Auditing MCQs

Page No. 13

Which of the following is NOT the responsibility of a company’s directors?


aReporting to the shareholders on the accuracy of the accounts


bEstablishment of internal controls


cKeeping proper accounting records


dSupplying information and explanations to the auditor



Why do auditors concentrate their efforts on material items in accounts?


aBecause they are easier to audit


bBecause it reduces the audit time


cBecause the risk to the accounts of their being incorrectly stated is greater


dBecause the directors have asked for it



The concept of stewardship means that a company’s directors________________?


a Are responsible for ensuring that the company complies with the law


b Are responsible for ensuring that the company pays its tax by the due date


c Safeguard the company’s assets and manage them on behalf of the shareholders


dReport suspected fraud and money laundering to the authorities



The fundamental objective of the audit of a company is to_____________?


aProtect the interests of the minority shareholders


bDetect and prevent errors and fraud


cAssess the effectiveness of the company’s performance


dAttest to the credibility of the company’s accounts



Concealment of shortage by delaying the recording of cash receipts is known as_____________?


aEmbezzlement


bMisappropriation


cLapping


dNone of these


View Answer Lapping

Auditing is compulsory for____________?


aSmall scale business


bPartnership firms


cJoint stock Companies


dProprietary Concerns


View Answer Joint stock Companies

Process of verifying the documentary evidences of transactions are known as___________?


aAuditing


b Testing


cVouching


dVerification


View Answer Vouching

An auditor is like a_______________?


aBlood haunt


bWatch dog


cMay both according to situation


dNone of these


View Answer Watch dog

The main object of an audit is _____________?


aExpression of opinion


b Detection and Prevention of fraud and error


cBoth (A) and (B)


dDepends on the type of audit.



The term ‘Audit’ is derived from a Latin word “audire” which means___________?


aTo inspect


b To examine


cTo hear


dTo investigate


View Answer To hear

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