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Dr.G.R.Damodaran College of Science
(Autonomous, affiliated to the Bharathiar University, recognized by the UGC)Reaccredited at the 'A' Grade Level by the NAAC and ISO 9001:2008 Certified
CRISL rated 'A' (TN) for MBA and MIB Programmes
III.B.COM A.M[2013-2016]
SEMESTER - V
CORE: PRINCIPLES OF AUDITING - 513C
Multiple Choice Questions.
1. __________ is a systematic examination of the books and records or a business.
A. Auditing.
B. Vouching.
C. Verification.
D. Checking.
ANSWER: A
2. Which of 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.
ANSWER: D
3. Which of 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.
ANSWER: D
4. An audit which is compulsory by the law __________.
A. Government audit.
B. Internal audit.
C. Cost audit.
D. Statutory audit.
ANSWER: D
5. Instruction of audit issued by controller and auditor general of India ________.
A. statutory audit.
B. final audit.
C. management audit.
D. government audit.
ANSWER: D

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6. Audit done by the employees of the business undertaking is called _______.
A. final audit.
B. management audit.
C. government audit.
D. government audit.
ANSWER: B
7. This kind of audit is conducted generally between two annual audit ______.
A. internal audit.
B. interim audit.
C. final audit.
D. continuous audit.
ANSWER: B
8. Management audit otherwise called as _______.
A. final audit.
B. efficiency audit.
C. cost audit.
D. cash audit.
ANSWER: B
9. A number of checks and controls exercised in a business to ensure its efficient working is known as
________.
A. Internal check.
B. Internal control.
C. Internal audit.
D. Interim check.
ANSWER: B
10. Voucher relates to _________.
A. cash receipt.
B. cash payment.
C. credit transactions.
D. all the above.
ANSWER: D
11. Internal check is meant for ___________.
A. prevention of frauds.
B. detection of frauds.
C. helping audit is depth.
D. detection of errors.
ANSWER: A
12. Internal auditor is appointed by ________.
A. the management.
B. the shareholders
C. the government.
7/29/2015 10:12 AM

.2.3 of 23 http://172. D. B.B. D. B. . D. None of the above. C. Auditing begins where ______ ends. Acts to be performed. Proprietorship concern. goods outward book C. ANSWER: C 14. ANSWER: C 16. D. For which of the following. Audit is optional? A. receipt of Stores. Selling. D.M[2013-2016]. Trusts. A. A. B. B. A kind of audit conducted for a part of the accounting year is called _______. D. C. goods inward book. Continuous audit. Partial audit. 7/29/2015 10:12 AM . B. Periodical audit. Partial audit. Complete audit. The receipt of goods must be entered in _________. Joint stock companies.16..20/printqp. Audit principles. Interim audit. ceipt issue and balance of stores ANSWER: A 18. ANSWER: A 17. C. The audit that is made compulsory under statute is called _________. A. A. Purchases. D. reduction of share capital. B. A.. Statutory audit. B. Auditing standards differ from auditing procedures in that procedures relate to ________. ANSWER: C 19. C. increasing the share capital. Confirmation of the court is necessary for __________.php?heading=III. inventory valuation. A. he statutory body. ANSWER: A 15. Measure of performance. ANSWER: A 13. C.COM A. Audit judgments. Cost audit. Accounting.

