Auditing - Questions and Answers for Competitive Exams | GkSeries

37. An auditor who accepts an audit but does not posses the industry expertise of the business entity should ______________.

• [A] engage experts.
• [B] obtain knowledge of matters that relate to the nature of entity business.
• [C] inform management about it.
• [D] take help of other auditors.

Answer: Option [B]

38. Audit of banks is an example of __________.

• [A] Statutory audit.
• [B] Balance sheet audit.
• [C] Concurrent audit.
• [D] All of the above.

Answer: Option [D]

39. In India balance sheet audit is synonymous to _______________.

• [A] Annual audit.
• [B] Continuous audit.
• [C] Detailed audit.
• [D] Statutory audit.

Answer: Option [A]

40. Balance sheet audit included verification of ________.

• [A] assets
• [B] liabilities
• [C] income and expenditure accounts where appropriate.
• [D] all of the above.

Answer: Option [D]

41. Which of the following is not a fact of EPA?

• [A] Economic audit.
• [B] Efficiency audit.
• [C] Expenditure audit.
• [D] Effectiveness audit.

Answer: Option [C]

42. In determining the level of materiality for an audit what should not be considered?

• [A] Prior years errors.
• [B] The auditor remuneration.
• [C] Adjusted interim financial statement.
• [D] Prior year financial statements.

Answer: Option [B]

43. Which of the following statement 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: Option [D]

44. 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: Option [C]

45. Which of the following Auditing Assurance Standard deals with Audit planning?

• [A] AAS-7.
• [B] AAS-8.
• [C] AAS-9.
• [D] AAS-3.

Answer: Option [B]

46. Audit Programme is prepared by ___________.

• [A] the auditor.
• [B] the client.
• [C] the audit assistants.
• [D] the auditor and his audit assistants.

Answer: Option [D]

47. The quantity of audit working papers complied on engagement would most be affected by _________________.

• [A] management integrity.
• [B] auditor experience and professional judgement.
• [C] Auditor qualification.
• [D] control risk.

Answer: Option [A]

48. Which of the following is not an advantage of the preparation of working paper?

• [A] To provide a basis for review of audit work.
• [B] To provide a basis for subsequent audits
• [C] To ensure audit work is being carried out as per Programme.
• [D] To provide a guide for advising another client on similar issues.

Answer: Option [D]