MCQs on Audit & Assurance (Part-11) (326 to 350)

 

326.Which of the following section of Companies Act, 2013 deals with requirement of internal audit in companies 

a) Section 139 

b) Section 138 

c) Section 143 

d) Section 148 

327.Which of the following person can be appointed as internal auditor of Co 

a) Chartered Accountant 

b) Cost Accountant 

c) Any Employee of Co 

d) Any of above (a) (b) (c) 

328.Section 138 of the Companies Act, 2013 shall apply to 

a) Listed Company 

b) Prescribed class of companies 

c) Both (a) and (b) 

d) All the companies 

329.Company shall comply with requirement of section 

138 of the Companies Act, 2013 w.r.t. internal audit within ___________months from applicability of the section. 

a) 6 

b) 8 

c) 3 

d) 2 

330.Which of the following is a routine audit procedure 

a) Vouching of transactions 

b) Analytical procedures 

c) Risk assessment procedures 

d) Verification of assets and liabilities 

331.Which of the following statement is correct 

a) Surprise check is a part of routine checking

b) Surprise check preferably done at least once during the audit 

c) Surprise check cannot exercise good moral check on client’s staff 

d) It is necessary in all cases for the result of surprise check to be included in the audit report.

 332.Surprise check may be with respect to

a) Verification of cash

b) Verification of investment 

c) Verification of inventory

d) All of above 

333.The frequency of surprise check is 

a) As prescribed under law 

b) As mentioned under SA 

c) To be determined by auditor 

d) At least 5% of total time devoted to audit 

334.The results of surprise checks 

a) Are always to be included in audit report as these are always important 

b) May or may not be included in audit report depending upon the quantitative nature of findings 

c) Should be included in audit report if they are material and affecting the financial statements

d) All of these 

335.Examination in depth refers to 

a) Examining 100% items of a population 

b) Examining all the assets and liabilities 

 c) Examination of a few selected transactions from the beginning to the end through the entire flow of transaction 

d) None of these 

336.In continuous audit, audit work is commenced by auditor: 

a) Immediately after acceptance of audit engagement 

b) After closing of FY 

c) At any point of time as per auditor’s judgement 

d) None of these. 

337.Which of following is advantage of continuous audit: 

a) Earlier discovery of misstatements 

b) Client’s accounts are always kept up to date 

c) Routine checking is completed in advance 

d) All of above 

338.Which of following is disadvantage of continuous audit 

a) The attendance of the audit staff acts a moral check on the client’s staff.

b) Less pressure at year end 

c) The client’s staff may alter entries in the books after checking thereof. 

d) All of above.

339.The first standard of field work recognizes that early appointment of the independent auditor has many advantages to the auditor and the client. Which of the following advantages is least likely to occur as a result of early appointment of the auditor? 

a) The auditor will be able to complete the audit work in less time 

b) The auditor will be able to perform the examination more efficiently 

c) The auditor will be able to better plan for the observation of the physical inventories 

d) The auditor will be able to plan the audit work so that it may be done expeditiously 

340.In final audit, audit work is commenced by auditor: 

a) Immediately after acceptance of audit engagement 

b) After closing of FY 

c) At any point of time as per auditor’s judgement 

d) None of these. 

341.The advantages of final audit are: 

a) The possibility of figures being altered after work has been done is avoided 

b) Allocation of work to staff become easier 

c) There is no loss of link in the work as the entire audit work is completed in a single continuous basis. 

d) All of above 

342.Instructions to client before start of actual audit are: 

a) Vouchers should be serially numbered. 

b) The accounts should be total up and the trial balance and final accounts to be kept ready. 

c) Schedule of deferred expenditures to be prepared. 

d) All of these 

343.Some of the important content recorded in the audit notebook are: 

a) Name of business and its structure 

b) Errors and fraud discovered 

c) Date of commencement and completion of audit 

d) All of above 

344.An audit programme is: 

a) List of examination and verification steps to be applied 

b) Examination in depth 

c) List of audit queries 

d) All of these 

345.Responsibility fixing is a feature of 

a) Audit plan 

b) Audit 

c) Audit programme 

d) All of the above 

346.Pick the odd one 

a) Audit programme helps in distribution of work amongst the people doing audit 

b) Audit programme is mechanical 

c) Audit program acts as a evidence against change of negligence 

d) Audit programme helps in covering all the areas where audit is required 

347.Audit programme is a failure if 

a) Instructions are not followed property

b) Audit plan is not made correctly 

c) The instructions are ambiguous

d) All of the above 

348.Pick the odd one 

a) A hard and fast audit programme may kill the initiative of efficient and enterprising assistants 

b) An audit programme can make the audit exercise rigid and mechanical. 

c) The principal can control the progress of the various audits in hand by examination of audit programme. 

d) There is a risk that if any matter escaped attention of auditor at the time of audit programming may remain unaudited during the entire audit. 

349. _____________ refers to the record of audit procedures performed, relevant audit evidence obtained, and conclusions the auditor reached. 

a) Audit Techniques 

b) Audit Evidence 

c) Audit Documentation 

d) None of the above 

350. ______________ may be defined as one or more folders or other storage media, in physical or electronic form, containing the records that comprise the audit documentation for a specific engagement. 

a) Audit File 

b) Audit Evidence 

c) Completion Memorandum 

d) Both (a) and (b) above.