) Both above (a) and (c) (✓)

193, Materiality is a –

(a) Relative term (✓)

(b) Absolute term

(d) None of these

194, Which of the following Auditing Standard is related with Audit Materiality –

(a) AAS-12

(b) AAS-4

(d) AAS-15

195, Which of the following is not a part of the process of auditing –

(a) Preparation of Balance Sheet and profit and loss account (✓)

(b) Examination of vouchers supporting various entries in the books of account

(d) Preparation of Audit Report

196, Test checking should not be applied to –

(a) Purchase book

(b) Sales book

(d) Cash book (✓)

4. Internal Check

197, Under the Internal Check System –

(a) Responsibilities of employees are determined

(b) Work of an employees is checked automatically by other employee

(d) All above (✓)

198, Internal check is important for –

(a) Smali organisation

(b) Big organisation (✓)

(d) None of these

199, Object of internal check is –

(a) Early detection of frauds

(b) To enchance efficiency of employees

(d) All the above (✓)

200, Which of the following is based on the principle of division of work?

(a) Internal control

(b) Internal checking (✓)

(d) None of these

201, The process of distribution of work among employees according to their ability is known as –

(a) Internal audit

(b) Internal control

(d) None of these

202, An internal auditor is –

(a) Outsider person

(b) Insider person (✓)

(d) None of these

203, The scope of work of Internal Audit is decided by the –

(a) Shareholders

(b) Management (✓)

(d) Law

204, Internal checking is –

(a) Synonymous of Internal Audit

(b)Work of one auditor is checked by other senior auditor

(d) None of these done by

205, Internal audit of a business concern is –

(a) Employees of the organisation (✓)

(b) Registered auditors

(d) Representative of directors

206, Who appoint Internal Auditor?

(a) Management (✓)

(b) Shareholders

(d) Stock Exchange.

207, Who will be responsible for errors in report if external auditor relies on the work of internal auditor –

(a) External Auditor (✓)

(b) Internal auditor

(d) Shareholders

208, Internal check refers to –

(a) Checking of records by the cashier

(b) Checking of accounts by the internal auditor

(d) Managerial control internally over the subordinates

209, The object of internal audit is –

(a) To prevent errors and frauds

(b) To detect errors and frauds

(d) All of the above (✓)

210, In comparison to the independent auditor, an internal auditor is more likely to be concerned with –

(a) Cost accounting system

(b) Internal control system (✓)

(d) Accounting system

211, Internal auditing can best be described as –

(a) An accounting function

(b) A line management function

(d) An internal control function

212, Internal audit proves helpful in –

(a) Preventing errors and frauds (✓)

(b) Statutory audit

(d) Internal check

213, Internal audit is a –

(a) Part of internal control (✓)

(b) Broader than internal check

(d) Does not related with internal control

214, Meaning of Internal Audit is –

(a) A system of internal check

(b) Routine checking by Auditor

(d) Initial audit by Auditor

215, Main object of Internal check is –

(a) Detecting errors and frauds (✓)

(b) Checking

(d) Division of work among employees

216, Which of the following is a feature of an efficient Internal Check System?

(a) Clear-cut demarcation of authorities and

(b) Changes in the work of employees

(c) An arrangement of staff duties whereby no one person is allowed to carry thorough and to record every aspect of the transaction

(d) All above (✓)

217, “Internal check may be defined as such arrangement of Book-keeping routine that errors and frauds are likely to be prevented or discovered by the very operation the Book-keeping itself. This is defined by –

(a) Spicer and Pegler

(b) De Paula

(d) None of these

218, Internal check system makes the auditor’s work –

(a) Easy

(b) Complicated

(d) Both (a) and (c) (✓)

219, Internal check includes –

(a) Make entries

(b) Verification

(d) None of above

220, Internal check starts –

(a) Simultaneously transactions (✓)

(b) After preparing accounts

(d) None of these

221, For big concerns internal check system is –

(a) Expensive

(b) Economie (✓)

(d) None of these

222, Internal audit is done by –

(a) Salaried employees of business concern (✓)

(b) Outsider person

(d) None of these

223, “Internal check is a method of organising the entire operation of office, factory, warehouse and the duties of the respective staff so that fraud and irregularities are impossible without collusion.” This is defined by –

(a) De Paula

(b) Joseph Lancaster (✓)

(d) None of these

124, Internal control is a broader term, generally used to encompass both internal check and internal audit”. This is defined by –

(a) H. Stateler (✓)

(b) Spicer and Pegler

(d) D. Paula

125, Which of the following is a broader term?

(a) Internal control (✓)

(b) Internal check

(d) None of these

126, In which of the following detailed checking is done –

(a) Internal audit (✓)

(b) Interim audit

(d) All of these

MCQs With Answers

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Classification of Audit MCQS With Answers

2. Classification of Audit

3. Audit Process

4. Internal Check

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