MSO Audit MCQ: Recovery Procedures in The Light of The Judgement

1.
MSO audit mcq
2. The Comptroller and Auditor General of India derives his authority and functions
mainly from the provisions of ________.
a) Articles 148 to 151 of the Constitution of India
b) Articles 147 to 150 of the Constitution of India
c) Articles 150to 154 of the Constitution of India
d) Articles 150 to 155 of the COnstitution of India
3. Accounts which relate to the expenditure brought to account during a financial
year, to the several items specified in the law made in accordance with the
provisions of the Constitution or of the Government of Union Territories Act,
1963 (20 of 1963) for the appropriation of moneys out of the Consolidated Fund
of India or of a State, or of a Union Territory having a Legislative Assembly, as
the case may be is called
a) Appropriation Accounts
b) Finance Accounts
c) Balance Sheet
d) Annual Financial Statement
4. In audit of revenue receipts, Audit has to examine the judicial decisions or
judgements with a view to:
a) check whether the judgement was sound and in the accordance with the
provisions of the respective acts
b) check whether the judgement was onsistent with the previous judgement
or judgement of a higher court
c) check whether the revenue authorities has submitted appeals to ensure
that no loss of revenue occurred due to erroneous judgements
d) check the effectiveness of the assessment procedures and
recovery procedures in the light of the judgement
5. Tax audits are primarily legality and regularity audit, when auditing the
application of tax laws, Audit should examine the system and efficiency of tax
collection. Which of the following statement would be appropriate in case of a tax
audit?
a) The Audit is empowered to audit the ollection of taxes as
extensively as possible and to examine individual tax files
b) The Audit is not empowered to audit the colletion of taxes extensively
c) The Audit is not empowered to examine individual tax files
d) The Audit is empowered to audit the collection of taxes but not
empowered to examine individual tax files
6. Which of the following procedure could be adopted, according to the MSO
(Audit) issued by CAG, while auditing the accounts of furniture in the residences
of high officials?
a) The high official can be asked to vacate the house during a specified day
during the audit period and the audit staff along with the department staff
could verify the furniture stock with actual stock.
b) The high official can be asked to certify to the effect that he uses the
furniture in the residence only for his official purpose and no furniture is
used for his personal purpose.
c) Audit may require, where necessary, the furnishing by the
executive authority nominated for the purpose of an annual
certificate of verification incorporating the details of
verification.
d) The furniture supplied to the residence of a high level officer need not be
audited.
7. Which of the following statements is NOT correct with regard to the submission
of utilisation certifiate for a grant?
a) Ministries and departments of the Central Government are not required to
furnish utilisation certificate
b) State Governments directly incurring expenditure out of Central grants are
also not required to furnish utilisation certificates
c) In respect of expenditure out of central grants incurred by the
state government through local bodies and co-operative
institutions , there is no need of furnishing the utilisation
certifiates
d) All of the above
8. In public works department, the position responsible for undertaking preliminary
check in works transaction is called:
a) PWD Auditor
b) Divisional Accountant
c) Subordinate Accountant
d) State Acountant
9. Conmtroller and Auditor General of India's Manual of Standing Order is issued
under:
a) Section 23 of the CAG's DPC Act
b) Section 24 of the CAG's DPC Act
c) Chapter 4 of the Manual of Office Procedure
d) Chapter 3 of the Manual of Office Procedure
10. Which of the following agency is entrusted with the responsibility of ensuring a
uniform policy of accounting and audit in the government sector as a whole in
India?
a) Institute of Chartered Accountants of India
b) The Comptroller and Auditor General of India
c) The Controller General of Accounts
d) The Ministry of Finance, Government of India
11. Which of the following entities can be treated as entities managing public
money? 1) Central Government 2) State government 3) Government
companies established under companies act 4) Government autonomous
bodies
a) 1 and 2
b) 1,2,3 and 4
c) 1 and 3
d) 1,2 and 4
12. An auditor and audit institution should maintain independence. This include
independence from: 1) The Legislature 2) The Audited Entity 3) The
Executive.
a) Only 2
b) Both 2 and 3
c) Only 3
d) 1,2 and 3
13. Which of the following are considered quality assurance activities?
1. Report to management on progress against budget
2. Report to management on progress against schedule
3. Supervision
4. Allocation of responsibilities
b) only 1, 3 and 4
c) only 1 and 4
d) only 3 and 4
e) all of the above
14. Selection of audit topics for performance audits should be determined on which
of the following stages of the audit?
a) pre-study
b) research and evaluation
c) main study
d) none of the above
2. Regulation on Audit & Accounts, 2007
1. The Regulation on Audit and Accounts was made by C&AG of India under the
powers conferred on him by _____________of C&AGs (DPC) Act, 1971.
a) Section 20
b) Section 21
c) Section 23
d) Section 24
2. The Regulation on Audit and Accounts’2007 do not apply to
a) Bodies/authorities and enterprises to which CAG’s audit/accounts
jurisdiction extend
b) All ministries and departments of Union Government and State
Governments
c) Union Territory Governments
d) Any international assignment relating to audit taken up or being
taken up by CAG
3. The Regulation on Audit and Accounts were made by C&AG of India in the year
a) 2005
b) 2007
c) 2008
d) 2009
4. Major irregularity means
a) an instance of suspected material fraud coming to the notice in audit
b) an instance of corruption coming to the notice in audit
c) an irregularity of serious nature involving public funds
d) All of the above

5. The Regulation of Audit & Accounts shall apply to
a) Officers and staff of IA&AD
b) All Ministries and Department of the Union /State/Union Territory
Governments
c) Bodies, Authorities and Enterprises to which the audit or accounts
jurisdiction of the C&AG of India extend
d) All of the above
6. C&AGs authority to inspect any office of accounts under the control of union is
derived from ______ of C&AGs (DPC)act.
a) Section 13
b) Section 14
c) Section 18
d) Section 19
7. Under sec 18 read with sec 2 (e) of DPC act the C&AG has the authority to
a) to inspect any office of accounts under the control of a Union Territory
having a legislative assembly
b) to require that any accounts , books, papers and other documents which
deal with or form the basis of or are otherwise relevant to the transactions
to which his duties in respect of audit extend, shall be sent to such place
as he may appoint his inspection and
c) to put such questions or make such observations as he may consider
necessary to the person in charge of the office and to call for such
information as he may require for the preparation of any account or report
which it is his duty to prepare
d) all of the above
8. Auditors should ordinarily not become members of management committees

a) True
b) False
9. The scope and extent of audit shall be determined by the C&AG of India under
which section of DPC Act?
a) Section 10
b) Section 13
c) Section 19A
d) Section 23
10. The C&AG of India is the sole authority to decide the scope and extent of audit to
be conducted by him or on behalf of him
a) True
b) False
11. The C&AG of India undertakes audit which are broadly categorised as
a) Financial audit, compliance audit and Performance audit
b) Civil audit, commercial audit, railway audit and P&T audit
c) Receipt audit, expenditure audit and grant audit
d) all of the above
12. The power to dispense with detailed audit of any accounts or transaction is
derived by C&AG of India under ____________ of DPC act.
a) Section 22
b) Section 23
c) Section 24
d) Section 25
13. Audit will be conducted
i) In the Audit Office
ii) In the office of the Auditable entity
iii) At the site where the relevant records for audit are available
iv) At such place as may be decided by audit.
a) (i) & (ii) above

b) (i) (ii) & (iii) above
c) (ii) (iii) & (iv) above
d) (i) to (iv) above
14. A request for the special Audit shall be given due consideration by C &AG or any
other Officer so authorised if the request for such audit of a programme , project
or organisation is made with the approval of the
a) Cabinet secretary
b) Secretary of the concerned department
c) Minister concerned
d) None
15. Auditing standards will apply to
(i) the individual auditor (ii) the audit department (iii) the auditee
organisation (iv) the head of the auditee organisation
a) (i) above
b) (i) (ii) above
c) (i) (ii) (iii) above

d) (i) (ii) and (iv) above
16. Auditing standards shall, interalia, include the following (i) basic postulates (ii)
general standards;(iii) field standards (iv)reporting standards
a) (i) above
b) (i) (ii) above
c) (i) (ii) (iii) above
d) (i) (ii) (iii)and (iv) above
17. Under the constitution of India, it is the duty of the C&AG of India to audit and
report on the accounts of the

a) Union Government
b) Governments of each State
c) Government of Union Territory having legislative assembly
d) all of the above
18. The C&AG of India examines both the appropriation accounts and finance
accounts of the Union, each State and each Union Territory having a legislative
assembly but certifies only the appropriation accounts.
a) True
b) False
19. Excess or savings are shown in (i) appropriation accounts (ii) finance accounts
a) (i) above
b) (ii) above
c) both (i) (ii) above
d) neither (i) or (ii) above
20. A consolidated statement of all orders of re-appropriation and surrender of funds
issued during a financial year shall be sent to the audit office and the accounts
office so as to reach within__________after the close of the financial year.
a) 15 days
b) one month
c) two months
d) three months
21. Reasons for any excess or shortfall in expenditure beyond the limits prescribed
for the purpose under any unit of appropriation shall be furnished by Government
departments to
(i) the audit office (ii) the accounts office
a) (i) above
b) (ii) above
c) both (i) (ii) above

d) neither (i) or (ii) above
22. C&AG is authorised to audit all expenditure from consolidated fund of India and
of a state and of a Union Territory having a legislative assembly under
__________ of DPC act.
a) Section 13
b) Section 14
c) Section 15
d) Section 16
23. Authority for C&AG to audit all transaction of the Union and of the State and
Union Territorys relating to contingency funds and Public accounts is derived