C. the rules and regulations prescribed for writing up the books of accounts. A. none of the above. memorandum or an outline of the work to be done in a business. mutilates.. if the destroys. A. writing off fixed assets. to verify the assets and liabilities. D.M[2013-2016]. ANSWER: B 22.. B. One of the audit procedures to check the issue of share capital of the newly formed company is __________. Profit prior to incorporation may be utilized to ___________. C. if he has not contravened the provisions of sec.. a trial work. the work is executed completely for which the workers are paid wages. none of the above. to know that all receipts and payments have been properly recorded. ANSWER: A 21.. to check the internal control system in business. An audit programme is ___________. the memorandum of association and articles of association. with a view to deceive any person. ANSWER: B 24. if he is an auditor of the company. D.php?heading=III. A. C. A. D. all the above. issue of new shares.20/printqp. C. secrets etc. C. write of goodwill B. pay interest on purchase consideration C. The main object of the audit of the cash book may be ________. B.16. B. D. D. books etc. the workers are working regularly. D. ANSWER: B 20. A. The purpose of the audit of wage payment is to determine that __________. ANSWER: A 7/29/2015 10:12 AM .227.. ANSWER: A 23. A. vouchers. the workers are paid the correct amount of wages under proper authorization. the share transfer register. B. C.2. if he has examined all the documents of the company. the issue of debenture.B. any documents. D. to gain knowledge of clients accounting system. An auditor of a company will be held liable under the companies act _________.4 of 23 http://172. a description.COM A. to check the bank balance. ANSWER: B 25. conversion of shares into stock. B.

2. ANSWER: A 32. ANSWER: C 31. C. C. D. D. to discover errors and frauds.B. D. A. B. Shareholders. D. Capital reserves are created out of profits of __________.16. none of the above. to prevent errors and frauds. C. B. Debtors.20/printqp. B.. the increase in the value of an asset. None of the above. ANSWER: B 27. 26. The main objects of investigation is _________. B. B. A. Internal audit. the act of establishing the accuracy of entries in the books of accounts. a secret reserve. A. an examination of the books of accounts. it should not point out mistakes. ANSWER: B 29. Internal control. B. A. to verify statements.. a revenue nature. contingency reserve. an appreciation to the company. all the above. a capital nature. it should not be based on factual information. D. C.M[2013-2016]. B. Debenture holders. A. Depreciation is _________. the art of recording the business transaction. A. The owners of the company are called __________. C. The work of one clerk is automatically check by another clerk is called _________.COM A.. D.5 of 23 http://172. C. A. None of the above. ANSWER: D 7/29/2015 10:12 AM . C.php?heading=III. it should not be based on balance sheet. Internal check. D. ANSWER: A 28. Verification is __________. a credit to shareholders. the decrease in the value of an asset. it should offer constructive and timely suggestions to the management. ANSWER: C 30. A good audit report must at least meet one of the following qualifications __________.

D. 7/29/2015 10:12 AM . Official. Internal controls and internal check are ____________. trading concern. A. for a period of one year. An auditor is like a ______. unnecessary.M[2013-2016]. till the conclusion of the first annual general meeting. The first auditors appointed hold office ____________. D. D. D. D. avoidable.. Watchman. ANSWER: B 37.B. Criminal. depends upon directors. C. Share may be issued _____________. for a period of two years. internal control includes internal check. at premium.. watch dog.php?heading=III. D.6 of 23 http://172. at discount. B. one and the same. processing concern. Audit of company account is _____________. C. ANSWER: D 39. ANSWER: C 36.COM A. 33. B.16.20/printqp. manufacturing concern.2. foolish dog. A.. A. C. The liabilities of an auditor can be _________. B. C. D. Civil. None of the above. B. Civil and Criminal. C. C. B. ANSWER: C 34. for a period of three years. at par. mad dog. inefficient concern. B. A. A. compulsory. ANSWER: A 38. all the above. A. B. A. C. Special audit is necessary for _________. different. ANSWER: D 35.

his expert opinion about the accounts. D. any director.php?heading=III.COM A. C.16. Cost accountant. B. general meeting. directors of the company. D. election at the annual general meeting. Concurrent audit is a part of ______________. a critical review of the accounts.M[2013-2016]. ANSWER: C 45. A. ANSWER: C 46. ANSWER: C 43. general meeting. D. A. ANSWER: A 41. B. board of directors. continuous audit. C.B. A company auditor can be removed by _________________. 7/29/2015 10:12 AM . Audit in depth means __________. board of directors. C. B. intensive audit of each and every item. internal audit system. a factual position about the accounts. C.. audit of each and every item. financial assistance. managing director.7 of 23 http://172. B. ICWA.2. ANSWER: D 44. C.20/printqp. need not possess any professional qualification. D. C. D. intensive audit of a few items. A. ANSWER: A 40. central government. Internal auditor of a company must be _______________. managing director. Chartered accountant. debenture holders. A. The companys auditor is expected to give _____________. B. C. audit of a few selected items. A vacancy caused by resignation of an auditor is filled by _________. internal check system. Auditors of a joint stock company are appointed by ______________. A. annual general meeting. ANSWER: B 42. D. A. B. A.. B..

