Auditing MCQs

Page No. 7

_______the audit risk,_______the materiality and _______the audit effort?


aLower, Higher, Lower


bLower, Lower, Higher


cHigher, Lower, Lower


dLower, Higher, Higher


View Answer Lower, Higher, Lower

Which of the following statements is not correct about materiality?


aMateriality is a relative concept


b Materiality judgments involve both quantitative and qualitative judgments


cAuditor’s consideration of materiality is influenced by the auditor’s perception of the needs of an informed decision maker who will rely on the financial statements


dAt the planning state, the auditor considers materiality at the financial statement level only



Balance sheet does not include­:_____________?


aVerification of assets and liabilities


bVouching of income and expense accounts related to assets and liabilities


c Examination of adjusting and closing entries


dRoutine checks


View Answer Routine checks

Which of the following statements is not true about continuous audit?


aIt is conducted at regular interval


bIt may be carried out on daily basis


cIt is needed when the organization has a good internal control system


dIt is expensive



Balance sheet audit includes verification of____________?


aAssets


bIncome and expense accounts where appropriate


cLiabilities


dAll of the above


View Answer All of the above

Audit in depth is synonymous for­_____________?


aComplete audit


bCompleted audit


cFinal audit


dDetailed audit


View Answer Detailed audit

In Pakistan, balance sheet audit is synonymous to___________?


aAnnual audit


bContinuous audit


cDetailed audit


dStatutory audit


View Answer Annual audit

Audit of banks is an example of__________?


aStatutory audit


b Balance sheet audit


cConcurrent audit


dAll of the above


View Answer All of the above

Auditing is what?


aReporting the financial information


bExamination of financial statements


cPreparation financial statements


dmaintaining the ledger records



The current file of the auditor’s working papers, generally, should include____________?


aA flowchart of the internal controls


bOrganisation charts


cA copy of financial statements


dCopies of bond and debentures



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