Q.1
Auditing is compulsory for
  • Small scale business
  • Partnership firms
  • Joint stock Companies
  • Proprietary Concerns
Q.2
Errors of Omission are
  • Technical errors
  • Errors of principle
  • Compensating errors
  • None of the above
Q.3
Civil liability of an auditor implies liability for
  • misappropriation of cash
  • misappropriation of goods
  • fraud
  • misfeasance
Q.4
Audit of banks is an example of –
  • Statutory audit
  • Balance sheet audit
  • Concurrent audit
  • All of the above
Q.5
An auditor is like a
  • Blood haunt
  • Watch dog
  • May both according to situation
  • None of these
Q.6
Audit in depth is synonymous for
  • Complete audit
  • Completed audit
  • Final audit
  • Detailed audit
Q.7
Purchase returns should be vouched with the help of
  • Bought notes
  • Credit notes
  • Goods inward book
  • Cash book
Q.8
Internal audit is undertaken
  • By independent auditor
  • Statutorily appointed auditor
  • By a person appointed by the management
  • By a government auditor
Q.9
10.Vouching of the balances of all incomes and expenses account is known as vouching of _____
  • Personal ledger
  • Impersonal ledger
  • Cash
Q.10
Which of the following affects audit effectiveness?
  • Risk of over reliance
  • Risk of incorrect rejection
  • Risk of incorrect acceptance
  • Both (a) and (c)
Q.11
Which of the following statements is not true about continuous audit?
  • It is conducted at regular interval
  • It may be carried out on daily basis
  • It is needed when the organization has a good internal control system
  • It is expensive
Q.12
An auditor assesses control risk because it
  • Affects the audit risk
  • Affects the level of detection risk that auditor may accept
  • Helps him to fix materiality level for each financial assertion
  • Is directly related to inherent risk
Q.13
Errors and frauds already committed can be discovered under the system of ________.
  • internal audit, internal check, internal control
  • external check
  • statutory audit
  • interim audit
Q.14
An auditor should study and evaluate internal controls to
  • Determine whether assets are safeguarded
  • Suggest improvements in internal control
  • Plan audit procedures
  • Express and opinion
Q.15
The title of AAS2 issued by Council of ICAI is ___
  • Objective and Scope of the Financial Statements
  • Objective and Scope of the Audit of Financial Statements
  • Objective and Scope of Business of an Entity
  • Objective and Scope of Financial Statements Audit
Q.16
The performance of tests of control is documented in
  • Audit programme
  • Flow charts
  • Working papers
  • Any of the above
Q.17
Control risk is assessed at
  • Overall financial statements level
  • Fraud risk factor level
  • Financial statement assertion level
  • Control environment level
Q.18
Which of the following is not an inherent limitation of internal control system?
  • Management override
  • Collusion among employees
  • Inefficiency of internal auditor
  • Abuse of authority
Q.19
Which of the following are included in test of control?
  • Reperformance and observation
  • Inquiry and analytical procedures
  • Comparison and conformation
  • Inspection and verification
Q.20
Which of the following statements is most closely associated with analytical procedureapplied at substantive stage?
  • It helps to study relationship among balance sheet accounts
  • It helps to discover material misstatements in the financial statements
  • It helps to identify possible oversights
  • It helps to accumulate evidence supporting the validity of a specific account balance
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