MCQs on Audit & Assurance (Part-19) (701 to 750)

MCQS ON AUDIT & ASSURANCE 

701. Bonus shares_____- fully paid up----

a) Must be

b) May be

c) May or may not be

d) Should generally be

702. ________ shall carry voting right----

a) Debentures

b) No debenture

c) Convertible debenture

d) Redeemable debentures

703. __________ issuing the debentures shall create______________

a) Every company, debentures redemption reserve

b) Listed company, debenture redemption reserve

c) Public company, debentures redemption reserve

d) Private company, debentures redemption reserve

704. The company shall create debentures redemption reserve equivalent to ______ of the value of debentures.

a) 25%

b) 40%

c) 50%

d) 60%

705. The duties and functions of debenture trustee-----

a) To protect the interest of debenture holders

b) To redress the grievances of debenture holders

c) Both option (a) and option (b)

d) None of these

706. Before allotment of debentures prospectus should have been duly filed with------

a) Central government

b) SEBI

c) Registrar

d) All of these

707. If debentures are issued at premium, the amount of premium should be credited to premium on debentures account and the balance to the credit of this account should be subsequently transferred to_______

a) Capital Reserve Account

b) General Reserve Account

c) P & L Appropriation Account

d) Any of these

708. The interest paid on debentures_____ disclosed as a separate item in_________.

a) Must be, balance sheet

b) Should be, notes to accounts

c) Must be, P & L account

d) Need not be in the P & L account

709. Debentures may be issued as a collateral security to-----

a) The creditors

b) Bankers

c) Other parties

d) Any of these

710. In the case of dividend, first of all dividend is ______ by __________ ---

a) Declared, Board

b) Declared, Members

c) Recommended, Board

d) Recommended, Members

711. The members__________ the rate or amounts recommended by the Board----

a) May reduce

b) May reduce but cannot increase

c) May increase

d) May reduce or may increase

712. Statement 1

Dividend can be paid out of moneys provided by Central Government or State Government in pursuance of a guarantee given by it.

Statement 2

Depreciation may or may not be provided so as to compute the profits for the purpose of declaration of dividend----

a) Only Statement 1 is true

b) Only Statement 2 is true

c) Both the statements are true

d) None of the statement is true

713. Dividend shall be declared or paid by the company from---

a) Free Reserves

b) Capital Reserves

c) Revaluation reserves

d) All of these

714. Dividend shall be payable----

a) Only in cash

b) In cash or in kind

c) Either in cash or in electronic mode

d) Option (c) or by issue of cheque

715. The dividend shall be deposited in a separate bank account within______ days of declaration of dividend.

a) 5

b) 7

c) 30

d) 60

716. Any money transfer to unpaid dividend account of accompany which remains unpaid for _______ shall be transferred with a company to a fund called Investor Education and Protection Fund.

a) 30 days

b) 1 year

c) 5 years

d) 7 years

717. The criminal liability for misstatements in prospectus is given u/s_______________ of the Companies Act, 2013

a) 34

b) 35

c) 36

d) 37

718. If a prospectus include any statement which is misleading, every person who authorized the issue of such prospectus shall be liable u/s

a) 147

b) 447

c) 35

d) None of these

719. Under section 35 of the companies Act, the person liable for misstatement means

a) The Company

b) Director of the Company

c) Promoter of the Company

d) All of these

720. Section 447 prescribes punishment for fraud, it is applicable on

a) Directors

b) Auditors

c) Members

d) Any Person

721. Under section 447 if fraud involves public interest, the minimum imprisonment is ___________ years and maximum imprisonment is _________years.

a) 3,14

b) 3,10

c) 5,14

d) 5,10

722. If any person is found guilty of fraud, the maximum finr that can be imposed u/s 447 is ____________ the amount involved in the fraud.

a) Two times

b) Three times

c) Four times

d) Five times

723. The auditor should gather which of the following information about CIS environment of the entity before developing audit plan

a) How CIS function is organized

b) The computer hardware and software used by the entity

c) Nature of processing

d) All of these

724. Which of the following is not specific risk relating to internal control in CIS environment

a) Unauthorized changes to system or program

b) Unauthorized changes to data in master file

c) Risk of non -recording of any transaction

d) Potential loss of data

725. The use of computer may result in the design of system that provides_____________evidence than those using manual procedures.