from ________ of DPC Act.
a) Section 2 (e)
b) Section 2 (e) r/w Section 13
c) Section 13
d) None of the above
24. C&AG is authorised to audit all receipts of the GOI and of Government of each
State and of each Union Territory having a legislative assembly under ________
of DPC Act.
a) Section 13
b) Section 14
c) Section 15
d) Section 16
25. C&AGs power to audit and report on the accounts of the stores and stock kept in
any office or department of the Union is derived from
a) Section 15
b) Section 16
c) Section 17
d) Section 18
26. C&AGs power to audit and report on the accounts of the stores and stock kept in
any office or department of the Union Territory having a legislative assembly is
derived from
a) Section 17
b) Section 17 r/w sec 2(e)
c) Section 19
d) Section 19 r/w sec 2(e)
27. The accounts of stores and stock shall be kept in the manner prescribed by C&AG
of India in consultation with the Union Government
a) True
b) False
28. Before commencing detailed work of performance audit, the AG(Audit) shall hold
an entry conference with:-
a) Chief Secretary to the Government
b) Governor
c) Secretary to the Government of the concerned Department
d) Additional Secretary to the Government of the concerned Department
29. Discussion at the entry conference shall, interalia, include
a) Scope and coverage of audit
b) Audit objectives and criteria
c) Proposed techniques of evidence collection
d) Overall time frame

e) Tentative time schedule
f) All of the above
30. The audit of bodies and authorities, other than Government establishments and
companies, by C&AG is governed by the provision contained in
a) Section 14, 15 & 20 of the DPC Act
b) Section 14,15,19(1),19(2) and 19(3) of the DPC Act
c) Section 14,15,19(2) and 19(3), 19 A and 20 of the DPC Act

d) Section 14,15,19(1),19(2) and 19(3), 20 of the DPC Act
31. The expression “Body” in the DPC Act includes
a) A co-operative society
b) A society
c) A club
d) A Non-Government Organisation
e) all of the above

32. The provision of section 18 of DPC Act do not apply to bodies and authorities that
are under the audit jurisdiction of the C&AG
a) True
b) False
33. Where a body of authority is audited under Section 14(1) or 14(2) for a particular
year, than C&AG is empowered to continue to audit that body or authority for a
further period of
a) one year
b) two years
c) three years
34. The result of audit under section 14 or 15 shall be communicated to the
(i) Chief executive officer of the body or authority
(ii)Department of the Government that paid the grant or loan to the body or
authority
a) (i) above only

b) both (i) and (ii) above
c) (ii) above only

35. Audit of a body or authority receiving loan or grant for a specific purpose from
the consolidated fund of India or of a State or of a Union Territory having a
legislative assembly is done under section ____ of DPC Act.
a) Section 14(1)
b) Section 14(2)
c) Section 15
d) Section 19
36. Every corporation that is subject to audit by C&AG shall send copies of agenda
notes and minutes of the meeting of its governing body to the
a) AG(Audit) concerned
b) AG(A&E) concerned
c) CAG of India
37. The scope of performance audit of a corporation may extend to more than one
financial year
a) True
b) False
38. The normal time limit for communicating reply to draft SAR by the CEO of the
corporation shall be
a) one week
b) two weeks
c) 15 days
d) one month
39. Audit arrears committee” shall be constituted by a corporation in case a large

number of audit observations included in the IRs remain outstanding for more
than
a) 6 months
b) one year
c) 2 years
d) 3 years
40. The formation of a new Government Company or a deemed Government

company shall be intimated with a copy of its certificate of incorporation to the
CAG in writing by the administrative ministry/department within ______ of its
incorporation.
a) 15 days
b) one month
c) 2 months
d) 90 days
41. Where a Government company or a deemed government company ceases to be
so, the fact shall be intimated to the CAG by the administrative
ministry/department within ______ of such occurrence.
a) 15 days
b) one month
c) 2 months
d) 90 days
42. The statutory auditor of a Government company or a deemed government
company shall be appointed by
a) Secretary to the Government of the concerned department
b) CEO of the company
c) CAG of India

43. The total period of appointment including the initial appointment of a statutory
auditor shall not ordinarily exceed
a) two financial years
b) three financial years
c) four financial years
d) five financial years
44. The time limit for the statutory auditor to send acceptance of the audit
assignment in writing to the CAG of India shall be
a) two weeks
b) three weeks
c) four weeks
45. The CAG of India may terminate the appointment of a statutory auditor before
the expiry of the normal tenure for reasonable grounds without giving him an
opportunity to make representation against the premature termination
a) True
b) False
46. The CAG shall conduct a supplementary or test audit of the accounts of a
Government company which was already audited by a statutory auditor
a) True
b) False
47. On completion of the audit of a Government Company, the statutory auditor shall
prepare his audit report under the companies Act 1956, and a submit a copy to
a) the C&AG of India
b) AG (Audit) concerned
c) AG (A&E) concerned

48. The C&AG may, at his discretion, dispense with supplementary audit of the
accounts of the company for any particular year
a) True
b) False
49. the Audit Board shall function in an advisory and recommendatory capacity
a) True
b) False
50. The quorum for a meeting of the Audit Board shall be
a) Two
b) Three
c) Four
d) There shall be no requirement of quorum for the meetings of the
Audit Board
51. Reply to an audit note or IR shall be sent within ________ of its receipt
a) 15 days
b) Two weeks
c) Four weeks
d) Six weeks
52. In the case of an IR relating to PWD, the reply shall be sent through the
a) HOD
b) Next higher authority
c) Secretary to Government
d) Chief Engineer
53. Copies of important audit observations included in an audit note or an IR shall be
sent to the
a) HOD
b) Next higher authority
c) Secretary to Government
54. The Secretary in turn shall inform to AG (Audit) of the action taken within a
period of
a) 1 month
b) 2 months
c) 3 months
55. Time allowed for communicating the comments, observations and explanation of
the Government for the DP shall be
a) Two weeks
b) Three weeks
c) Four weeks
d) Six weeks
56. The duties and powers of C&AG in regard to the accounts of the Union & State
Governments are laid down under (i) Article 149 of
Constitution (ii) Article 150 of Constitution (iii) Article 151 of
Constitution (iv) Section 10 to 12 of DPC Act 1971
a) (i) & (iv) above
b) (i), (ii) & (iv) above

c) (i), (iii) & (iv) above
d) (i), (ii), (iii) & (iv) above
57. The authority for C&AG to lay down general principles of Government accounting
is derived from
a) Article 150 of the Constitution
b) Section 10 of DPC Act
c) Section 11 of DPC Act

d) Section 23 of DPC Act
58. All Government departments are required to comply with the general principles
of Government Accounting
a) TRUE
b) FALSE
59. The regulation on Audit of Accounts shall apply to any international assignment
relating to audit or accounts taken up by C&AG.

a) TRUE
b) FALSE
3. Auditing Standards issued by the CAG of India

1. All officers and staff of the Department are expected to abide by these
Auditing Standards and apply them conscientiously in auditing for

achieving the mission of promoting _____.
a) accountability
b) transparency
c) good governance
d) all of the above
2. The CAG’s Auditing Standard constitute the framework which set out
the professional standards for _______.
a) the organization
b) its personnel – the individual auditors
c) both
d) none
3. Which of the following statements is not correct?
a) These standards establish the norms which are applicable to all

public sector audit engagements, irrespective of their form or
context.
b) These standards incorporate the Prerequisites for the functioning
of Supreme Audit Institutions and Fundamental Auditing
Principles of the International Standards of Supreme Audit
Institutions, which have been suitably adapted with due
consideration of the audit mandate and rules applicable to SAI

India.
c) These standards determine the audit procedures that shall be
applied in audit and constitute the criteria or benchmark against
which the quality of audit results is evaluated.
4. Duties and powers of CAG in relation to the accounts of the Union and
the States etc. are envisaged in Article _______.
Reports of the CAG in relation to accounts of Union, State etc. are

envisaged in Article _____.
Net proceeds of any tax or duty shall be ascertained and certified by
CAG as per Article _____.
a) 149;151;279
b) 151;149;279
c) 151:279:149
d) 279;151;149
5. The _______ Schedule of the Constitution of India envisages audit of
accounts of District and Regional Councils of autonomous regions.
a) fourth
b) fifth
c) sixth
d) seventh
6. The general provisions relating to audit are elaborated in Sections
_____and ____ of the DPC Act.
a) 10 to 20 and 23
b) 13 to 21 and 24
c) 14 to 23 and 27
d) 15 to 24 and 28
7. To fulfill its mandate, SAI India undertakes
a) financial audit
b) compliance audit
c) performance audit
d) combination of such audits
e) all of the above
8. The pre-requisites constitute the principles that are essential for
______.
a) the functioning of SAI, India
b) proper practice of public sector auditing within the SAI.
c) both
d) none
9. The pre-requisites for functioning SAI, India includes ______.
a) Independence
b) Accountability and Transparency
c) Ethics
d) Quality Assurance
e) All of the above

10. An adequate degree of independence from _____ branch of the
Government is essential for the conduct of audit and for the credibility
of its results.
a) Legislative
b) Executive
c) both
d) none
11. While conforming to the Constitutional provisions and laws enacted by
the legislatures, SAI India has the functional and organizational
autonomy required for carrying out its mandate and is free from
direction or interference from the Legislature or the Executive in the:
a) selection of audit issues
b) Planning, programing, conduct, reporting and follow up of audits
c) organization and management of its office.
d) all of the above
12. The DPC Act empowers SAI India to inspect any office of accounts
under the control of the Executive and to require the production of all
necessary documents and information necessary for the proper
discharge of its statutory responsibilities.
a) true
b) false
13. _________ refers to the legal and reporting framework, organizational
structure, strategy, procedures and actions to ensure that the SAI
meets its legal obligations with regard to its audit mandate and
reporting and that the SAI and its personnel can be held responsible
for their actions
a) Accountability
b) Transparency
c) Ethics
d) Independence
14. _________ refers to the SAI’s timely, reliable, clear and relevant
public reporting on its status, mandate, strategy, activities and
performance as also of the audit findings, conclusions and public
access to information about the SAI.

