1. Civil liability of an auditor implies liability for
Correct : D. misfeasance
2. An auditor is held criminally liable for
Correct : C. Offence against statutory provisions
3. An auditor is held liable under C.A Act 1949 for
Correct : C. Professional misconduct
4. __________ is a systematic examination of the books and records or a business.
Correct : A. Auditing
5. An audit which is compulsory by the law is __________.
Correct : D. Statutory Audit
6. .Instruction of audit issued by controller and auditor general of India ________.
Correct : D. Government audit
7. Audit done by the employees of the business undertaking is called _______.
Correct : D. Internal Audit
8. This kind of audit is conducted generally between two annual audit ______.
Correct : B. Interim audit
9. Management audit otherwise called as _______.
Correct : B. Efficiency Audit
10. Before the work of audit is commenced, the auditor plans out the whole of audit work is
called _________.
Correct : C. Audit Programme
11. A number of checks and controls exercised in a business to ensure its efficient working
are known as ________.
Correct : B. Internal Control
12. A Voucher is a _______.
Correct : A. Document is support of an entry made in books of accounts
13. Voucher relates to _________.
Correct : A. Cash receipt & payments, credit transactions
14. Internal check is meant for ___________.
Correct : A. Prevention of frauds
15. Purchase of machinery is a ____________.
Correct : C. capital expenditure
16. Sale of land is a __________.
Correct : B. capital receipt
17. When a transaction has not been recorded in the books of account either wholly or
partially such errors are called as _________.
Correct : B. errors of omission
18. Verification of the value of assets, liabilities, the balance of reserves, provision and the
amount of profit earned or loss suffered a firm is called _________.
Correct : B. balance sheet audit.
19. A sale of Rs. 50000 to Mr. A was entered as a sale to Mr. B. This is an example of what?
Correct : B. Error of commission
20. Recording a transaction twice in the books of original entry is an error of __________.
Correct : C. duplication
21. Errors and frauds already committed can be discovered under the system of ________.
Correct : A. internal audit, internal check, internal control
22. Treating revenue expenditure as capital expenditure is a case of _________.
Correct : D. manipulation of accounts
23. /. Special audit is necessary for _________.
Correct : A. inefficient concern
24. The first auditors appointed by head office ____________.
Correct : D. till the conclusion of the first annual general meeting
25. Audit Note Book contains: ---------------------------------------------------------
Correct : D. All of the above.
26. Which of the following has a broader scope?
Correct : D. None of the above.
27. An internal auditor is :
Correct : B. Permanent Employee.
28. The main object of vouching is :
Correct : D. Checking of vouchers
29. Valuation is the base of:
Correct : A. Verification.
30. The first auditor or auditors are appointed by :
Correct : C. Board of Directors.
31. A number of checks & controls exercised in a business to ensure its efficient working is known as :
Correct : A. Internal check.
32. Voucher relates to :
Correct : D. All the above.
33. Internal check is meant for :
Correct : C. Helping audit in depth.
34. Internal auditor is appointed by :
Correct : A. The management.
35. Auditing begins where -------- ends.
Correct : C. Accounting.
36. A good audit report must at least meet one of the following qualifications:
Correct : A. It should offer constructive and timely suggestions to the management.
37. The work of one clerk is automatically check by another clerk is called :
Correct : B. Internal check.
38. The owners of the company are called:
Correct : C. Shareholders.
39. Verification is :
Correct : C. The act of establishing the accuracy of entries in the books of accounts.
40. The main object of investigation is :
Correct : D. All the above.
41. Internal controls and internal check are :
Correct : C. Internal control includes internal check.
42. An auditor is like a :
Correct : D. Watch dog.
43. Special audit is necessary for:
Correct : A. Inefficient concern.
44. The company’s auditor is expected to give:
Correct : B. A factual position about the accounts.
45. Auditors of a joint stock company are appointed by :
Correct : C. Election at the annual general meeting.
46. A company auditor can be removed by :
Correct : D. General Meeting.
47. A vacancy caused by resignation of an auditor is filled by :
Correct : C. General meeting.
48. Audit in depth means :
Correct : B. Intensive audit of each and every item.
49. Concurrent audit is a part of :
Correct : C. Internal audit system.
50. Audit in depth is synonymous for:
Correct : D. Detailed audit.
51. Balance sheet audit included verification of :
Correct : D. All of the above.
