Quiz  /  Auditing Gate & PSU MCQ Questions With Answers

  • 1. 
    6.A number of checks and controls exercised in a business to ensure its efficient working is known as______

  • Internal check
  • Internal control
  • Internal audit

  • 2. 
    The distinction between the role of auditor and accountant can be best describe as

  • A. Accountant provide financial information for decision making while auditor determine whether the information properly reflects the economic events of the accounting period.
  • B. Accountant must have a thorough understanding of the principles and rules to prepare financial statement while auditor rely on the theory of evidence to verify the financial statement.
  • C. Auditor is responsible for detection and prevention of error and frauds while accountant ensure the credibility and quality dimension of financial statement.
  • D. Auditor must possess expertise in the accumulation and interpretation of audit evidence while accountant need to be expert in understanding the principles and rules.

  • 3. 
    9.Recording a transaction twice in the books of original entry is an error of __________

  • Principle
  • Commission
  • Duplication

  • 4. 
    Internal and external auditor performed a different methodology in their audits.

  • TRUE
  • FALSE

  • 5. 
    3.In case of government company, the auditor is appointed by __________

  • Central Government
  • State government
  • Board of director

  • 6. 
    8.Auditing begins where ______ ends

  • Selling
  • Inventory valuation
  • Accounting

  • 7. 
    4.The auditor prepares the audit report with the help of ________

  • Working papers
  • Audit note book
  • Trial balance

  • 8. 
    20._________ is the system in which we keep physical register of journal and ledger for keeping the records of each transactions.

  • Traditional accounting
  • Manual accounting
  • Cost accounting
  • Management accounting

  • 9. 
    Auditor unique role is for the following expertise except for

  • A. Determining proper audit procedure
  • B. Provide relevant information on economic event
  • C. Deciding the number and types of items to test evidence
  • D. Evaluating audit results

  • 10. 
    External auditor considered reliance on internal auditor based on the evaluation of effectiveness of audit conduct by internal auditor if

  • A. Independence of the audit team have been evaluated
  • B. Competency and skills needed are achieved
  • C. Recommendation from client point of view accepted
  • D. Relevant audit tests of the internal controls and financial statement have been performed

  • 11. 
    18.Investigation is an examination of ________

  • Books of accounts
  • Trial balance
  • Final account
  • All of these

  • 12. 
    Asset valuation is done by the ________ himself.

  • Auditor
  • Shareholder
  • Proprietor
  • Management

  • 13. 
    An Auditor can hold the audit of not more than ------- companies

  • 20
  • 15
  • 10
  • 30

  • 14. 
    17._________ auditing is computer assisted auditing

  • Private
  • Government
  • Electronic

  • 15. 
    Which of the following is NOT the categories of attestation service of a CA firm?

  • A. Audit of internal control over financial reporting
  • B. Review of historical financial statement
  • C. Management consulting services
  • D. Services provided regarding information technology

  • 16. 
    15.________ are the assets which may arise on the happening of an uncertain event.

  • Fixed assets
  • Intangible assets
  • Contingent assets
  • Wasting assets

  • 17. 
    2.Process of checking the evidence of the entries is called___________

  • Verification
  • Observation
  • Vouching

  • 18. 
    16._______ auditing helps use to reduce manual paper work

  • Electronic
  • Internal
  • External

  • 19. 
    The liability of auditor can be

  • Only civil
  • Only criminal
  • Either civil and criminal
  • Civil and /or criminal

  • 20. 
    The internal auditor’s independence is most likely to be compromised when the internal audit department is responsible directly to audit committee of the board of directors.

  • TRUE
  • FALSE

  • 21. 
    11.What are the techniques of verification?

  • Inspection
  • Observation
  • Confirmation
  • all the above

  • 22. 
    1.The word 'Audit ' is derived from a Latin word ''audire'' which means ________

  • To inspect
  • To examine
  • To hear

  • 23. 
    At the planning state, the auditor considered materiality at the financial statement level only

  • TRUE
  • FALSE

  • 24. 
    The first auditor of a company will hold office

  • For a period of one year
  • Till holding of statutory meeting
  • Till the conclusion of first annual general meeting
  • Till a new auditor is appointed

  • 25. 
    Which of the following describe the true relationship between auditor, client and external users?

  • A. Management provides capital to external users and auditor is hired to provide report relied upon by users for assurance.
  • B. External users rely on auditor’s report assurance to reduce information risk provided by management
  • C. Auditor ensure report are based on management decision on the economic event to be presented to external users
  • D. Management and auditor provide financial statement to external users
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