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Free download in PDF Auditing General Knowledge Short Questions & Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams. These short solved questions or quizzes are provided by Gkseries.
41
Floating assets are valued at____________?
[A]
cost
[B]
Market price
[C]
Cost or market price whichever is lower
[D]
Cost less depreciation
Answer: Cost or market price whichever is lower
42
Stock should be valued at_________?
[A]
Cost
[B]
Market price
[C]
Cost or Market price whichever is lower.
[D]
Cost less depreciation.
Answer: Cost or Market price whichever is lower.
43
Verification refers to_________?
[A]
Examining the physical existence and valuation of assets.
[B]
Examining the journal and ledger
[C]
Examination of vouchers related to assets.
[D]
None of the above.
Answer: Examining the physical existence and valuation of assets.
44
Which of the following statements is most closely associated with analytical procedure applied at substantive stage?
[A]
It helps to study relationship among balance sheet accounts
[B]
It helps to discover material misstatements in the financial statements
[C]
It helps to identify possible oversights
[D]
It helps to accumulate evidence supporting the validity of a specific account balance
Answer: It helps to accumulate evidence supporting the validity of a specific account balance
45
Analytical procedures issued in the planning stage of an audit, generally
[A]
Helps to determine the nature, timing and extent of other audit procedures
[B]
Directs attention to potential risk areas
[C]
Indicates important aspects of business
[D]
All of the above
46
In determining the level of materiality for an audit, what should not be considered?
[A]
Prior year’s errors
[B]
The auditor’s remuneration
[C]
Adjusted interim financial statements
[D]
Prior year’s financial statements
Answer: The auditor’s remuneration
47
When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the___________?
[A]
Amount of known misstatement is documented in working papers
[B]
Estimates of the total likely misstatement is less than materiality level
[C]
Estimate of the total likely misstatement is more than materially level
[D]
Estimates of the total likely misstatement cannot be made
Answer: Estimates of the total likely misstatement is less than materiality level
48
______the audit risks_______the materiality and_________the audit effort.
[A]
Lower, Higher, Lower
[B]
Lower, Lower, Higher
[C]
Higher, Lower, Lower
[D]
Lower, Higher, Higher
Answer: Lower, Higher, Lower
49
Test Checking refers to___________?
[A]
Testing of accounts and records
[B]
Checking of selected number of transactions
[C]
Examination of adjusting and closing entries
[D]
Checking of all transactions recorded
Answer: Checking of selected number of transactions
50
Window dressing implies_______________?
[A]
Curtailment of expenses
[B]
Checking of Wastages
[C]
Under valuation of assets
[D]
Over Valuation of assets
Answer: Over Valuation of assets
51
Errors of Omission are_____________?
[A]
Technical errors
[B]
Errors of principle
[C]
Compensating errors
[D]
None of the above
52
Internal check is carried on by___________?
[A]
Staff specially appointed for the purpose
[B]
Internal auditor
[C]
Supervisor of the staff
[D]
Members of the staff
Answer: Members of the staff
53
Which of the following statements is not true about continuous audit?
[A]
It is conducted at regular interval
[B]
It may be carried out on daily basis
[C]
It is needed when the organization has a good internal control system
[D]
It is expensive
Answer: It is needed when the organization has a good internal control system
54
Institute of Chartered Accountants of Pakistan was established in____________?
[A]
1949
[B]
1956
[C]
1961
[D]
1972
55
Goods sold on the basis of ‘sales or return ‘ should:
[A]
Be included in the stock
[B]
Not be included in the stock
[C]
Not be checked by auditor
[D]
None of the above
Answer: Be included in the stock
56
Of the following, which is the least persuasive type of audit evidence?
[A]
Bank statements obtained from the client
[B]
Documents obtained by auditor from third parties directly.
[C]
Carbon copies of sales invoices inspected by the auditor
[D]
Computations made by the auditor
Answer: Carbon copies of sales invoices inspected by the auditor
57
Which of the following statements is, generally, correct about the reliability of audit evidence?
[A]
To be reliable, evidence should conclusive rather than persuasive
[B]
Effective internal control system provides reliable audit evidence
[C]
Evidence obtained from outside sources routed through the client
[D]
All are correct
Answer: Effective internal control system provides reliable audit evidence
58
In an audit of financial statements, substantive tests are audit procedures that __________?
[A]
May be eliminated for an account balance under certain conditions
[B]
Are designed to discover significant subsequent events
[C]
Will increase proportionately when the auditor decreases the assessed level of control risk
[D]
May be test of transactions, test of balance and analytical procedures
Answer: May be test of transactions, test of balance and analytical procedures
59
The nature, timing and extent of substantive procedures is related to assessed level of control risk
[A]
Randomly
[B]
Disproportionately
[C]
Directly
[D]
Inversely
60
Which of the following is not corroborative evidence?
[A]
Minutes of meetings
[B]
Confirmations from debtors
[C]
Information gathered by auditor through observation
[D]
Worksheet supporting consolidated financial statements
Answer: Worksheet supporting consolidated financial statements
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