Audit in depth is synonymous for ____________. ANSWER: D 53. completed audit. D. A. ANSWER: D 50. Expenditure audit. C. A. liabilities. ANSWER: A 48. C. C. ANSWER: D 49. D.8 of 23 http://172. ANSWER: C 47. 7/29/2015 10:12 AM . B. verification of assets and liabilities. Detailed audit. D. C. D. It is conducted at regular interval. routine checks. Which of the following statements is not true about continuous audit? A.. B. D.16. When issuing unqualified opinion the auditor who evaluated the audit findings should be satisfied that the ______________. C. final audit. Continuous audit.B. ANSWER: C 52. detailed audit.20/printqp. B. Statutory audit. It may be carried out on daily basis.M[2013-2016]. assets. Balance sheet audit included verification of ________.php?heading=III. Which of the following is not a fact of EPA? A. ANSWER: C 51. Economic audit. examination of adjusting and closing entries.. C. A.2. It is needed when the organisation has a good internal control system. B. Annual audit. B. D.. A. Balance sheet does not include ___________. complete audit.COM A. Efficiency audit. final audit. B. It is expensive. income and expenditure accounts where appropriate. In India balance sheet audit is synonymous to _______________. all of the above. A. amount of known misstatement is documented in working papers. vouching of income and expense accounts related to assets and liabilities. D. Effectiveness audit.

evidence for audit conclusions. ANSWER: D 59. Audit Programme is prepared by ___________. B.php?heading=III. C. Prior year financial statements. Analytical procedures issued in the planning stage of an audit. timing and extent of other audit procedures. estimates of the total likely misstatement is less than materiality level. B. D. Computations made by the auditor. B. C. Carbon copies of sales invoices inspected by the auditor. B. ANSWER: C 57.16. Which of the following best describes the primary purpose of audit programmed preparation? 7/29/2015 10:12 AM . D. D. ANSWER: C 60. AAS-9. D. AAS-3. ANSWER: B 55. A. Which of the following Auditing Assurance Standard deals with Audit planning? A. B. B. C. C. the auditor and his audit assistants. ANSWER: B 58. the client. helps to determine the nature. directs attention to potential risk areas.. B.B. retained in auditor office until a change in auditors. A. generally ___________. ANSWER: D 56. AAS-8. D. the audit assistants. Bank statements obtained from the client.COM A. D. AAS-7. estimates of the total likely misstatement cannot be made. C. C.20/printqp. the auditor. all of the above. C. owned by the client. Of the following. Prior years errors.9 of 23 http://172. owned by the auditor. indicate important aspects of business... The auditor remuneration. A. D. The working papers which auditor prepares for financial statements audit are _______ .2. Documents obtained by auditor from third parties directly. Adjusted interim financial statement. ANSWER: B 54. In determining the level of materiality for an audit what should not be considered? A. estimated of the total likely misstatement is more than materiality level.M[2013-2016]. which is the least persuasive type of audit evidence? A.