a) Accountability
b) Transparency
c) Ethics
d) Independence
15. The ________ of SAI India shall be in public domain.
a) mandate
b) mission
c) responsibilities
d) all of the above
16. While conducting its audits, SAI India shall communicate the criteria
on which opinions would be based to the auditable entities and keep
them informed about the ___________ as part of the reporting
process.
a) audit objectives
b) methodology and findings
c) the scope of audits undertaken
d) all of the above
17. Public sector auditing can be described as a systematic process of
objectively obtaining and evaluating evidence to determine whether
information or actual conditions conform to established criteria.

a) true
b) false
18. Public sector auditing is essential in that it provides legislature and
oversight bodies, those charged with governance and the general
public with
a) information
b) independent and objective assessments concerning the

stewardship
c) performance of public sector policies, programmes or operation
d) all of the above
19. Public sector auditing contributes to good governance by:
a) providing the intended users with independent, objective and
reliable information, conclusions or opinions based on sufficient
and appropriate evidence relating to public sector entities
b) enhancing accountability and transparency, encouraging
continuous improvement and sustained confidence in the
appropriate use of public funds and assets and the performance
of public administration
c) reinforcing the effectiveness of those bodies that exercise

general monitoring and corrective functions over public sector
and those responsible for the management of publicly funded
activities
d) creating incentives for change by providing knowledge,
comprehensive analysis and well-founded recommendations for
improvement.
e) all of the above

20. Public sector refers to the sector that is controlled by __________.
a) Central Government
b) State Government
c) Local Government
d) all of the above
21. _______ focuses on determining whether an entity’s financial
information is presented in accordance with the applicable financial

reporting and regulatory framework. This is accomplished by obtaining
sufficient and appropriate audit evidence to enable the auditor to
express an opinion as to whether the financial information is free from
material misstatement due to fraud or error.
a) Financial audit
b) Compliance audit
c) Performance audit
d) all of the above
22. __________focuses on whether a particular subject matter is in
compliance with the criteria. It is performed by assessing
whether activities, financial transactions and information are, in all
material aspects, in compliance with the applicable authorities which
include the Constitution, Acts, Laws, rules and regulations, budgetary

resolutions, policy, contracts, agreements, established codes,
sanctions, supply orders, agreed terms or the general principles
governing sound public sector financial management and the conduct
of public officials.
a) Financial audit
b) Compliance audit
d) all of the above
23. _________ focuses on whether interventions, programmes and

institutions are performing in accordance with the principles of
economy, efficiency and effectiveness and whether there is room for
improvement. Performance is examined against suitable criteria and
the causes of deviations from those criteria or other problems are
analyzed. The aim is to answer key audit questions and to provide

recommendations for improvement.
a) Financial audit
b) Compliance audit
d) all of the above
24. The basic elements of Public sector audit are……
a) The three parties the auditor, the responsible party and intended
users
b) Subject matter, criteria and subject matter information
c) Types of engagement
d) all of the above
25. Public sector audits involve at least which of the following parties:
a) The auditor,
b) The responsible party and
c) Intended users.
d) All the above
26. In Public Sector audit _____ would be the responsible parties.
a) the auditable entities
b) those charged with the governance of the auditable entities
c) both
d) none
27. __________ are the individuals, organizations or classes thereof for

whom the auditor prepares the audit report.
a) The responsible parties
b) The intended users
c) both
d) none
28. The Intended users may include
a) Individuals, organizations or classes thereof for whom the
auditor prepares the audit report.
b) Legislative or oversight bodies, those charged with governance
or the general public.
c) The Parliament or the Legislature which represents the citizens
by determining the priorities of public finance, purpose and
content of public spending and income
d) All the above
29. ______ refers to the information, condition or activity that is
measured or evaluated against certain criteria. It can take many forms
and have different characteristics depending on the audit objective.
a) Subject matter
b) Criteria
c) Subject matter information
30. An appropriate subject matter is/are
a) identifiable and
b) capable of consistent evaluation or measurement against the
criteria,
c) such that it can be subjected to procedures for gathering
sufficient and appropriate audit evidence to support the audit

opinion or conclusion
d) all the above
31. _________are the benchmarks used to evaluate the subject matter.
a) Criteria
b) Subject Matter Information

c) Indicators
32. __________refers to the outcome of evaluating or measuring the
subject matter against the criteria. It can take many forms and have
different characteristics depending on the audit objective and audit
scope.
a) Criteria
b) Subject matter
c) Subject Matter Information
33. In __________ engagements, the responsible party measures the
subject matter against the criteria and presents the subject matter
information, on which the auditor then gathers sufficient and
appropriate audit evidence to provide a reasonable basis for
expressing a conclusion.
a) attestation
b) direct reporting
c) both
d) none
34. In ________engagements, it is the auditor who measures or evaluates
the subject matter against the criteria

a) attestation
b) direct reporting
c) both
d) none
35. _____________ are always attestation engagements, as they are

based on financial information presented by the responsible party.
a) financial audit
b) performance audit
c) compliance audit
d) all of the above
36. ________audit is generally direct reporting engagement.
a) financial audit
b) performance audit
c) compliance audit
d) only ‘b’ and ‘c’
37. Most of the audit evidence obtained by the auditor will be persuasive
rather than conclusive.
a) true
b) false
38. In reasonable assurance the audit conclusion is expressed ______
either explicitly or in other forms conveying the necessary degree of
confidence.
a) negatively
b) neutrally
c) positively
d) none
39. A limited assurance conveys the limited nature of the assurance

provided and the audit conclusion is expressed in a ______ manner
stating that based on the procedures performed, nothing has come to
the auditor’s attention to cause the auditor to believe that the subject
matter is not in compliance with the applicable criteria.
a) positive
b) neutral
c) negative
d) none
40. The principles to be observed by all individual auditors are categorized
into _____ distinct groups.
a) two
b) three
c) four
d) five
41. _________ relate to the basic audit concepts, which shall be
considered by auditors prior to commencement and at more than one
point during the audit process.
a) General principles
b) Principles related to the audit process
c) both
d) none
42. Auditors shall maintain appropriate professional behaviour by applying
_____ throughout the audit
a) professional scepticism
b) professional judgment
c) due care
d) all of the above

43. ___________ refers to maintaining professional distance, an alert and
questioning attitude when assessing the sufficiency and
appropriateness of evidence obtained throughout the audit. It also
entails remaining open-minded and receptive to all views and
arguments.
c) due care
d) all of the above
44. _________ implies the application of collective knowledge, skills and
experience to the audit process.
c) due care
d) all of the above
45. ___________ denotes that auditors shall plan and conduct audits in a
diligent(careful) manner. Auditors shall avoid any conduct that might

discredit their work.
c) due care
d) all of the above
46. Quality control procedures shall cover matters such as __________.
a) the direction, review and supervision of the audit process

b) the need for consultation in order to reach decisions on difficult
or contentious matter
c) both
d) none
47. SAI, India has the sole responsibility for any audit opinion or report it
might produce on the subject matter and that responsibility is not
reduced by its use of work done by other parties.

a) true
b) false
48. Which of the following statements is not correct?
a) The audit risk is the risk that the audit report may be
inappropriate.
b) The auditor performs procedures to reduce or manage the risk of
reaching inappropriate conclusions, recognising that the
limitations inherent to all audits mean that an audit can never
provide absolute certainty of the condition of the subject matter.
c) When the objective is to provide reasonable assurance, the
auditor shall reduce audit risk to an acceptably low level given
the circumstances of the audit.
d) The audit may also aim to provide limited assurance, in which

case the acceptable risk that criteria are not complied with is
greater than in a reasonable assurance audit.
e) none of the above
49. Materiality is not relevant in all audits.
a) true
b) false
50. A matter can be judged material if knowledge of it would be likely to

influence the decisions of the intended users.
a) true
b) false
51. Materiality is often considered in terms of value, but it also has
________.
a) quantitative aspects
b) qualitative aspects
c) both
d) none
52. A matter may be material because of the context in which it occurs.
a) true
b) false
53. Materiality shall be considered for the purpose of _______ though the
materiality levels could differ for each of the processes.
a) planning
b) evaluating the evidence obtained
c) reporting
d) all of the above
54. Materiality considerations may include _________.
a) stakeholder concerns
b) public interest
c) regulatory requirements and consequences for society
d) all of the above
55. Auditors shall prepare audit documentation that is sufficiently detailed
to provide
a) a clear understanding of the work performed
b) evidence obtained
c) conclusions reached
d) all of the above

56. According to the auditing standards the materiality is NOT decided by
a) The value of the transaction
b) The nature of the item of transaction
c) The context in which the transaction occurs
d) The year in which the transaction is made

57. Adequate documentation is important to
a) confirm and support the auditor’s opinion and reports
b) serve as evidence of the auditor’s compliance with auditing
standards
c) provide evidence of work done for future reference
d) All of the above
58. Audit documentation shall include an________.
a) audit strategy
b) audit plan
c) both
d) only ‘a’
59. It is not essential that the entity being audited be kept informed of all
matters relating to the audit.

a) true
b) false
60. In case of an entrusted audit, there is a need for arriving at an
agreement on the terms of audit with the auditable entity.
a) true
b) false
61. Under audit planning, important information like _______ shall be

firmed up before audit is carried out.
a) the subject, scope and objectives of audit

b) access to data
c) the audit process
d) roles and responsibilities of different parties to the engagement
e) all of the above
62. The nature of the risks identified will not vary according to the audit
objectives.
a) true
b) false
63. In a problem analysis the auditor shall consider ______.
a) actual indications of problems
b) deviations from what should be or is expected
c) both
d) none
64. To facilitate the process of risk assessment or problem analysis data
from multiple sources may be collated and combined to gain insights
and discern patterns.
a) true
b) false
65. The primary responsibility for the prevention and detection of fraud
rests with _______.
a) the entity’s management
b) those charged with governance
c) audit team
d) both ‘a’ and ‘b’
66. ________means limiting opportunities for fraud to take place.

