auditing mcqs

Verification

Auditing

Vouching

Testing

whether corrections from the inventory count have been implemented

the timing of the audit

last year’s audit

the potential use of internal audit

Duty to report to the members

Duty to report to the company’s bankers

Duty to sign the audit report

Duty to report on any violation of law

Previous year’s audit i.e. any qualifications in the report

Considering whether the financial statements show a true and fair view

Background i.e. industry

Considering the work to be done by the client staff e.g. internal audit

Disproportionately

Randomly

Directly

Inversely

For a period auditor opines them to be useful in servicing the client

For a period of ten years

For the time period the entity remains a client of the audit firm.

For the period the audit firm is in existence.

Both (A) and (B)

Depends on the type of audit.

Expression of opinion

Detection and Prevention of fraud and error

Until the financial statements are complete

Until the directors remove them

Until the audit is complete

Until the next AGM (Annual General Meeting)

Teeming and lading

Hacking

Embezzlement

Looping

Estimate of the total likely misstatement is more than materially level

Estimates of the total likely misstatement cannot be made

Amount of known misstatement is documented in working papers

Estimates of the total likely misstatement is less than materiality level

International Accounting Standards Board

Auditing Practices Board

International Standards Board

International Federation of Accountants

Members of the staff

Internal auditor

Supervisor of the staff

Staff specially appointed for the purpose

By independent auditor

Statutorily appointed auditor

By a person appointed by the management

By a government auditor

1961

1972

1956

1949

the company’s bank

the directors

the company’s creditors (payables)

the shareholders

Detailed audit

Statutory audit

Annual audit

Continuous audit

annual general meeting

Board meeting

extraordinary general meeting

General meeting

38

36

32

34

Not be checked by auditor

None of the above

Be included in the stock

Not be included in the stock

Error of omission

Error of commission

Error of principle

Error of duplication

Attest to the credibility of the company’s accounts

Assess the effectiveness of the company’s performance

Protect the interests of the minority shareholders

Detect and prevent errors and fraud

one audit firm should audit the IFI and a different firm should audit the financial statements for the year as a whole.

one accountancy firm should review the IFI and a different firm should audit the financial statements for the year as a whole.

the same firm should review the IFI and the financial statements for the year as a whole.

the same firm should audit the IFI and the financial statements for the year as a whole.

Audit planning memorandum

Memorandum & articles of association

Details of the work done on the inventory count

Summary of unadjusted errors

Effective internal control system provides reliable audit evidence

Evidence obtained from outside sources routed through the client

To be reliable, evidence should conclusive rather than persuasive

All are correct.

They document the level of independence maintained by the auditor

They help the auditor to monitor the effectiveness of the audit firm’s quality control

They should be considered as the principle support for the auditor’s report

They should not contain details regarding weaknesses in the internal control system