. D. To ensure audit work is being carried out as per Programme. B.10 of 23 http://172. Section 224(1) and Section 224(2). Members of the company. Who is responsible for the appointment of statutory auditor of a limited company? A.2. Which of the following sections deals with qualification of the auditor? A. The central government. B.16. All partners should be chartered account. C. To provide a basis for review of audit work. B.. Majority of the partners should be practicing in India.COM A.php?heading=III. past years financial statements. A partnership firm can be appointed as a statutory auditor of limited company.B. ANSWER: C 66. Section 226(1) and Section 226(2). Directors of the company. extracts from clients bank statements. Appointment can be made in the name of the firm. C. ANSWER: D 7/29/2015 10:12 AM . within one month of the commencement of the business of the company. To provide a guide for advising another client on similar issues. A. The board of directors shall appoint first auditor of a company ___________. ANSWER: D 62. ANSWER: C 61. attorney letters. debt agreements. B. D. C. D..M[2013-2016]. ANSWER: B 64. To detect errors or fraud. D. To gather sufficient appropriate evidence. To provide a basis for subsequent audits. C. Which of the following is not an advantage of the preparation of working paper? A. D. Which of the following statement is not true? A. B. To comply with GAAP. B. ANSWER: A 65.20/printqp. B. Section 226(3) and Section 226(4). C. C. within one month of the promotion of the company. ANSWER: A 63. To assess audit risk. include ________ A. C. within one month of incorporation of the company. The auditor permanent working paper file should not normally. The state government. A. D. within one month of completion of capital subscription state of the company. D. Section 224(3) and Section 224(4).

COM A. D.11 of 23 http://172. the shareholders in the first annual general meeting. The shareholders are authorized to do so. the shareholders in a general meeting.php?heading=III. Internal auditor. the shareholders at an annual general meeting. a general meeting. B. The approval of the central government is required for such removal.20/printqp. the shareholders shall appoint them at _______ by passing a resolution. A. Section 224(8). B.B. The section which contains provisions regarding remuneration of the auditor is _____. The auditor of a government company is appointed by the C & AG. Who out of the following cannot be appointed as a statutory auditor of the company? A. C. ANSWER: A 68. D. 7/29/2015 10:12 AM . first annual general meeting. B.. the board of directors. He is removed at a general meeting. A. 67. In case the directions fail to appoint first auditors. A. statutory meeting. D. His remuneration is fixed by _____________. annual general meeting. Section 224(7). C. C. B. Which of the following statement is not correct regarding removal of first auditor before expiry of the term? A. the board of directors.M[2013-2016]. Erstwhile director. C.. The provision for such removal are contained in section 224(7). ANSWER: C 72.. The retiring auditor does not have a right to _________.2. the central government. ANSWER: A 71. D. be heard at the meeting. D. ANSWER: C 70. the C & AG. ANSWER: B 69. B. get his representation circulated. A. speak as a member of the company.16. ANSWER: D 73. D. A. make written representations. B. B. C. Section 224(6). The authority to remove the first auditor before the expiry of term is with ___________. C. Section 224(9). the shareholders.

12 of 23 http://172. board of directors in board meeting. D. obtain information and explanation from the employees and officers. unlimited liability. B. As per C & AG Act.M[2013-2016]. ANSWER: B 77. 7/29/2015 10:12 AM . shareholders in an annual general meeting. C. B. A. Which section givers such powers? A.20/printqp. both (2) and (3).16. Both (1) and (2). account and documents of the company. Any chartered accounted who is not in practice. Section 233(A). Special audit is conducted at the order of the central government. books and accounts of a company.. manufacturing. C. C. ANSWER: C 79. four years.B. ANSWER: A 76. A statutory auditor has a right of access at all times to ___________. books. D. notices and documents of the company. ANSWER: B 74. Section 242(B). Only (2) and (3). A. D. B. C.. B. non-profit making. A. accounts and vouchers of the company. The auditor has a right to _________.COM A.. D. obtain information and explanation necessary for the purpose of audit. Who among the following can be appointed as special auditor by the central government? A. four years. books. Auditor of a _______ company does not have right to visit foreign branches of the company. The statutory auditor.php?heading=III. 1971 the tenure of the comptroller and Auditor General is ______ a. section 233(B) C. ANSWER: B 80. D. Chartered accountant in practice. A. Relative of a director. Section 242(A). B. ANSWER: B 78. D. any of the above.2. The branch auditor is appointed by ____________. C. shareholders in general meeting. A. obtain information and explanation. B. D. ANSWER: C 75. C. banking.

