Auditing MCQs

Page No. 9

Which of the following is not corroborative evidence?


aMinutes of meetings

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bConfirmations from debtors

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cInformation gathered by auditor through observation

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dWorksheet supporting consolidated financial statements

✓



Which of the following statements is, generally, correct about the reliability of audit evidence?


aTo be reliable, evidence should conclusive rather than persuasive

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bEffective internal control system provides reliable audit evidence

✓


cEvidence obtained from outside sources routed through the client

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dAll are correct.

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Goods sold on the basis of ‘sales or return ‘ should:


aBe included in the stock

✓


bNot be included in the stock

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c Not be checked by auditor

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dNone of the above

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Floating assets are valued at____________?


acost

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bMarket price

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cCost or market price whichever is lower

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dCost less depreciation

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Stock should be valued at_________?


aCost

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bMarket price

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cCost or Market price whichever is lower.

✓


d Cost less depreciation.

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Verification refers to_________?


aExamining the physical existence and valuation of assets.

✓


bExamining the journal and ledger

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cExamination of vouchers related to assets

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dNone of the above.

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______the audit risks_______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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d Lower, Higher, Higher

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View Answer Lower, Higher, Lower

Test Checking refers to___________?


aTesting of accounts and records

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bChecking of selected number of transactions

✓


cExamination of adjusting and closing entries

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dChecking of all transactions recorded

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Window dressing implies_______________?


aCurtailment of expenses

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bChecking of Wastages

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cUnder valuation of assets

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dOver Valuation of assets

✓



Errors of Omission are_____________?


aTechnical errors

✓


bErrors of principle

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cCompensating errors

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dNone of the above

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View Answer Technical errors

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