a) fraud prevention
b) fraud deterrence
c) fraud limiting
67. ___________ means dissuading(discouraging) individuals from
committing fraud because of the likelihood of detection.
a) fraud prevention
b) fraud dissuading
c) fraud deterrence
d) none
68. Planning for a specific audit includes _________.
a) strategic aspects
b) operational aspects
c) both
d) none
69. Strategically, audit planning shall define _________.
a) the audit scope
b) the audit objectives
c) the audit approach
d) all of the above

70. The __________ refer to what the audit is intended to accomplish.
a) scope
b) objective
c) approach
71. The ______ relates to the subject matter and the criteria which the
auditors will use to assess and report on the subject matter and is
directly related to the objectives.
a) scope
b) objective
c) approach
d) criteria
72. The _________ will describe the nature and extent of the procedures
to be used for gathering audit evidence.

a) approach
b) scope
c) objective
d) evidence
73. Which of the following statement is not correct?
a) Operationally, planning entails setting a timetable for audit and
defining the nature, timing and extent of the audit procedures.
b) During planning, auditors shall assign the members of their team
as appropriate and identify other resources that may be
required, such as subject experts.
c) Audit planning shall be responsive to significant changes in
circumstances and conditions.
d) Audit planning is not an iterative process that takes place

throughout the audit.
74. Under audit planning the choice of procedures will depend on the risk
assessment or problem analysis.
a) true
b) false
75. Audit evidence is any information used by the auditor to determine
whether the subject matter complies with the applicable criteria.

a) true
b) false
76. Methods of obtaining audit evidence can include _______.
a) inspection and observation
b) inquiry and confirmation
c) recalculation and re-performance
d) analytical procedures and other research techniques.

e) all of the above
77. Evidence shall be both sufficient (quantity) to persuade a
knowledgeable person that the findings are reasonable, and
appropriate (quality) – i.e. relevant, valid and reliable
a) true
b) false
78. The quantity of evidence required depends on
a) the risk of material misstatement or non-compliance of the
subject matter information (the greater the risk, the more
evidence is likely to be required)
b) the quality of such evidence (the higher the quality, the less may
be required).
c) both
d) none
79. The reliability of evidence is not influenced by its source and nature.
a) true
b) false
80.Evidence is more reliable when it is obtained from sources external to
the responsible party.
a) true
b) false
81. Evidence that is generated internally is not reliable when the related
controls are effective.
a) true
b) false
82. Evidence obtained directly by the auditor (for example, through
observation of the application of a control) is more reliable than

evidence obtained indirectly or by inference (for example, through
inquiry into the application of a control).
a) true
b) false
83. Evidence is more reliable when it exists in documentary form, whether
paper, electronic, or other media (for example, a simultaneous written
record of a meeting is more reliable than a subsequent oral report of
what was discussed).
a) true
b) false
a) After completing the audit procedures, the auditor will review the
audit documentation in order to determine whether the subject
matter has been sufficiently and appropriately audited.
b) Before drawing conclusions, the auditor reconsiders the initial
assessment of risk and materiality in the light of the evidence
collected and determines whether additional audit procedures
need to be performed.
c) The auditor shall evaluate the audit evidence with a view to

obtaining audit findings.
d) When evaluating the audit evidence and assessing materiality of

findings the auditor shall take both quantitative and qualitative
factors into consideration.
e) Based on the findings, the auditor shall exercise professional
judgement to reach a conclusion on the subject matter or
subject matter information.

f) none of the above
85. The audit process involves preparing a report to communicate the
results of the audit to _______.
a) stakeholders
b) others responsible for governance
c) the general public
d) all of the above
86. Which of the following statement is correct?
a) Audit reports shall be easy to understand, free from vagueness
or ambiguity and complete.
b) Audit reports shall be objective and fair, only including
information which is supported by sufficient and appropriate
audit evidence and ensuring that findings are put into

perspective and context.
c) The form and content of a report will depend on the nature of
the audit, the intended users, the applicable standards and legal
requirements. The reports can appear in short form or long form.
d) All of the above
87. Long-form reports generally describe in detail _______ including
potential consequences and constructive recommendations to enable

remedial action.
a) the audit scope

b) audit findings
c) audit conclusion
d) all of the above
88.In an attestation engagement the report is generally referred to as the
Auditor’s Report.
a) true
b) false
89. A modified opinion or conclusion may be_____ (except for) – where
the auditor disagrees with, or is unable to obtain sufficient and
appropriate audit evidence about certain items in the subject matter
which are, or could be, material but not pervasive.
a) qualified
b) adverse
c) disclaimed
d) none
90. A modified opinion or conclusion may be _____ where the auditor,
having obtained sufficient and appropriate audit evidence, concludes

that deviations or misstatements, whether individually or in the
aggregate, are both material and pervasive.
a) qualified
b) disclaimed
c) adverse
d) none
4. Performance Auditing Guidelines 2014
1. Performance Audit Guidelines 2014 supersedes the Performance Audit
Guidelines 2004 and will come into force from June 2014.
a) True
b) False
2. The performance Audit Guidelines are based on
a) Existing guidelines of C&AG of India

b) ISSAI guidelines 100,300 and 3000
c) ASOSAI Performance Auditing Guidelines
d) All the above
3. Which among the following is not to be questioned in performance audit?
a) the objectives of the policy being met by means employed, outputs
provided and impacts observed
b) the means employed and the results achieved consistent with the
objectives of the policy
c) policy per se
4. If you were to examine the efficiency aspects in a hospital, what would you
address?
a) costs of resource procurement.
b) average cost per patient admitted.
c) achievement of goals in number of surgeries.
5. Match the following w.r.t. the nature of question to be asked
(A)Are the means employed for policy implemen

(A)Effectiveness audit
with the sent objectives?
(B) Evaluation of the consistency of the programme (B)Are the observed results due to the policy, or a
with the policy causes?
(C)Evaluation of the impact of the policy (C)Are the results consistentent with the objective
(D)Evaluation of the effectiveness of the policy and
(D)What is the economic and social impact of the
analysis of casuality
a) A-C;B-D;C-B;D-A
b) A-B;B-A;C-D;D-C
c) A-C;B-A;C-D;D-B
d) A-D;B-C;C-B;D-A
6. Which of the following statement is TRUE with reference to Performance
Auditing and Programme Evaluation?
a) Performance auditing shares similar approaches and
methodologies with programme evaluation but does not
generally extend to assessing policy effectiveness or policy
alternatives
b) Auditors cannot employ tools of programme evaluation in performance
auditing as programme evaluation techniques are mainly statistical based
c) Programme Evaluation techniques cannot be employed in performance
auditing as it requires special skills and knowledge
d) Performance auditing and programme evaluation have the same scope and
both uses the same tools and techniques

7. Which of the following is NOT likely to be major consideration for selecting
individual performance audit topics?
a) Significance of the topic
b) Materiality of the topic
c) Visibility of the topic
d) Available manpower inhouse
8. Find out the incorrect statement

a) It is not always necessary to conduct performance audits of the entity or
the programme as a whole
b) The subjects of performance audit may be selected cutting across various
departments or entities
c) AG should be alive to people centric cutting edge issues but not
to take non-financial subjects

9. A field unit of SAI decides to conduct performance audit on a topic 'prevention of
adultration of food and beverages'. The total expenditure on the activity during
the five year period was a mere 5 lakh rupees. SAI field office decides to conduct a
performance audit deploying three performance audit parties. Whether selection
of such a topic is justifiable in terms of with reference to the conditions imposed
by the performance audit guidelines on selection of performance audit topic?
a) No. According to the performance audit guidelines, care should be taken
while selecting performance audit topics and audit resources should be
engaged in high material value transactions
b) Yes. According to the performance audit guidelines only topics where no
money value is involved should be selected
c) Yes. According to performance audit guidelines, while selecting

people centric topics, the criteria to be applied for selection is
not just financial materiality.
d) No. According to the performance audit guidelines, SAI should not be
sentimental in dealing with selection of topics. SAI's audit resources
should be deployed without being sensitive to the issue of the people
10. One of the considerations while undertaking risk assessment for prioritizing the
subjects identified for performance auditing is past coverage. Which of the

following is NOT true with reference to the coverage?
a) Coverage refers not only to previous SAI coverage but also to other
independent reviews of the activity. Such reviews may have been
conducted by internal audit, external consultants or government
committees or the activity could have been subject to programme
evaluation
b) As a general rule, a low ranking would occur when there has been a
substantial review of the activity within the past two years.
c) Even though the topic was covered by independent reviews extensively in
the past two years, a higher ranking would be warranted where the audit
has been requested by the legislature or by the government and the
previous performance audit indicated that such a follow-up should occur
d) Coverage refers only to previous SAI coverage other
independent reviews of the activity are not relevant to SAI
performance Audit
11. In analyzing risks which of the following question should be addressed w.r.t. PA
a) what can go wrong?
b) what is the probability of it going wrong?
c) what are the consequences?
d) All of the above

12. Which among the following is correct as to prioritization of the selected subject
a) The thumb rule for prioritization is to be guided by the
materiality multiplied by risk parameters
b) The existence, intensity and impact of risks need not be considered in
tandem
c) where the available resources place a constraint outsourcing in part or full
including core audit functions may be done

13. Match the following w.r.to the characteristics of good criteria
(A)Reliable criteria (A)are clearly stated and are not subject to significantly different interpretatio
(B) Objective criteria (B)results in findings and conclusions that meet user’s information need
(C)Useful criteria (C)are free from any bias of the auditor or management
(D)understandable criteria (D)result in consistent conclusions, when used for assessment in the same cir
a) A-D;B-C;C-B;D-A
b) A-D;B-A;C-B;D-C
c) A-C;B-D;C-A;D-B
d) A-C;B-A;C-D;D-B
14. Which among the following is incorrect as to the criteria
a) The higher the degree of acceptance of the criteria, the more effective
would be the PA
b) The audit should note the shift in the role of Governments from
a ‘facilitator and regulator’ to ‘provider of services’
c) The audit should take into account the shift from a ‘Government-
Centred’to a ‘people-oriented’approach
15. In instances where an audit body disagrees with the audit criteria then the SAI
should:
a) convene a meeting with the head of the audited body and get him/her to
agree on the audit criteria
b) amend the criteria to suit the requirements of the audited body.
c) weigh the facts and arguments presented by the audited body
against other relevant facts and arguments.