Audit of transactions does not include __________. performance audit. D.COM A. ANSWER: C 81. B. C. A.M[2013-2016].. audit of amortization of debt. Audit of sanctions. B. ANSWER: A 83. B. submitted to pwd department.2. six years. C. An auditor appointed by the A & AG. the BOD of the company B. audit of receipts. D. ANSWER: B 7/29/2015 10:12 AM . C.. A. C.B. audit of expenditure. sent to concerned ministries/departments. A. Audit reports on PSU are ____________. D. B. remittance audit. A. ANSWER: B 82. submitted to the president/governor for being laid before the parliament B. ANSWER: A 86. D. D. ANSWER: C 84.16. Who among the following is eligible to be appointed as an audit of Government Company? A. submitted to bod of concerned psu. C. audit of borrowings. D. A chartered accountant whether in practice or not. five years. The income tax department has sent MR. D. efficiency cum performance audit. deposits and remittances does not cover ____________. C.php?heading=III.13 of 23 http://172. A chartered accountant in practice.20/printqp. audit of receipts. audit of expenditure. the company secretary. seven years. the legislature. B. C. audit of stores and stock. A. The government Auditor detected this while conducting ____________.. propriety audit. Audit of rent. An unsound mind person. The statutory auditor of a Government Company submits his report to _________. X refund of Advance tax. ANSWER: B 85. the C & AG.

20/printqp. appointing a librarian. provide physical security for programme files.B.. participates in computer software acquisition decisions. Which of the following statement is not true of the test data approach in a test of computerized accounting system? A. A. audit trail is in electronic form. Test data should consist of data related to all controls prevalent in the organisation. In a computer based accounting system. The objective of expression of opinion on financial statements.. design documentations for computerized operations. C. Which of the following activities would most likely be performed by EDP department? A. B. Authorizing transactions. C.. A. B. ANSWER: B 93. Compliance procedures adopted by the auditor. D. Performance of substantive procedures. B. 87.php?heading=III. appointing EEP auditor. ANSWER: C 90. When computer programmed or files can be accessed from terminals. Parity checks. 7/29/2015 10:12 AM . Test data tests only those controls which the auditor wished to rely. C. ANSWER: C 91. controlling passwords. The potential for human error in the CIS environment is greater as compared to manual system.14 of 23 http://172. General Controls will be ineffective when EDP Department ___________. Evaluation of inherent risk and control risk. Distributing output. originate changes in master files. C. B. ANSWER: D 89. Which of the following CAAT allow fictitious transactions planted by the auditor to be processed along with real ones on client system? A.16. Integrated test facility. access can be limited to authorized individuals by __________. The result of test data indicates that all the application and general controls are functioning properly.2. D. Which of the following statement is not distinguishing feature for computer based processing and manual processing? A. B.M[2013-2016]. B. Correction of transaction errors. D. C. Which of the following will not affect audit in a CIS environment? A. D. D. Errors in a CIS environment are less systematic as compared to error in manual processing. D. Both (a) and (b). ANSWER: A 88. Test data processed by the client computer programmed under the auditors control. ANSWER: A 92. C. Computer processing offers management a variety of analytical tools.COM A.

C. purchase orders. none of the above. dividend etc. performance of procedures. access client data files. D. C. ANSWER: C 97.. D. D.php?heading=III. ANSWER: A 94. C.. and commission etc to _____________. D. B. interest. ANSWER: D 95. Sale of scrap. The Guidance Note on Revenue issued by the ICAI does not deal with _________. sales orders. the auditor should draw a sample from a file ______. Test data approach. ANSWER: D 98.20/printqp.. the auditor is most likely to examine cost records? A. sales revenue. Credit sales. deposited with the cashier. sales invoices. C. A.B.2. B. D. held with the company accountant. revenue from sale of fixed assets.15 of 23 http://172. D. In case of unclaimed wages. An auditor is least likely to use computer software to _________. revenue rendering service. ANSWER: A 96. A. Generalized audit software. identify cases of unrecorded revenue. A. income from interest. C. B. D. B. For vouching of which item. ensure proper disclosure in the balance sheet .COM A. the amount has been deposited in a separate bank account. Bad debts recorded. ANSWER: C 99. ANSWER: A 7/29/2015 10:12 AM . auditor should examine whether _________. assess control risk. performing analytical procedures. The auditor should examine subsequent realization of revenue such as dividends. Parallel simulation. B. A. B.M[2013-2016]. B. Commission earned. A. C. To test whether sales have been recorded. bill of lading. recomputed accrued income on the data of balance sheet.16. held in a safe deposit box. C.

