CGBLE MCQS

Chapter: AUDITOR

Question No: 1

The first auditor or auditors of a company shall be appointed by the board

____________of the date of incorporation of the company.

a. Within 15 days
b. Within 90 days
c. Within 120 days
d. Within 180 days

Question No: 2

The Commission/SECP may, of its own motion or on an application made to it by

the company or any of its members direct to appoint director if the company, fails
to appoint

a. The first auditors within a period of 90 days of the date of incorporation of the
company
b. If the appointed auditors are unwilling to act as auditors of the company
c. Auditor not appointed in AGM
d. Casual vacancy not filled by directors within 30 days
e. All are correct

Question No: 3

Any auditor appointed after fist auditor is known as

a. First auditor
b. Subsequent auditor
c. Statutory auditor
d. All are correct

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Question No: 4

If the auditors are appointed by the Commission, who fixed their remuneration

a. Commission
b. Board
c. Member
d. Chairperson

Question No: 5

In case of public listed co. or private co. having share capital not less than 10
million, which person can audit books?

a. Chartered Accountants
b. CMA
c. ACCA
d. Both CA AND CMA

Question No: 6

Auditors can be removed by using____________

a. Special resolution
b. Ordinary business
c. Special business
d. Ordinary resolution

Question No: 7

Any business other than five ordinary businesses are approved through

a. Special resolution
b. Ordinary business
c. Special business
d. Ordinary resolution

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Question No: 8

The following persons shall not be appointed as auditor of a company except

a. A body corporate
b. A person who is, or at any time during the preceding three years was, a director,
other officer or employee of the company
c. a person who is indebted to the company in the ordinary course of business of such
entities
d. a person who has given a guarantee or provided any security in connection with the
indebtedness of any third person to the company other than in the ordinary course of
business of such entities

Question No: 9

Which of the following is eligible to be appointed as auditor

a. a person who has been convicted by a court of an offence involving fraud and a
period of ten years has not elapsed from the date of such conviction
b. A body corporate
c. a person who is not eligible to act as auditor under the code of ethics as adopted by
the ICAP and ICMAP
d. a person who disinvest his investment within 90 days

Question No: 10

If company do any hinderance, obstructs or delays with auditor or provides false

or incorrect information, shall be liable to a penalty of __________

a. level 1
b. level 2
c. level 3
d. none of the above

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Question No: 11

A person not be considered indebted if he owes

a. less than 15 million

b. less than 20 million
c. less than 25 million
d. less than 10 million

Question No: 12

Inexperienced Akbar is a Chartered Accountant, he has purchased shares of company

XYZ, ABC company holds 10-15% share capital of company XYZ. Akbar wants to be
appointed as an auditor in company ABC, so he is eligible or not?

a. No, because he has purchased shares of XYZ co.

b. Yes, because he is not a shareholder of ABC co.
c. Yes, because XYZ co. is not an associate co
d. No, because Akbar is auditor an inexperienced auditor

ANSWERS
1. B
2. E
3. B
4. A
5. A
6. A
7. A
8. C
9. D
10. C
11. D
12. C

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