52. Which of the following statements is not true about continuous audit?
Correct : C. It is needed when the organization has a good internal control system.
53. Which of the following is not a fact of EPA ?
Correct : C. Expenditure audit.
54. Balance sheet does not include :
Correct : D. Routine checks.
55. When issuing unqualified opinion the auditor who evaluates the audit findings
should be satisfied that the :
Correct : B. Estimates of the total likely misstatement are less than materiality level.
56. Under check system principle of_________ is followed.
Correct : A. Division of labour
57. This kind of audit is generally conducted between two annual audits.
Correct : B. Interim audit
58. Before the work of audit is commenced, the auditor plans out the whole of
audit work is known as –
Correct : D. Audit program
59. Internal auditor is appointed by –
Correct : A. The management
60. The audit that is made compulsory under the statute is called –
Correct : A. Statuary audit
61. Who among the following can be appointed as the auditor of company?
Correct : D. Mr. ‘Z’ who holds the ‘CA’ Certificate
62. ___ is documentary evidence by which the accuracy in the books of accounts
may be proved.
Correct : C. Voucher
63. Sale of Rs.50,000 to ‘A’ was entered as a sale to ‘B’. This is an example of –
Correct : B. Error of commission
64. In comparison to the independent auditor an internal auditor is more likely to
be concerned with –
Correct : B. Internal control system
65. The audit program is prepared by –
Correct : D. Auditor & his assistants
66. Interim audit refers to –
Correct : C. Audit work to find out & check interim profits of a company
67. A company auditor should see that the dividend is paid –
Correct : A. After charging depreciation
68. Errors of omission are –
Correct : A. Technical errors
69. Vouching implies –
Correct : B. Examination of vouchers to check authenticity of records
70. Undervaluation of stock is –
Correct : C. Error of principle
71. Verification refers to –
Correct : C. Examining the physical existence & valuation of assets
72. Valuation of fixed assets is based on the concept –
Correct : A. Going concern
73. “Auditor is not valuer.” This statement was stated in –
Correct : A. Kingston Cotton Mill Case
74. Floating assets are valued at –
Correct : C. Cost price or market price whichever is less
75. Outstanding expenses should be verified with the help of –
Correct : C. Journal proper
76. First auditor of the company is appointed by the –
Correct : D. Board of directors
77. The vacancy caused by resignation at a auditor is filled by –
Correct : B. At the general meeting of shareholders
78. A special auditor is appointed by the –
Correct : C. Central government
79. A remuneration of a company auditor is fixed by the –
Correct : D. Appointing authority
80. Internal auditor has to submit report to –
Correct : D. none of above
81. Auditor in general is –
Correct : C. Agent of the shareholders
82. Shares issued for consideration other than cash should be vouched with help of –
Correct : C. Contract with the party concerned
83. The term Standard Auditing Practices refers –
Correct : A. Auditing techniques adopted by auditor for collecting & vouching evidences
84. AAS refers to –
Correct : D. Knowledge of business
85. The panel of Auditors of cooperative society is maintained by –
Correct : C. Registrar
86. Banking Regulation Act was passed in the year–
Correct : B. 1949
87. Which of the following statements is not correct regarding removal of first
auditor before expiry of the term?
Correct : C. The approval of central government is required for such removal
88. Retiring auditor does not have right to –
Correct : A. Make written representations
89. According to Section ___ Special Audit is conducted at the central government
Correct : C. Section 242(A)
90. Audit of Banks is an example of –
Correct : D. All of above
91. Auditor of a _____ company does not have right to visit foreign branches of
company.
Correct : B. Manufacturing Company
92. Cost Audit under Section 233(B) of The Company Act is _____
Correct : C. Advisable.
93. Internal Auditing Standards are issued by the –
Correct : C. International Audit & Assurance Standard Board
94. Which of the following is not a duty of an auditor?
Correct : A. Duty to report company’s banker
95. The main object of vouching is :
Correct : C. Verify authenticity & authority of transactions.
96. Valuation is the basis of :
Correct : A. Verification.
97. Voucher relates to:
Correct : A. Cash receipt.
98. Sale of Rs.50,000 to ‘A’ was entered as a sale to ‘B’. This is an example of –
Correct : B. Error of commission (
99. “Auditor is not valuer.” This statement was stated in –
Correct : A. Kingston Cotton Mill Case
100. Thevacancy caused by resignation of an auditor is filled by –
Correct : B. At the general meeting of shareholders