16. Suitable criteria should be identified to enable the performance auditors to assess
the activities subject to audit and to achieve the audit objectives. Which of the
following is NOT a characteristic of good criteria?
a) Reliability
b) Objectivity
c) Usefulness
d) Complexity
17. The recommendations suggested to ready the deficiencies may be acceptable
when
a) the audit objectives have been communicated to the entity
b) the audit criteria accepted by the entity and no disagreement exists on
audit findings
c) the audit findings are supported by competent relevant and reasonable
evidence
d) All of the above
18. Considerations that determine the strength of evidence is
a) If the observation is highly significant and material, it will
require stronger evidence to sustain
b) The strength of evidence should be very high when the degree of risk
associated with wrong conclusion is low

c) Evidence needs to be more convincing, if the issue is noncontroversial or
insensitive
19. An expert is a person or firm possessing special skill, knowledge and experience
in a particular field other than auditing. Performance auditing may use the
services of experts. Which of the following statement is CORRECT with reference
to the procurement of the services of the expert or using the work of the experts
from time to time?
a. When using the work performed by an expert, sufficient and
appropriate audit evidence should be obtained to ensure that such
work is adequate for the purposes of the audit.
b. Because of the diverse range of activities/subjects to performance
auditing, Accountant General may need to obtain audit evidence in
the form of reports, opinions, valuations and statements of an

expert.
c. When the performance auditor uses the work of an expert as audit
evidence, the responsibility for the conclusions in the audit report
lies with the expert
b) a, b, c
c) a, b
d) a, c
e) c only
20. Which of the following statement is INCORRECT with reference to the area and
scope of performance auditing?
a) It is always necessary to conduct performance audits of the
entity or the programme as a whole by engaging sufficient
manpower.
b) The scope and audit objectives of a performance auditing can be confined
only to significant aspects of the programmes or activities.
c) Where desirable, the subjects of performance audit may be selected
cutting across various departments or entities
d) The selection of the components or parts of the programme may be guided
by the materiality and risk profiles of each part or component
21. What does the word 'reasonable assurance' signify with reference to performance
auditing?
a. Reasonable assurance relates to the accumulation of audit evidence
necessary for the auditor to conclude whether there are any
material misstatements in the information relating to performance
b. What is ‘reasonable’ is dependent on the facts of that situation and
is to be determined by what evidence could reasonably be expected
to be gathered and what conclusions could reasonably be expected

to be drawn in the particular situation.
c. A performance audit conducted in accordance with applicable
auditing standards provides reasonable assurance as to whether the
information relating to performance is free from material
misstatement
d. Performance Audit does not embrace the concept of providing any
reasonable assurance because the concept of reasonable assurance
is with reference to the ‘true and fair’ view of the financial
statements.
b) a, b, c, d
c) a, b, c
d) b,c,a
e) only d
22. Which among the following factor that affect the evidence
a) samples selected are representative
b) incomplete evidence and does not establish a cause and effect
relationship
c) unbiased evidence
d) Evidence that is not conflicting
23. The important characteristic of sound evidence is

a) it should be logical and self-sustaining
b) it should support the audit observations
c) provides basis of arguments against the best possible counter argument
d) All of the above
24. A performance audit report is said to be balanced
a) if the report adds value to the entity
b) if the report is ensured through fair conclusions and balanced content and
tone
c) if good performance should also be reported
25. The strategic plan for performance audits, in pursuance of the strategic goals and
objectives, prepared by each Accountant General will be approved by SAI top
management. The strategic plan document forwarded to the SAI Headquarters
should be self-contained. Which of the following is LEAST likely to be part of the
strategic plan document?
a) Strategic goals and strategic objectives set for the office/ SAI to be attained
through performance audits over the perspective plan period
b) Risk assessment of all programmes or activities of the entity's operations
that are within the audit jurisdiction of the Accountant General
c) Executive summary containing a gist of the strategic plan including

categorisation of the types of subjects selected for performance audit
viz:financial, non-financial, public interest and governance related
subjects, recent policy shift issues, concurrent and prescience subjects
d) A tentative programme of entity field offices to be visited
including the details of the personnel who were proposed to be
deployed for the performance audit.
26. Quality control and management system in the context of performance audit
consist of
a) evaluating the intended outcome of the performance audit
b) strategic/perspective/operational planning
c) post audit quality review on selective basis by SAI top management
d) All of the above
27. In vetting the action taken notes’ the audit has to concentrate on
a) substantive action on the recommendations

b) the form of the report
c) the action taken report be accepted only on verification
28. Which of the following is MOST likely to be the time frame covered by a strategic
plan document?
a) One year
b) Six months
c) One quarter
d) Five years
29. The most important measure of quality of a performance audit would be:
a) The extent of positive impact on the policies and programmes of
the government through performance audit
b) The number of pages of the report turned down by the performance audit
team
c) The number of recommendations made in the report based on the audit
evidence
d) The extent of audit analysis and auditing techniques used in the conduct of
performance auditing
30. Which of the following is generally considered as the last stage in a performance
audit life cycle?

a) Finalizing the audit observations
b) Submission of an audit report incorporating the findings
c) Follow-up procedures on audit recommendations
d) Planning for next performance audit
31. Which of the following statement signify the difference between the term
'performance audit process documentation' and 'performance audit
documentation'?
a) Performance audit process documentation is the
documentation of the performance audit management whereas
performance audit documentation refers to the working papers
for performance audit in support of audit findings, conclusions
and recommendations.
b) Performance Audit documentation is the documentation of the
performance audit management and performance audit process
documentation is the documentation of the working papers
c) Both A and B
d) None of these
32. An independent assessment or examination of the extent to which an entity,
programme or organisation operates efficiently and effectively, with due regard
to economy is called:
a) Independent Auditing
b) Entity auditing
c) Performance Auditing
d) Financial Auditing
33. Which of the following is CORRECT with reference to the Performance Audit
Annual Plan?
a) Performance Audit Annual operational Plan prepared for a financial year

b) The time schedule for completion of all stages of a selected performance
Audit subject can spread over more than one financial year
c) None of the above
d) Both 1 and 2
34. Which of the following statement is INCORRECT with respect to strategic
planning of SAI?
a) All SAI field offices may carry out in-depth exercise for performance audit
strategic planning.
b)
c) After setting the strategic goals and objectives, the data on entity
contained in budget papers, programme papers, plan documents, annual
reports, parliamentary debates and reports, media concerns, research and
reports of international agencies, follow-up and leads from the past audits,
etc. should be analysed on the parameters of risk, materiality, significance,
visibility, coverage, etc. to select subjects for performance audits to be
carried out over the strategic plan period.
d) SAI top management may conduct brain storming meetings with
Accountants General from time to time in respect of audit strategic and
annual operational plan and risk assessment to select the subject which
addresses the SAI's concerns for high risk programmes and activities.
e) The strategic planning is normally done for a period of five
years and after approval by the SAI top management, it becomes
a static document. No deviations from the plan are permissible
until a review is taken up after five years as a rollover exercise.
35. Which of the following is NOT correct regarding the strategic plan document in
the context of performance auditing?
a) Strategic planning is the process of determining the long-term goals of

performance auditing and the best approach for attaining them.
b) The strategic planning document define the long-term mission statement
consisting of goals to be achieved through the performance audits,
statements of detailed objectives expected to be accomplished through
performance audits and the subjects of performance audits to be carried
out in pursuance of the strategic goals and objectives
c) Strategic planning for performance auditing and overall

strategic planning of SAI are one and the same
d) All of the above
36. Which of the following is not a type of programme evaluation techniques
commonly used in performance auditing?
a) Process evaluation
b) Outcome evaluation
c) Impact evaluation
d) Policy Evaluation
37. The audit team would like to verify the quality of the 'Patients Management
System' bought by the Hospital last year. What would be an appropriate method
that the team can use to best allow for gathering of audit data in an efficient and
effective manner?
a) Physical observation of patients and interview with doctors

b) Physical observation and documentary review of payments to the supplier
c) Documentary review, statistical sampling of equipment and interview with
patients
d) Survey with the system users and review of complaints made to
the hospital IT unit
38. Find out the incorrect statement w.r.to quality assurance in PA
a) Quality assurance is process-centric

b) Quality assurance is for the entire life cycle of the performance audit
c) Quality assurance is applied after the work is completed
d) Quality assurance concerns all steps and techniques that PA auditors must
follow to assure quality audit
39. Which among the following is incorrect statement w.r.to quality control
a) quality control system attempts to make sure that results of PA are what
was expected
b) quality control measures apply to individual stages or products
c) quality control is process centric
d) quality control is applied after the work is completed
40. Which among the following is a fundamental principle of Performance Audit
a) performance audit should not include sunrise issues in the light of policy
issues
b) performance audit can be carried out posteriori or concurrently
c) Cutting edge issues that form the core of governance is outside the scope
of performance audit
41. It is important to identify and analyse the risks associated with the entities under
audit jurisdiction. In the context of performance audit which of the following

statement about risk would be appropriate?
a) The risk to delivery of an activity/scheme/programme of the
entity with economy, efficiency and effectiveness
b) The risk to material misstatements in the financial statements of the entity
c) The risk to programme implementation due to natural calamities such as
flood, earthquake etc
d) The risk to programme implementation due to fraudulent activities

