AUDITING MULTIPILE CHOICE QUESTIONS

UNIT – I

1. The term “Audit” originated from the Latin word.

(a) Audire (b) Adhere (c) Adihere (d) None of the above

2. ______is a systematic examination of the books and records or a business.

(a) Auditing (b) Vouching (c) Verification

(d) Checking.

3. ______the following are not objectives of auditing.

(a). Ascertain the profit and preparation of P/L Account, Balance sheet.

(b)Detection and prevention of frauds and errors.

(c)Give a true and fair view of financial amount.

(d) To submits the accounts to Government of India.

4. _______ the following is not a kind of audit.

(a)Statutory and private audit.

(b)Government and continuous audit.

(c)Continuous, final, Interim, Cash, Cost and Management audit.

(d) None of these.

5. An audit which is compulsory by the law __________.

(a)Government audit. (b) Internal audit. (c) Cost audit. (d) Statutory audit.

6. Instruction of audit issued by controller and auditor general of India ________.

(a) Statutory audit. (b) Final audit. (c) Management audit. (d) Government audit.

7. Audit done by the employees of the business undertaking is called _______.

(a) Final audit. (b) Management audit. (c) Government audit. (d) Statutory audit.

8. This kind of audit is conducted generally between two annual audit ______.

(a)Internal audit. (b) Interim audit. (c) Final audit. (d) Continuous audit.
9. Management audit otherwise called as _______.

(a) Final audit. (b) Efficiency audit. (c) Cost audit. (d) Cash audit.

10. The main object of an audit is ______.

(a)Expression of opinion
(b)Detection and Prevention of fraud and error
(c)Both (a) and (b)
(d) Depends on the type of audit

UNIT-II

1. Process of checking the evidence of the entries called _____________.

(a) Verification (b) Observation (c) Vouching (d) Inspection

2. To verify cash transactions, it is necessary.

(a) System of internal control (b) Check all transaction

(c) Documentary evidence for every transaction (d) All of the above.

3. Total amount spent for advertisement expenses be verified from the

(a) Receipts from the Medias or advertisement agency. (b) Fixed assets register

(c) Debtors books (d) None of the above.

4. Vouching helps the auditors to ascertain whether the entries in the book________ this is the basic
objective of auditing.

(a) True and fair (b) Only true (c) Only fair (d) None of the above

5. Voucher should be addressed to the ________.

(a) Auditor (b) Client (c) Employee (d) None of the above.

6. Serial number of vouchers should be ________.

(a) Colored (b) Continuous (c) Even number (d) Odd number.

7. ______ is/are an importance of vouching?

(a)Ensures all items are disclosed in the financial statement as per Schedule VI
provisions.

(b) It helps to verify whether entries are passed as per acceptable accounting principles.
 (c) Helps in detection and prevention of errors & frauds.

(d)All the above

8. Checking the head of account debited or credited during vouching helps the auditor to
________.

(a) Detect errors of principle (b) Check whether accounting is proper.

(c) Find errors of commission (d) All of the above

9. _______ of the following can be accepted as a supporting document.

(a) Invoice/Challan (b) Debit note/Credit note.

(c) Emails/letters. (d) All of the above.

10. Checking the date of voucher on the voucher during vouching mainly helps the auditor to
obtain evidence that_____.

(a) The transaction relates to current year. (b) The transaction has taken place.

(c) The transaction is genuine. (d) The transaction is legal.

UNIT-III

1. Verification refers to

a) Examination of journal and ledger

b) Examination of vouchers related to assets

c) Examining the physical existence and valuation of assets

d) Calculation of value of assets

2. Object of verification of assets

a) Physical verification of assets

b) Checking value of assets

c) Examining the authority of their acquisition

d) All of the above

3. Which of the following statements is correct?

a) Valuation is a part of verification b) Verification is a part of valuation

 c) Valuation has nothing to do with verification d) Auditor is a valuer

4. Stock should be valued at

a) Cost b) Market price

c) Cost price or market price whichever is lower d) Cost less depreciation

5. Valuation of Fixed Assets is based on the concept

a) Going concern b) Conservation

c) Money measurement d) Dual aspect

6. Valuation means

a) Calculating value of assets b) Checking the value of assets

c) Checking the physical existence of d) Examining the authenticity of
assets assets

7. Outstanding expenses should be verified with the help of

b) Balance
a) Cash book book

c) Journal proper d) None of the above

8. Book debts should be verified with the help of

a) Balance sheet b) Amount received from Debtors

c) Debtors schedule d) Certificate from the management

Investments in hand should be verified with the
9. help of
a) Schedule of
investments b) Balance sheet
c) Inspection of
securities d) Certificate from the bank

10. Floating assets are valued at

a) Cost

b) Market price

c) Cost price or market price whichever is less

d) Cost less depreciation

 UNIT-IV

1. First auditor of a company is appointed by the

a) Shareholders b) Central Govt.

c) Company Law Board d) Board of Directors

2. Which of the following persons is qualified to be a company auditor?

a) An employee of the company

b) A body corporate

c) A person who is indebted to the company for an amount exceeding Rs. 1000

d) A practicing-chartered accountant

3. The first auditor of a company will hold office

a) For a period of one year

b) Till holding of statutory meeting

c) Till the conclusion of first annual general meeting

d) Till a new auditor is appointed

4. Normally, a company auditor is appointed by the

a) Central Government b) Shareholders

c) Board of Directors d) Company Law board

5. An auditor in a casual vacancy is appointed by the

a) Board of Directors b) Shareholders

c) Central Government d) Company Law board

If an auditor is not appointed at annual general meeting, he is appointed
6. by the

a) The Central Government b) Board of Directors

e) Company Law board
c) Shareholders

7. A vacancy caused by resignation of the auditor is filled by

b) At the general meeting of

a) Board of Directors shareholders
 c) By the Central Government d) By the Company Law board

8. A special auditor is appointed by the

a) Shareholders b) Board of Directors

c) Central Government d) C & A - G

9. A government Co. auditor may be appointed by the

a) C & A – G b) Shareholders

c) Central Government d) None of the above

10. A company auditor can be removed before expiry of his term by

a) Shareholders b) Board of Directors

c) Central Government d) State Government