. B.16. D. Debit balance may be due to __________. advice notes and inward return notes. B. Its objective is to establish existence. 100. Selecting supplies. C. inspection report and inward return notes. Sales tax. The auditor has to form an opinion on managerial aspects. advance paid against an order. goods returned. B. Which of the following is most crucial to a purchase department? A.php?heading=III. Which of the following is not true with regard to verification of assets? A. Valuation of assets is the responsibility of management. Assuring the quality of goods. Excise duties. wrong debit to supplier account.B. Debit notes. The auditor can rely on a certificate issued by an authorized valuationer as to the valuation of assets in the balance sheet. ANSWER: C 106. advice notes and inward return notes.16 of 23 http://172. Authorizing the acquisition of goods. It invoices substantiation of occurrence of transactions. management audit. possession. D.. In order to vouch. Credit notes. have credit balance. ANSWER: A 101. D. Reducing the cost of acquisition. 7/29/2015 10:12 AM . valuation and disclosure of assets. which of the expenses. In case of sales return. B. advice notes and inward return notes. ANSWER: D 104. Credit notes. Which of the following statements is not true? A. Custom. the auditor should examine which documents? A. financial audit. For granting subsidy to the sick units. B. A. any of the above. C. D. statutory audit. C. D.2. The auditor should have the asset as per generally accepted accounting principles. the audit required would be ___________.. Purchase invoices. B. D. ownership. D. C. B. C. C.20/printqp.M[2013-2016]. C. Valuation is not part of auditor duty. A. ANSWER: A 105. the auditor will examine Bill of entry? A. internal audit.COM A. The creditors accounts generally. ANSWER: D 102. The auditor has to form an opinion on different aspects. Income tax. ANSWER: C 103.

3. A.A system of automatic checking. record of important points and enquires which an auditor has to refer to his clients. Test Check . extraordinary general meeting. B. A. D. balance sheet and profit and loss account show a true and correct view of the company. C. 1.. an accounting standard. B. an auditor examines the system of ___________. B. ANSWER: A 107. Investigation . 3. records of mistake and errors detected during the course of audit of account books. D.1. Which of the following pairs are correctly matched? A. 2. 100000 built up when the company is not shown in the balance sheet.2. testing and assessing.16.3. Statutory auditor of a company is the case of a casual vacancy may be appointed by the ___________. C. ANSWER: C 113. ANSWER: A 109. goodwill worth Rs.M[2013-2016]. B. personal notebook of an auditor. ANSWER: D 112. D. A.. C. Internal control . proper books of accounts as required by law have been refused access to some of these books. board of directors. The auditor of a company not supposed to issue qualified report when __________. Audit Note Book is a ____________. B.General examination of all accounting records. C.COM A. Surprise checks are part of ____________.vouching. an auditor working papers. By observing. 7/29/2015 10:12 AM .php?heading=III. ANSWER: A 111.verification. A. internal audit. B. D. managing director.Random Checking.B. internal control. C.2. ANSWER: B 108.2. Internal Check . D.17 of 23 http://172. an audit programme. government concerned. C. D.2. B. A.1.Includes internal check and internal audit. Consider the following activities:valuation.1. an auditors report. goodwill is shown in the balance sheet although it has been totally lost.. ANSWER: D 110. A.20/printqp. record of work performed by an auditor. affair and are drawn in conformity with law. 3.