42. A performance Auditor is expected to demonstrate and practice ethical principles
and code of conduct and standards while undertaking performance audits. Which
of the following statement is true in this regard?
1. The performance auditor should comply with ethical principles and
code of conduct governing the auditor’s professional behaviour and
responsibilities, which include integrity, objectivity and fairness,
confidentiality, technical standards

2. It may be desirable that the performance auditor adopts an attitude
of professional scepticism throughout the audit, recognising that
circumstances may exist that could cause the information relating
to performance to be materially mis-stated
b) Both a and b
c) Only a
d) Only b
e) None of these
43. The performance auditor might seek to assess or measure effectiveness by
comparing outcomes – or impacts – with the goals set in the policy or
programme objectives. Such an assessment is also called:
a) Improvement Analysis
b) Goal-Achievement Analysis
c) Financial Inverse Tree
d) Regression Analysis
44. Accountants General should be alive to people -centric cutting edge issues while
selecting performance audit topics. Which of the following statements are true
with reference to selection of people centric topics for performance auditing?
a) SAI may select topics for performance audit, for which there are either no
budgets or these are insignificant, or whose materiality cannot be

determined with reference to expenditure, receipts or assets and liabilities
only if the subject or the deficient performance could affect a large or
vulnerable section in a significant manner.
b) The materiality of such topics could be determined with reference to the
size of the population that is affected and the risk may be assessed with
reference to consequence of deficient performance or non-existent
intervention by the entity, expected to address such issues.

c) Both A and B
d) None of the Above
45. Audit findings should be
a) developed on the basis of audit tests carried out on the sample
b) in the context of audit objectives and criteria
c) determined to be able to recommend remedial measures w.r.to causes of
under performance
d) All of the above
46. The potential impact of the performance audit on economy is
a) better identification/justification of need
b) introducing sub objectives and targets
c) reduction in costs through better contracting bulk buying, etc.,

47. Which of the following feature measures the extent to which objectives are
achieved and the relationship between the intended impact and the actual impact
of an activity?
a) Efficiency
b) Effectiveness
c) Economy
d) Equity
48. Which of the following is part of the performance audit impact analysis?
a) The analysis should provide a comparison of the actual impact against the
expected outcome anticipated in the strategic plan and in the audit plan
for the individual subjects.
b) The evaluation will have to necessarily refer to the strategic goals and
objectives set out in the performance audit strategic plan and would need
to address the extent of contribution of each performance audit to fulfilling

the strategic goals and objectives
c) The impact should be assessed in both qualitative and quantitative terms
and be classified in qualitative and quantitative terms.
d) All of the above
49. The audit techniques applied to performance audit of subjects relating to
sustainable development and environment management are generally similar to
those applied to other sectors though the audit objectives and approach may vary.
Which of the following statement are correct in respect of audit of subjects
relating to sustainable development?
a) The performance audit on sustainable development would deal with
programmes and activities in the context of explicit commitments
consequent upon international treaties on environment / sustainable

development.
b) The performance audit on sustainable development should take into
consideration national environmental management programmes.
c) The performance audits of all development projects should also address
the environmental impact and its management
d) All of these
50. The potential impact of Performance Audit on improved planning, control and
management is
a) improved form of account, including commercial formats
b) improved external control and monitoring by departments
c) greater information on sectoral performance
d) target controls against fraud
51. A Performance Audit in an IT environment should
a) assess whether the IT systems enhance economy, efficiency and

effectiveness of the entity’s/programme management
b) examine the IT system development and maintenance practices of the
entity
c) determine whether system out put meet entity quality and service delivery
parameters
d) All of the above
52. “Performance audit is concerned with the audit of economy, efficiency and
effectiveness. Which of the following statement is NOT TRUE with reference to
performance auditing?
a) It embraces audit of the economy of administrative activities in accordance
with sound administrative principles and practices and management
policies
b) It embraces audit of the efficiency of utilisation of human, financial and

other resources, including examination of information systems,
performance measures and monitoring arrangements and procedures
followed by audited entities for remedying identified deficiencies
c) It embraces audit of the effectiveness of performance in relation to the
achievement of the objectives of the audited entity and audit of the actual
impact of activities compared with the intended impact
d) It embraces verification of the account balances with reference

to the books of accounts to ensure whether statement of
accounts presents a true and fair view of the state of affairs of
the organization.
53. CAATs tools can be developed to
a) access and extract information from auditee databases
b) perform sampling, statistical processing and analysis
c) provide reports designed to meet particular audit needs

d) all of the above
54. Which is the powerful software tool for evaluation of ongoing projects,
particularly those with long gestation
a) crystal Ball
b) Teammate
c) Earned value Analysis (EVA)
55. A diagrammatic representation of the analysis of utilisation of the resources
made available for a programme which facilitates a comparison of the budgeted
resources with the actual utilization is called:
a) Financial statement
b) Budget Tree
c) Finance Inverse Tree

d) Regression Chart
56. To draw a sample of the beneficiaries E.g. sample states/districts within the
selected state
a) cluster sampling is used
b) Systematic sampling is used
c) multi-stage sampling is used

57. Spending less, spending well, and spending wisely refers to:
a) Economy, Efficiency and Effectiveness respectively
b) Efficiency, Economy and Effectiveness respectively
c) Effectiveness, economy and efficiency respectively
d) Effectiveness, efficiency and economy respectively
58. The SAI must use its power of access to information tactfully. This implies that:
a) the audited entity must be informed of the intention to audit and audit
scope at least three months in advance
b) requests sought by the audited entity for changes in the dates of audit
must be considered
c) it is desirable that the audited entity is informed of the methods
to gather evidence like survey of beneficiaries, interview with
employees
d) giving advance information about the audit to the audited entity takes
away the surprise element from audit and hence could be avoided
59. Economy, efficiency, effectiveness, equity and ethics are, in effect, three plus two
issues rather than five issues. Which of the following is correct with reference to
this statement?
a) Equity and ethics issues in performance audits add value only if
the audit findings against these two standards affect one or
more of the three i.e. economy, efficiency and effectiveness
b) Ethics and equity are related to the policy issues and an Auditor has no
role in ensuring the ethical and equitable behavior of the management
c) Ethics and equity are difficult to ensure if economy, effectiveness and
efficiency has to be ensured

d) Ethics and equity are automatically ensured if economy, effectiveness and
efficiency issues are addressed
60. It will demonstrate the cerebral competence of the SAI if it is able to display an
ability for prescience of the policy shifts and more importantly anticipation of the
risks to programmes, performance and public interest. Which of the following
statement is relevant in this regard?
a) Accountants General and the SAI should be alive to major shifts in the
policies and programmes of the entity and the consequential new public
sector programmes and select critical cutting-edge subjects for
performance audits in the context of policy changes.
b) Performance audits of sunrise issues are likely to contribute value to the
implementation of the policy shifts
c) Both A and B
d) None of these
61. Which of the following are considered quality assurance activities?
a) Report to management on progress against budget
b) Report to management on progress against schedule
c) Supervision
d) Allocation of responsibilities
e) All of the above

62. Which of the following is Least likely to be part of a performance auditing?
a) Examination and reporting on the quality of information and advice
available to government for the formulation of policy
b) Examination and reporting on the existence and effectiveness of
administrative to inform the government whether programme objectives
and targets have been determined with a view to fulfilling policy objectives
c) Examination and reporting on compliance to applicable laws and

regulations in the context of the performance audit objectives
d) Examination and reporting on policies formulated by the
government per se
63. Selection of audit topics for performance audits should be determined on which
of the following stages of the audit:
a) pre-study
b) research and evaluation

c) main study
64. Which of the following should the auditor first consider when planning the audit:
a) the audit objectives and criteria.
b) the audit objectives and findings.
c) the audit objectives and methodology.
d) the audit objectives and scope.
65. Based on strategic planning and further risk assessment, Accountant General
identifies a performance audit subject with high priority and whose
postponement may be associated with risk. But available manpower put a
constraint on undertaking such tasks. Which of the following could be the best
alternative in such a situation?
a) Accountant General may postpone the other performance audits selected

for the year and divert the resources
b) Accountant Genearal may request the Internal Audit wing of the entity to
undertake a performance Audit.
c) Accountant General may document in details the reasons for not being
able to undertake the high priority task after analyzing the resources
d) Accountant General may examine the possibility of outsourcing
works in part or full other than the core audit functions with the
approval of SAI top management in accordance with the extant
policy within the SAI.
66. What is true in respect of case study technique
a) It is an-indepth study of individual cases to explore the audit issues
b) Examining a small selection of cases is cheaper that studying a larger
representative sample
c) case studies involve judgment in selection and is open to bias

d) All of the above
67. The weakness/concern of using benchmarking technique is
a) It stimulates an objective review of processes, practices and systems
b) It supports recommendations for making changes
c) Bench Marking requires high degree of skill
68. Which among the following is correct w.r.to the measures of common tendency
a) mean is a good choice when the underlying data distribution is
strongly asymatric
b) In median one need not look for a symmetric data distribution before
application
c) Mode is the most common value of a variable

