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Free download in PDF Auditing General Knowledge Objective Type Questions & Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams. These short solved questions or quizzes are provided by Gkseries.
(21)
Audit in depth is synonymous for____________?
[A]
Complete audit
[B]
Completed audit
[C]
Final audit
[D]
Detailed audit
(22)
Concurrent audit is a part of____________?
[A]
Internal check system
[B]
Continuous audit
[C]
Internal audit system
[D]
None of these
Answer: Internal audit system
(23)
Audit of banks is an example of_____________?
[A]
Concurrent audit
[B]
Balance sheet audit
[C]
Statutory audit
[D]
All of the above
(24)
The scope of internal audit is decided by the___________?
[A]
Shareholders
[B]
Management
[C]
Government
[D]
Law
(25)
Internal audit is undertaken:
[A]
By independent auditor
[B]
Statutorily appointed auditor
[C]
By a person appointed by the management
[D]
By a government auditor
Answer: By a person appointed by the management
(26)
Which of the following statements is not true?
[A]
Management fraud is more difficult to detect than employee fraud
[B]
Internal control system reduces the possibility of occurrence of employee fraud and management fraud
[C]
The auditor’s responsibility for detection and prevention of errors and frauds is similar.
[D]
All statements are correct.
Answer: Internal control system reduces the possibility of occurrence of employee fraud and management fraud
(27)
Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of____________?
[A]
Error of principle
[B]
Error of commission
[C]
Error of omission
[D]
Error of duplication
Answer: Error of principle
(28)
Lapping is also known as___________?
[A]
Teeming and lading
[B]
Looping
[C]
Embezzlement
[D]
Hacking
Answer: Teeming and lading
(29)
According to ISA 315, which of the following is NOT a control activity?
[A]
Performance reviews
[B]
Physical controls
[C]
Organizational structure
[D]
Segregation of duties
Answer: Organizational structure
(30)
According to ISA 315, which of the following is NOT an element of the control environment?
[A]
Participation of management
[B]
Information processing
[C]
Commitment to competence
[D]
Human resource policies and practices
Answer: Information processing
31
The degree of effectiveness of an internal control system depends on:
[A]
The design of the internal control system and the implementation of the controls
[B]
The design of the internal controls and the implementation of the control system
[C]
The implementation of the controls and the correctness of the accounting records
[D]
The design of the internal control system and the correctness of the accounting records
Answer: The design of the internal control system and the implementation of the controls
32
Which of the following is normally the most reliable source of audit evidence?
[A]
Internal audit
[B]
Suppliers’ statements
[C]
Board minutes
[D]
Analytical review
Answer: Suppliers’ statements
33
According to ISA 500, the strength of audit evidence is determined by which two qualities?
[A]
Appropriateness & competence
[B]
Sufficiency & appropriateness
[C]
Reliability & extensiveness
[D]
Objectivity & independence
Answer: Sufficiency & appropriateness
34
Which of the following are you unlikely to see in the current file of auditors’ working papers?
[A]
Memorandum & articles of association
[B]
Audit planning memorandum
[C]
Summary of unadjusted errors
[D]
Details of the work done on the inventory count
Answer: Memorandum & articles of association
35
Which of the following is NOT an accepted method of selection in sampling?
[A]
Systematic selection
[B]
Pervasive selection
[C]
Random selection
[D]
Haphazard selection
Answer: Pervasive selection
36
Which of the following describes sampling risk?
[A]
The risk of the auditor carrying out a test the wrong way round
[B]
The risk of reliance on unsuitable audit evidence
[C]
The risk that the sample does not reflect the population
[D]
The risk of the auditor reaching the wrong conclusions from testing
Answer: The risk that the sample does not reflect the population
37
At the planning stage you would NOT consider____________?
[A]
the timing of the audit
[B]
whether corrections from the inventory count have been implemented
[C]
last year’s audit
[D]
the potential use of internal audit
Answer: whether corrections from the inventory count have been implemented
38
Which of the following should NOT be considered at the planning stage?
[A]
The timing of the audit
[B]
Analytical review
[C]
Last year’s written representation letter
[D]
Obtaining written representations
Answer: Obtaining written representations
39
Audit risk is composed of 3 factors. Which of the following is NOT one of those factors?
[A]
Compliance risk
[B]
Detection risk
[C]
Control risk
[D]
Inherent risk
40
Which one of the following is NOT considered to be part of planning?
[A]
Background i.e. industry
[B]
Previous year’s audit i.e. any qualifications in the report
[C]
Considering the work to be done by the client staff e.g. internal audit
[D]
Considering whether the financial statements show a true and fair view
Answer: Considering whether the financial statements show a true and fair view
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