Authorized capital. checking pass-book entries by the accountant. government auditor. C. the statutory auditor. D.COM A. B. A.20/printqp.16. test checks by the auditor. C. ANSWER: D 116. C. amount received in cash and summarized. A. general body of share holders. D. C. B. B. A. D. ANSWER: A 119. Sampling is used in the case of _____________. ANSWER: D 117. . ANSWER: C 115. government orders.. agreement . ANSWER: B 114. Balance sheet and Directors report. C. An auditor of a partnership firm is appointed as per _____________. status. suppression by the works managers. 7/29/2015 10:12 AM . C. board of directors when the managing director is also present. A. subscribed capital and paid-up capital.php?heading=III. continuous audit. Institute of internal auditors of India. statutory auditor. Number of shares allotted. ANSWER: B 120. D. majority shareholders. B. D. D. A. In case of audit of statutory report.. B. statutory audit.M[2013-2016]. an auditor is expected to give his report on the ____. none of these.2. A company auditor may be removed in the meeting of the ___________. D. convention. Receipt and payment account. Director qualification calls in arrears and calls in advance. Management audit is conducted by ____________. transactions are few but complicated. Board of directors of the company. A continuous audit is not suitable where the _____________. collection of debts by the accountant. ANSWER: D 118. C. B. A. A. Profit and loss account.18 of 23 http://172..B. board of directors. Internal auditor is appointed by the _____________. shareholders of the company. cost auditor.

Statutory audit . The Companies Act. C. A. Management audit is ordered by the ___________. ANSWER: C 123. C. A.20/printqp. company law board. None of these.B. The remuneration of an auditor of partnership firm is fixed by _____. A file which contains rules governing the organisation under audit is known as _____. ANSWER: C 121.2. A. Internal audit . D. a statutory requirement. ANSWER: D 127. ANSWER: A 122. ANSWER: A 125. C. shareholders of the company. internal work is being carried on in a satisfactory manner. C. Continuous Audit . government. Section 224 of the companies Act. an investigation into the conduct of director. B. workers of a company. there is no urgency to finalize the accounts on a particular date.. A.Obligatory. B. which one of the following pairs is not correctly matched? A. B.COM A.M[2013-2016].19 of 23 http://172. B. C. B.. The Government. board of directors. D. B. D.Voluntary. A. Permanent file. C. 7/29/2015 10:12 AM . an independent appraisal of the total a management process. 1956 deals with __________. D. D. ANSWER: B 126. ANSWER: D 124.16. central government. D. As far as a company is concerned. Special audit of the accounts of a company is directed by ______________. D. SEBI.php?heading=III.. Convert file.Mandatory. Routine file. Management . system of internal check in operation is not satisfactory. Precedence file. C. an independent appraisal of competitiveness of business.Optional. comptroller and auditor general of india. B. Management audit is ___________. The Partnership Act.

M[2013-2016].B. liability of an auditor. appointment and remuneration of auditor. B. B. power of an auditor. D. help in formulating future plans.. in between one statutory audit and an internal audit in the same accounting period. organizing. methods of conducting a business affair and reporting in annual report. C. in between one statutory audit. C. one management audit and one internal audit. actuating and controlling compared to norm of successful operation. A. special audit.COM A. periodic assessment of company managerial planning. check and correct frauds and errors. A. ANSWER: A 130. B. D. ANSWER: A 133. C. The periodic assessment of companys activities by the statutory auditor. help in detecting frauds and errors. Interim audit refers to an audit conducted ___________.16.. A. expenses of auditor. 7/29/2015 10:12 AM . C. D.20 of 23 http://172. Test Checking reduces the _________. determine if the financial statements fairly represent the actual financial position and the working results of the organization. accuracy and validity of management authorization to the account section employees. A. in between the two different accounting years. B. ANSWER: C 131. early finalization of annual account. facilitating final audit. cost audit. D. ANSWER: B 129. in between two statutory annual audits within the same accounting period. D. work of an auditor. B. B. examination of those evidences which have been traced by audit procedures.2. auditor assessment of the financial statement of the entity ANSWER: C 132. examination of books and audit of accounts done by the management. A. A. C.. Management refers to ______________. C.20/printqp. application of generally accepted accounting principles to particular phases or a financial statement. secretarial audit. ensuring systematic accounting. The most important objective of internal audit is ____________. C. D. A. Audit techniques are concerned with _____________.php?heading=III. The main purpose of an independent audit is to ___________. ANSWER: D 128. early detection of errors and fraud. D. B.