69. In considering the steps of the performance audit process, which of the following
is more likely to provide information on the implementation of audit
recommendations?
a) Reporting
b) follow-up
c) main study
d) Planning
70. The audit findings in the report are put into perspective and congruence is
ensured when:
0. Audit objectives link with audit questions
1. Audit link conclusions with findings
2. Recommendations link with overall objectives
b) only 1 is correct
c) only 2 is correct
d) only 3 is correct
e) All of the above are correct
71. PERT refers to:
a) Programme Efficiency Review Technique
b) Programme Evaluation and Review Technique
c) Programme effectiveness review time
d) Programme efficiency review time
72. Which of the following method is suggested in the performance auditing
guidelines for obtaining a 360 degree feedback for the performance audit
endeavour?
a) Setting up a system for internal evaluation of impact of performance
audits at the close of each year on governance in general and on the
entity’s policies and programme management, in particular.

b) maintain an inventory of recommendations, which are included in the
performance audits and follow them up to their implementation, both
from the point of nominal count as well as from the point of the quality of
implementation
c) Both A and B
d) None of the Above
73. The first stage in performance auditing is:

a) Implementation of performance audit for individual subjects
b) Strategic planning for performance audits
c) Follow up process and impact assessment
d) Drafting guidelines for performance auditing
74. Which of the following is NOT an advantage of setting audit objectives in the
performance audit?
a) It ensures good quality performance audits and therefore, is one of the

most important quality assurance measures
b) It fosters discipline and precision
c) It helps focused data gathering activities
d) It helps in undertaking the risk analysis
75. If new information/problems have come to the notice of audit team during the
conduct of audit, then
a) changes should not be made to increase the scope of the audit work plan
even if the new audit procedure could have a significant impact on the
overall audit question as such increase in scope will cost more time and
money.
b) changes should not be made to increase the scope of the audit work plan
even if the new audit procedure could have a significant impact on the
overall audit question, but the information/issue could be recorded for
subsequent audits or for coverage during follow-up audit.
c) changes should always be made to the audit work plan on collection of new
information as performance audit plans are required to be flexible.
d) none of the above is correct
76. Which of the following is LEAST likely to be the objectives of strategic planning
in SAI?
a) provide a firm basis for the SAI management to give strategic direction for
future audit coverage
b) provide a platform for communication with agencies and the legislature on
SAI audit strategies
c) understand entity risks and take them into account in audit selection
d) initiate disciplinary actions against the non-performing audit
staff in SAI
77. Which of the following documents can act as source documents for strategic
planning for performance auditing?
a) Documents of the entity including their administrative policies
b) Parliamentary interest in the form of legislation, parliamentary questions,
reports of PAC etc
c) Academic research on entity activities
d) All of these
5. Audit of Autonomous Bodies
1. One of the essential requirements of Section 20(1) is that audit can be entrusted
to the CAG
a) Only in public interest
b) Only if the Central or State Government feels the necessity to entrust the
audit work to CAG
c) Only if the president or governor feels that autonomous body is not well
managed and there are sufficient ground justifying the entrustment of
audit to CAG
d) Only if the president or governor of the State is of the opinion that no
other audit would be sufficient to serve the legislative control over the
autonomous body
2. Which among the following provisions empower C&AG to conduct audit of bodies
or authorities?
a) Section 14 & 15 of the DPC Act
b) Section 14, 15, 19 & 20 of the DPC Act
c) Section 14, 19 & 20 of the DPC Act
3. Which of the following is NOT a provision of the CAG's DPC Act that empowers it
to take up the audit of autonomous bodies?
a) Section 13
b) Section 14
c) Section 15
d) Section 20
4. Which among the following is incorrect as to Section 14 audit?
a) If the grant or loan is from outside the consolidated fund, audit under
section 14 is not possible
b) Payments of purely deposit nature should also be regarded as
expenditure
c) The expenditure incurred on purchase of raw material, finished goods,
disbursement of loans is treated as expenditure in respect of institutions

running business
5. The objectives of audit of accounts or audit of receipt & expenditure of bodies and
authorities under section 14, 19 and 20 of the Act are:
a) To check that transactions comply to relevant laws, rules and regulations
b) To conduct the audit with the purpose of certification of annual accounts
c) To conduct performance audit to assess economy, efficiency and

effectiveness of various activities/programmes undertaken by these
bodies.
d) All of the above
6. In practice the certification of annual accounts is undertaken under which of the
following provisions of CAG's DPC Act?
a) Section 19 and Section 20
b) Section 20 only
c) Section 13 and Section 14
d) Section 14 and Section 15
7. The objectives of audit of Autonomous Bodies by CAG is to conduct
a) compliance audit
b) financial audit
d) all of the above
8. The parameter for examining the justification for Section 14(2) or 20(2) is
a) control by the sanctioning agency is adequate
b) the state of accounts is known to be satisfactory
c) there is arrangement for audit by an agency outside the control of the
institution
d) these are persistent losses in respect of institutions undertaking

manufacturing or trading activities
9. In cases where CAG conducts super imposed audit
a) It is also required to certify the accounts
b) It is also required to certify the accounts if the chartered accountant who
conducted the audit were appointed on the advise of the CAG
c) It is also required to certify the accounts if the chartered accountant who
conducted the audit were appointed from the panel of auditors prepared
by the CAG
d) Certification of accounts need not be done by CAG in cases
where CAG is not the sole auditor
10. The restriction with respect to right of access to the books and accounts under
Section 15(2) is
a) the autonomous body is not a foreign state or an international
organization
b) the President/Governor/Administrator relieve the CAG in public interest
c) the law under which the corporation is established provides for audit by
someone other than CAG
d) All of the above
11. Which is incorrect as to audit of autonomous body under Section 15
a) It would be preferable to defer examination of accounts of the until its
accounts are audited and certified
b) Grants given for maintenance, purchase of specific items like
land & building shall not be treated as specific purpose grants
c) The objections should not be conveyed or corresponded with the
autonomous body directly
12. Audit under Section 19(3) of the DPC Act can be entrusted to CAG
a) of a corporation established by a state or Union Territory Law
b) Not of a corporation established under a state or Union Territory Law
c) neither (a) nor (b)
13. Which among the following is incorrect as to the requirement under Section 19(3)
a) the decision to entrust audit will be of government
b) It is obligatory that the autonomous body should concur with

the decision
c) It is necessary to convey to the Government the terms and conditions
under which audit can be undertaken by CAG
14. Audit under Section 20(1) is taken up
a) for the purpose of certification of annual accounts
b) the certification of accounts also includes performance audit

c) To issue separate Audit, Report containing only comments on accounts’
d) All of the above
15. The underlying assumption while preparing the common format of accounts is
a) Accrual system of accounting
b) The entity is viewed as a going concern
c) both (a) and (b)
16. Find out the correct statement
a) The going concern has the intention of curtailing materially the scale of its
operation
b) The transactions and events shall be governed by merely by the legal form
in the Balance Sheet
c) The excess of the provision over the amount of reasonably

anticipated loss is treated as a reserve
17. Revenue shall not be recognized unless
a) no significant certainty exists regarding the amount of the receivable
consideration
b) the related performance has been achieved
c) it is not reasonable to expect realization and ultimate collection of the

amount of revenue
d) none of the a bove
18. What is the common assertion underlying income statement items and Balance
Sheet items
a) occurrence
b) ownership
c) Regularity
d) Disclosure
a) Materiality should be determined with reference to overall
audit assurance
b) Risk is concerned with the likelihood of error
c) materiality is concerned with the extent to which we can tolerate error
20. Match the following
(A) Inherent Risk (A) will not be detected on a timely basis by the internal controls
(B) Internal Control
(B) is the inverse of overall audit assurance
Risk
(C) Dection Risk (C) is the material error occurring in first place
(D) is the inverse of the required assurance level from substantive
(D) Overall Audit Risk
tests
a) A-B;B-A;C-D;D-C
b) A-C;B-A;C-D;D-B
c) A-C;B-D;C-B;D-A
d) A-B;B-D;C-A;D-C
21. System based audit (SBA) is an audit approach
a) which may be used by an external auditor to express an opinion
on the financial statements

b) where the auditor decides that he can not place some reliance on the
internal controls
c) where the auditor do more substantive testing if he took no assurance at
all from auditee’s internal control
22. Which among the following is the essential feature of statistical sampling
a) sampling should be predictable

b) The sample results need not be in accordance with the probability theory
c) the sample items should have known probality of selection
23. Match the following w.r.to various types of sampling
(A) Stratified sampling (A) the sample is chosen by selecting a random starting point
and then picking every sample interval
(B) sampling assigns higher inclusion probability of selection
(B) Cluster sampling
for population units with higher sizes
(C) Probability(C) the target population is first divided into mutually
proportional to size (PPS) exclusive and collectively exhaustive clusters
(D) is a two-step process in which the population
(D) Systematic sampling
is partitioned into sub- populations
a) A-D;B-A;C-B;D-C
b) A-D;B-C;C-B;D-A
c) A-B;B-A;C-D;D-C
d) A-C;B-D;C-B;D-A
24. What is true as to Analytical Review as substantive audit techniques
a) It is a substantive procedure used to reduce the overall audit risk
b) It is a form of deductive reasoning
c) to detect monetary errors in the financial statements given that they have
occurred
d) All of the above
25. The certificate that the auditor should obtain from the management is
a) Stock in transit
b) contingent liabilities
c) work in progress with processors
d) all of the above
26. The separate Audit Reports (SAR) of Autonomous Bodies should contain
a) Introduction
b) Comments on accounts
c) Impact of comments on accounts
d) All of the above
27. In addition to ‘comments on accounts’ the SAR may include
a) cases where assurances for rectification are fulfilled after a couple of years
b) corrections/rectifications carried out at the instance of audit
c) compliance of accounting standards/instructions contained in the
common Format of Accounts
28. Management letter includes
a) Errors in annual accounts that are not considered material
b) Reconciliation between the balances as per broadsheets and as reflected in
the accounts
c) classification errors within the accounting head where management has
assured rectification
d) All of the above
29. Find out the incorrect statement w.r.to performance audit of regulatory bodies
a) The audit of accounts of Electricity Regulatory Commissions and Audit
Report thereon would include performance audit
b) The orders passed by the commissions in exercise of quasijudicial

functions would not be within the scope of Audit
c) The decisions of the Authority that are appealable to the
Appellate tribunal are subject to audit by CAG
30. The broad objective of quality assurance is to ensure
a) controls are in place at all stages of the audit cycle including planning,
execution and reporting

b) controls are properly implemented
c) inbuilt mechanism to constantly review and update the control exists
d) All of the above
6. Financial Attest Audit Manual

