Auditing MCQs

Page No. 7

_______the audit risk,_______the materiality and _______the audit effort?


aLower, Higher, Lower

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bLower, Lower, Higher

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cHigher, Lower, Lower

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dLower, Higher, Higher

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View Answer Lower, Higher, Lower

Which of the following statements is not correct about materiality?


aMateriality is a relative concept

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b Materiality judgments involve both quantitative and qualitative judgments

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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

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

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Balance sheet does not include­:_____________?


aVerification of assets and liabilities

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bVouching of income and expense accounts related to assets and liabilities

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c Examination of adjusting and closing entries

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dRoutine checks

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View Answer Routine checks

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


aIt is conducted at regular interval

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bIt may be carried out on daily basis

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

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dIt is expensive

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Balance sheet audit includes verification of____________?


aAssets

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bIncome and expense accounts where appropriate

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cLiabilities

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dAll of the above

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View Answer All of the above

Audit in depth is synonymous for­_____________?


aComplete audit

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bCompleted audit

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cFinal audit

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dDetailed audit

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View Answer Detailed audit

In Pakistan, balance sheet audit is synonymous to___________?


aAnnual audit

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bContinuous audit

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cDetailed audit

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dStatutory audit

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View Answer Annual audit

Audit of banks is an example of__________?


aStatutory audit

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b Balance sheet audit

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cConcurrent audit

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dAll of the above

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View Answer All of the above

Auditing is what?


aReporting the financial information

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bExamination of financial statements

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cPreparation financial statements

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dmaintaining the ledger records

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


aA flowchart of the internal controls

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bOrganisation charts

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cA copy of financial statements

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dCopies of bond and debentures

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