Auditing - Questions and Answers for Competitive Exams | GkSeries

37. An auditor who accepts an audit but does not posses the industry expertise of the business entity should ______________.

1. [A] engage experts.
2. [B] obtain knowledge of matters that relate to the nature of entity business.
3. [C] inform management about it.
4. [D] take help of other auditors.

Answer: Option [B]

38. Audit of banks is an example of __________.

1. [A] Statutory audit.
2. [B] Balance sheet audit.
3. [C] Concurrent audit.
4. [D] All of the above.

Answer: Option [D]

39. In India balance sheet audit is synonymous to _______________.

1. [A] Annual audit.
2. [B] Continuous audit.
3. [C] Detailed audit.
4. [D] Statutory audit.

Answer: Option [A]

40. Balance sheet audit included verification of ________.

1. [A] assets
2. [B] liabilities
3. [C] income and expenditure accounts where appropriate.
4. [D] all of the above.

Answer: Option [D]

41. Which of the following is not a fact of EPA?

1. [A] Economic audit.
2. [B] Efficiency audit.
3. [C] Expenditure audit.
4. [D] Effectiveness audit.

Answer: Option [C]

42. In determining the level of materiality for an audit what should not be considered?

1. [A] Prior years errors.
2. [B] The auditor remuneration.
3. [C] Adjusted interim financial statement.
4. [D] Prior year financial statements.

Answer: Option [B]

43. Which of the following statement is most closely associated with analytical procedure applied at substantive stage?

1. [A] It helps to study relationship among balance sheet accounts.
2. [B] It helps to discover material misstatements in the financial statements.
3. [C] It helps to identify possible oversights.
4. [D] It helps to accumulate evidence supporting the validity of a specific account balance

Answer: Option [D]

44. Of the following, which is the least persuasive type of audit evidence?

1. [A] Bank statements obtained from the client
2. [B] Documents obtained by auditor from third parties directly.
3. [C] Carbon copies of sales invoices inspected by the auditor
4. [D] Computations made by the auditor.

Answer: Option [C]

45. Which of the following Auditing Assurance Standard deals with Audit planning?

1. [A] AAS-7.
2. [B] AAS-8.
3. [C] AAS-9.
4. [D] AAS-3.

Answer: Option [B]

46. Audit Programme is prepared by ___________.

1. [A] the auditor.
2. [B] the client.
3. [C] the audit assistants.
4. [D] the auditor and his audit assistants.

Answer: Option [D]

47. The quantity of audit working papers complied on engagement would most be affected by _________________.

1. [A] management integrity.
2. [B] auditor experience and professional judgement.
3. [C] Auditor qualification.
4. [D] control risk.

Answer: Option [A]

48. Which of the following is not an advantage of the preparation of working paper?

1. [A] To provide a basis for review of audit work.
2. [B] To provide a basis for subsequent audits
3. [C] To ensure audit work is being carried out as per Programme.
4. [D] To provide a guide for advising another client on similar issues.

Answer: Option [D]