1. Financial (attest) audit is primarily concerned with expression of audit opinion on
a set of financial statements.

a) FALSE
b) TRUE
2. Financial (attest) audit includes:
i) Examination and evaluaion of financial records

ii) Audit of financial systems and transactions
iii) Audit of intenal control and internal audit functions

iv) Evaluation of Compliance with applicable statutes and regulations
a) (i) only
b) (i) & (ii) only
c) (i) to (iii) only
d) All of the above
3. Financial (attest) audit includes an evaluation of Compliance with applicable

statutes and regulations
a) TRUE
b) FALSE
4. Transaction audit essentially seeks to address the following issues of risks to:
i) Regularity
ii) Performance
iii) Propriety
iv) Financial Control
a) All of the above
b) (i), (ii) & (iii) only

c) (i), (iii) & (iv) only
d) (i), (ii) & (iv) only
5. Transaction audit is linked to a specific assurance on an individual set of financial
Statements in a particular year
a) TRUE
b) FALSE
6. Transaction Audit results in reports to
a) Management
b) Legislature
c) Parliament
d) Any of the these
7. The following types of financial statements are audited in respect of Union, State
and UT Governments
i) Finance Accounts
ii) Appropriation Accounts
iii) Balance Sheet
iv) Statements of Expenditure
a) (i) & (ii) only

b) (i) to (iii) only
c) (i) & (iv) only
d) All of the above

8. Financial Audit of Government Companies is conducted by
a) Chartered Accountants appointed by the companies
b) Chartered Accountants appointed by Ministry of Company Affairs
c) Chartered Accountants appointed by C&AG
d) C&AG
9. The audit of financial statements of Government Companies conducted by the
C&AG is called
a) Financial Audit
b) Supplementary Audit
c) Attest Audit
d) Compliance Audit
10. Financial Audit of Autonomous Bodies receiving financial assistance is governed

by ______ of CAG's DPC Act 1971
a) 13 & 14
b) 14 & 15
c) 13 & 15
d) 16
11. The International Standards of Auditing (ISAs) have been developed by
a) The International Federation of Accountants

b) The International Auditing Practices Committee
c) The Internationa Auditing & Accounting Standards Board
d) The INTOSAI
12. The Auditing Standards of the C&AG of India comprise of
i) General Standards
ii) Field Audit Standards

iii) Field Standards
iv) Reporting Standards
a) (i) to (iii) only

b) (i) & (ii) only
c) (i), (iii) & (iv) only
d) All of the above
13. Which of these standards regulate the condut of the auditor
a) General Standards
b) Field Audit Standards
c) Field Standards
d) Reporting Standards
14. Which of these standards regulate the audit activity of the auditor
a) General Standards
b) Field Audit Standards
c) Field Standards
d) Reporting Standards
15. The Primary objective of a financial audit is to
a) Examine the accounts and records
b) Srutinize financial statements

c) Point out overstatements and understatements of account balances
d) Express an opinion on the financial statements
16. The general audit objectives are also called
a) Opinions
b) Assertions
c) Criteria
d) None of these
17. Which of these is the correct set of general financial audit objectives for income &
expenditure account
a) Completeness, Occurrence, Measurement, Disclosure,
Regularity
b) Completeness, Occurrence, Measurement, Disclosure, Existence
c) Completeness, Occurrence, Existence, Disclosure, Regularity
d) Completeness, Ownership, Measurement, Disclosure, Regularity
18. If the monthly accounts of some Treasuries or Public Works Divisions are
excluded from the Accounts of a State Government, it affects this objective
a) Existence
b) Disclosure
c) Completeness
d) Occurrence
19. Insurance relating to the year 2013-14 was paid in 2012-13 in advance. The same
was however booked as expenditure in 2012-13. This does not meet the objective
of
a) Existence
b) Ownership
c) Completeness
d) Occurrence
20. If some item of revenue expenditure is misclassified as capital expenditure, it can
be said that this objective is not met
a) Existence
b) Disclosure
c) Completeness
d) Occurrence
21. Which of these is the correct set of general financial audit objectives for balance
sheet
a) Completeness , Existence , Valuation , Ownership , Disclosure
b) Completeness , Existence , Measurement , Ownership , Disclosure
c) Completeness , Occurence , Valuation , Ownership , Disclosure
d) Completeness , Regularity , Valuation , Ownership , Disclosure
22. This financial audit objective directly tests for potential overstatement of assets
and liabilities
a) Existence
b) Ownership
c) Completeness
d) None of these
23. The legal right to sue and recover an account receivable is the test of
a) Existence
b) Ownership
c) Completeness
d) None of these
24. A financial audit is intended to give
a) Qualified Assurance
b) Absolute Assurance
c) Positive Assurance
d) Reasonable assurance
25. Materiality is classified by
a) Context
b) Nature
c) Value
d) All of these
26. The point where the total value of errors in an account becomes unacceptable to
audit is called
a) Unacceptable level
b) Materiality level
c) Qualifiable Level
d) None of these
27. The materiality thresholds depend on the ____ of accounts and their _____.
a) Basis, Sensitivity
b) Sensitivity, relativity
c) Basis, accountablity
d) Basis, Value
28. For accounts prepared on cash basis, in respect of gross receipts/expenditure,
materiality percentage would be
a) For very sensitive accounts - 1 %, sensitive accounts - 1% to 2% and non

sensitive accounts - 5%
b) For very sensitive accounts - 1/2 %, sensitive accounts - 1/2% to
2% and non sensitive accounts - 2%
c) For very sensitive accounts - 2 %, sensitive accounts - 5% and non
sensitive accounts - 8%
d) none of these
29. Planning materiality may be taken at a lower figure than reporting materiality.
a) TRUE
b) FALSE
30. AMLE in the context of likely errors is used in this stage of audit
a) Reporting
b) Evaluation of results
c) Planning
d) Field Audit
31. Which of the following statements is true about Precision
a) It is a range of error in an account between MLE & materiality
b) It is a range of error in an account between MLE & AMLE
c) It is a range of error in an account between Materiality & AMLE
d) None of these
32. The formula for calculating precision is
a) (Materiality - Range of error possible) x AMLE
b) (Materiality - AMLE) x Range of error possible
c) (AMLE - Range of error possible) x Materiality
d) None of these
33. There is a direct relationship between materiality level and the level of audit risk
a) TRUE
b) FALSE
34. The three components of Audit Risk as per the risk model are
a) Inherent Risk, Control Risk, Mitigation Risk
b) Inherent Risk, Control Risk, Litigation Risk
c) Inherent Risk, Control Risk, Detection Risk
d) None of these
35. If the desired overall assurance from audit is 95%, the inherent risk is 40% and
the control risk is 50%, what would be the desired assurance from substantive
tests
a) 90%
b) 95%
c) 99%
d) 75%
36. What are the audit procedures commonly used to obtain audit assurance?
a) Analytical Procedures
b) Systems Based Audit
c) Direct Substantive Testing
d) All of the above
37. Which of the following is not a part of analytical procedures?
a) System Analysis
b) Economic Analysis
c) Regression Analysis
d) Predictive Analysis
38. When you are finding out the inventory-turnover ratio, you are doing
a) Comparison across components
b) Comparison involving a single component
c) Regression analysis
d) Economic analysis
39. This is a technique that creates an equation to reveal how one variable is related
to one or more other variables.
a) Comparison across components
b) Predictive Analysis
c) Regression analysis
d) Economic analysis
40. Which of the audit procedures is a form of inductive reasoning where the
reasonableness of the aggregate results is inferred from the evidence of reliability
of the individual details that are tested?
a) Analytical Procedures
b) Systems Based Audit
c) Direct Substantive Testing
d) All of the above
41. Which method of sampling is expected to produce representative samples?

a) Block Selection
b) Judgmental Sampling
c) Random Sampling
d) Convenient Sampling
42. Which method of sampling is not expected to produce representative samples?
a) Block Selection
b) Random Sampling
c) Systematic Sampling
d) Monetary Unit Sampling
43. Which kind of audit sampling is generally used for testing controls?
a) Attribute Sampling
b) Random Sampling
c) Monetary Unit Sampling

d) Stratified Sampling
44. A pre-condition for any statistical sampling is the availability of a _______
a) Sampling unit
b) sampling frame
c) Sampling structure
d) All of the above
45. Population is divided into groups, each being fairly homogenous with respect to
value and risk in this kind of sampling
a) Block Selection
b) Random Sampling
c) Stratified Sampling
46. This method of sampling is also called probability proportionate to size (PPS)
sampling
a) Block Selection
b) Random Sampling
47. Extrapolation of sampling results to the population is possible in the case of
Judgmental Sampling.
a) TRUE
b) FALSE
48. Sampling interval is calculated in this kind of sampling
a) Simple Random Sampling
b) Systematic Sampling
d) All of the above
49. Reflecting all the transactions relating to the period of the accounts without
regard to the actual date of payment or receipt is also called
a) Accrual system accounting
b) Mercantile system of accounting
c) Both
d) None of these
50. