31 Oct 2014

Auditing Quiz




Auditing Multiple Choice Questions (MCQS) Page-2. These Mcqs are very helpful for preparation of various posts i.e. Senior Auditor, Junior Auditor,Accountant. These Mcqs are also Important for Punjab Public Service Commission, National Testing Service, Federal Public Service Commission Tests/examinations.

Pages: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 10 11| 12




16. WHICH OF THE FOLLOWING IS THE MOST APPROPRIATE POTENTIAL REACTION OF THE AUDITOR TO HIS?
ASSESSMENT THAT THE RISK OF MATERIAL MISSTATEMENT DUE TO FRAUD IS HIGH IN RELATION TO
EXISTENCE OF INVENTORY?

A) VISIT LOCATION ON SURPRISE BASIS TO OBSERVE TEST COUNTS
B) REQUEST INVENTORY COUNT AT A DATE CLOSE TO YEAR­END
C) VOUCH GOODS SENT ON APPROVAL VERY CAREFUL Y
D) PERFORM ANALYTICAL PROCEDURES.

17. WHICH OF THE FOLLOWING IS NOT LIKELY TO BE A FRAUD RISK FACTOR RELATING TO MANAGEMENT’S? CHARACTERISTICS

A) TAX EVASION B) FAILURE TO CORRECT KNOWN WEAKNESS IN INTERNAL CONTROL SYSTEM
C) ADOPTION OF CONSERVATIVE ACCOUNTING PRINCIPLES
D) HIGH MANAGEMENT TURNOVER

18. PROFESSIONAL SKEPTICISM REQUIRES THAT THE AUDITOR ASSUME THAT MANAGEMENT IS

A) REASONABLY HONEST
B) NEITHER HONEST NOR DISHONEST
C) NOT NECESSARILY HONEST
D) DISHONEST UNLESS PROVED OTHERWISE

19. WHICH OF THE FOLLOWING INFORMATION SHOULD A SUCCESSOR AUDITOR OBTAIN DURING THE INQUIRY OF?
THE PREDECESSOR AUDITOR BEFORE ACCEPTING ENGAGEMENT?

I) INFORMATION ABOUT INTEGRITY OF MANAGEMENT
II) DISAGREEMENT WITH MANAGEMENT CONCERNING AUDITING PROCEDURES
II) REVIEW OF INTERNAL CONTROL SYSTEM.
IV) ORGANIZATION STRUCTURE
A) (I) AND (I) B) (I) AND (I I) C) (I), (I) AND (I I) D) I) AND (I I)

20. THE AUDIT ENGAGEMENT LETTER, GENERAL Y, SHOULD INCLUDE A REFERENCE TO EACH OF THE FOLLOWING EXCEPT

A) LIMITATIONS OF AUDITING
B) RESPONSIBILITIES OF MANAGEMENT WITH RESPECT TO AUDIT WORK
C) EXPECTATION OF RECEIVING A WRITTEN MANAGEMENT REPRESENTATION LETTER.
D) A DESCRIPTION OF THE AUDITOR’S METHOD OF SAMPLE SELECTION.

21. THE USE OF AN AUDIT ENGAGEMENT LETTER IS THE BEST METHOD OF ASSURING THE AUDITOR WILL HAVE WHICH OF THE FOLLOWING?

A) AUDITOR WILL OBTAIN SUFFICIENT APPROPRIATE AUDIT EVIDENCE.
B) MANAGEMENT REPRESENTATION LETTER
C) ACCESS TO ALL BOOKS, ACCOUNTS AND VOUCHERS REQUIRED FOR AUDIT PURPOSE
D) COOPERATION FROM OTHER AUDITORS

22. THE USE OF AN AUDIT ENGAGEMENT LETTER IS THE BEST METHOD OF DOCUMENTING

I) THE REQUIRED COMMUNICATION OF SIGNIFICANT DEFICIENCIES IN INTERNAL CONTROL
II) SIGNIFICANTLY HIGHER CONTROL RISK THAN THAT ASSESSED IN PRIOR AUDIT.
II) OBJECTIVE AND SCOPE OF AUDITOR’S WORK
IV) NOTIFICATION OF ANY CHANGES IN THE ORIGINAL ARRANGEMENTS OF THE AUDIT.
A) (I) AND (I) B) (I) AND (II) C) I AND (IV) D) (I I AND (IV)

23. AN AUDITOR WHO ACCEPTS AN AUDIT BUT DOES NOT POSSESS THE INDUSTRY EXPERTISE OF THE BUSINESS ENTITY SHOULD

A) ENGAGE EXPERTS
B) OBTAIN KNOWLEDGE OF MATTERS THAT RELATE TO THE NATURE OF ENTITY’S BUSINESS
C) INFORM MANAGEMENT ABOUT IT
D) TAKE HELP OF OTHER AUDITORS

24. THE LEAST IMPORTANT ELEMENT IN THE EVALUATION OF AN AUDIT FIRM’S SYSTEM OF QUALITY CONTROL WOULD RELATE TO

A) ASSIGNMENT OF AUDIT ASSISTANTS
B) SYSTEM OF DETERMINING AUDIT FEES
C) CONSULTATION WITH EXPERTS
D) CONFIDENTIALITY OF CLIENT’S INFORMATION

25. THE PRIMARY PURPOSE OF ESTABLISHING QUALITY CONTROL POLICIES AND PROCEDURES FOR DECIDING ON CLIENT EVALUATION IS TO

A) ENSURE ADHERENCE TO GENERAL Y ACCEPTED AUDITING STANDARDS
B) ACCEPTANCE OR RETENTION OF CLIENTS WHOSE MANAGEMENT DOES NOT LACK INTEGRITY
C) ENSURE AUDIT FEES IS CHARGED ACCORDING TO THE TYPE OF AUDIT WORK ASSIGNED
D) ALL OF THE ABOVE

26. WHICH OF THE FOLLOWING IS NOT A QUALITY CONTROL CONSIDERATION ON ACCEPTING A NEW CLIENT?

A) AVAILABILITY OF AUDIT ASSISTANTS WITH NECESSARY SKILL AND COMPETENCE.
B) PROVISION OF OTHER SERVICES TO THE CLIENT WHICH MAY IMPAIR INDEPENDENCE
C) PREDECESSOR AUDITOR’S ADVICE AS TO WHETHER AUDIT FEES WERE PAID PROMPTLY
D) REVIEW OF AUDIT WORK DONE BY ONE PARTNER BY THE OTHER

27. AN AUDITOR OBTAINS KNOWLEDGE ABOUT A NEW CLIENT’S BUSINESS AND ITS INDUSTRY TO                                                          

A) MAKE CONSTRUCTIVE SUGGESTIONS CONCERNING IMPROVEMENTS TO THE CLIENT’S INTERNAL CONTROL SYSTEM
 B) EVALUATE THE APPROPRIATENESS OF AUDIT EVIDENCE OBTAINED
C) UNDERSTAND THE EVENTS AND TRANSACTIONS THAT MAY HAVE AN EFFECT ON CLIENT’S FINANCIAL STATEMENTS.

D) ALL OF THE ABOVE 

                             INTRODUCTION TO AUDITING


Answers


16. A 17. C 18. B 19. A 20. D 21. C 22. D 23. B 24. B 25. B 26. C 27. c

0 comments:

Like Page