D. ANSWER: B 140.. C. A. _______ refers to such audit programme where plans for the auditor are not fixed. A. Conventional . D.16. A. ANSWER: C 134. ANSWER: D 139. A. B. Management. B. Special audit.COM A. B. Except in special cases the retiring auditor is automatically _________. C. An auditor can be held liable under CA act 1949 for _________.M[2013-2016]. dismissed. C. specific audit. suspended. B. he cannot find his own mistakes. ANSWER: D 138. Fixed audit. disqualified. it is prohibited by company law. 7/29/2015 10:12 AM . a person cannot audit his own account. __________ Audit is a comprehensive critical review of all aspects or processes of management. re-appointed. periodical audit. C. A. C. Accountancy work is done throughout the accounting period although auditing work is done ____________. he may give bias and subjective views. professional misconduct. ANSWER: C 135.B. D. Pre-determined audit. in the middle of accounting period. government audit. general audit. none of these. D. criminal officer. D. A.. breach of control. B. C. D.. B. B. Company. Computerized.20/printqp. A. after the end of accounting period. ANSWER: A 137.2. negligence.php?heading=III. An employee cannot be an auditor of the company because __________.21 of 23 http://172. Audit at the end of the year is known as ___________. ANSWER: D 136.

the concern is banned. C. The main object of audit of account of a joint stock company is __________. C.COM A.B.2. D. ANSWER: A 141. detection of frauds. should be a chartered accountant or a cost accountant.M[2013-2016]. ANSWER: D 142.16. A. A. should hold some other professional qualification. state government.22 of 23 http://172.. the internal check is weak. from the second month of accounting period. prevention of frauds. ANSWER: A 146. should be a chartered accountant. central government. helping audit in depth. Balance sheet audit is useful where _____. the existence of a good system of internal check reduces to a great extent. C. C. C. D. A. accounting.. after the end of one month. B. Internal check is meant for __________. detection and prevention of errors. A special auditor has to submit his report to the __________. 7/29/2015 10:12 AM . B. A. Test checking implies ________. selling. management B. inventory valuation. business. D. The internal auditor of a joint stock company _________.. ANSWER: D 144. D. B. ANSWER: A 147. C. D. need not possess the qualification laid down in the companies act. the concern is a small one. detection and prevention of frauds. detection and prevention of errors and frauds. Auditing means where ____ ends.php?heading=III. A. B. D. D. checking only a few items in detail. To find whether the financial statements are drawn up according to the companies act. none of these. B. A. ANSWER: A 145. A.20/printqp. the concern is a big one. C. ANSWER: A 143.

A. Permanent file. Precedence file. when all other directors are out of station. D. Convert file. In an audit of inventories. D. A file which contains rules governing the organisation under audit is known as _____. B. B. C. checking each and every item. all inventory owned by the clients is on hand at time of the count. C. one person can never constitute the quorum. ANSWER: A 150. an auditor would least likely verify that _________. A voucher is a document _________.php?heading=III. checking a part of books. Routine file. damaged goods and obsolete items have been properly accounted for. D. it is an extra-ordinary meeting C.M[2013-2016]. ANSWER: A 149. B.. ANSWER: B Staff Name Rajakumar. ANSWER: C 148. checking a representative sample of items.2.L. the financial statement presentation of inventories is appropriate..23 of 23 http://172. A. A. B. the client has used proper inventory pricing. D.16. 7/29/2015 10:12 AM . it support of an entry made in the books of accounts.COM A. C.20/printqp..B.