a) Less visible

b) More visible

c) More persuasive

d) Conclusive

726. System characteristics that may result from nature of CIS processing include

a) Absence of input documents

b) Lack of visible transaction trail

c) Lack of visible output

d) All of these

727. Different design and procedural aspects of CIS are

a) Consistency of performance

b) Programmed control procedures

c) Both (a) and (b)

d) None of these

728. Which of the following is not general CIS control

a) Control over inputs

b) Organization and Management Controls

c) Computer Operation Control

d) System Software Control

729. Application System Development and Maintenance Controls are designed to control over

a) Inputs

b) Testing, implementation and documentation of new or revised system

c) Outputs

d) Processing

730. Computer Operation Controls are designed to control the operation of the system and to provide reasonable assurance that

a) Only authorized programs are used

b) Processing errors are detected and corrected

c) System are used for authorized purpose by authorized personnel

d) All of these

731. _______________________are designed to establish an organizational framework over CIS activities.

a) Computer operation control

b) Data entry and program control

c) Organization and Management Controls

d) System software control.

732. Which of following is CIS application control

a) System Software Control

b) Control Over Processing

c) Data Entry and Program Control

d) None of these.

733. Control Over Output provide assurance that

a) Results of processing are accurate

b) Access to output is restricted to authorized personnel

c) Output is provided to appropriate authorized personnel on a timely basis

d) All of these

734. _______________ refers to a situation where it is possible to relate, the original input with the final output on one to one basis.

a) Audit Trail

b) Input Output Ratio

c) Programmed control procedure

d) None of these

735. In CIS environment these is absence of audit trail due to factors such as

a) Direct data entry into the system

b) Direct posting of transactions to master file

c) Elimination of reports as information is supplied on-line

d) All of these

736. In the ________________ ,the auditor concentrate on input and ignores the procedures of how computer process the data or transaction.

a) White box approach

b) Computer Assisted Audit Techniques

c) Black box approach

d) None of these

737. The auditor can usually audit around the computer when

a) The system id simple

b) The system is complex

c) System uses generalized software that is well tested and widely used by many institution

d) (a) or (c)

738. Situation where auditing through computer must be used

a) The computer processes a large volume of input and produces a large volume of output

b) The logic of system is complex

c) The significant parts of internal control system are embodied in the computer system itself

d) All of these

739. ____________________ are those techniques which undertake assistance of computer for being applied to an audit in a computerized environment.

a) Computer Assisted Audit Techniques

b) Audit Trail

c) Compliance Test

d) None of these

740. The use of CAATs may be useful because of following reason

a) Appearance of audit trail

b) Absence of input documents

c) Visible output

d) None of these

741. Benefits of CAATs

a) Time saving

b) Audit effectiveness

c) Lower sampling risk

d) All of these

742. Following are CAATs

a) Test Data

b) Programmes under the control of auditor

c) Both (a) and (b)

d) None of these

743. In auditing through computer, the computer is used as ___________ of audit

a) Tool

b) Target

c) Help

d) Any of these

744. Computer Assisted Audit Techniques are used by ___________ to check validity of __________used by_________.

a) Client, Programmes, Client

b) Client, Programmes, Auditor

c) Auditor, Programme, Client

d) Auditor, Input, Client

Only For New Syllabus Students

745. Who can be appointed as auditor of Co-Operative Society

a) Chartered Accountant within the meaning of the Chartered Accountants Act, 1949

b) Person holding a government diploma in co-operative accounts and accountancy

c) Person who has served as an auditor in the co-operative department of government to act as an auditor.

d) Any of the above

746. Auditor of Co-Operative Society is appointed by

a) Managing Committee of Co-Operative Society

b) Registrar of Co-Operative Society

c) Members of Co-Operative Society

d) None of these

747. The auditor of Co-Operative Society submits his audit report to

a) The Members of Co-Operative Society

b) The Registrar of Co-Operative Society

c) The Co-Operative Society

d) Both (b) and (c)

748. The audit fees to the auditor of Co-Operative Society are paid by ____________ on the basis of ____________.

a) Society, Statutory scale of fees prescribed by the Registrar

b) Registrar, Statutory scale of fees prescribed by the Registrar

c) Society, Decision of Managing Committee of Society

d) Society, Resolution passed by its Members.

749. In case of a society where the liability of a member of society is limited, no member of a society other than a registered society can hold such portion of the share capital of the society as exceed a maximum of

a) 20% of the total number of shares

b) Value of Shareholding to Rs. 1,000

c) (a) or (b)

d) None of these

750. Which of the following is correct

a) A registered society shall not make a loan to any person other than a member.

b) With the special sanction of the Registrar, a registered society may make a loan to another registered society.

c) The State Government may further put such restrictions as it thinks fit on the loaning powers of the society

d) All of these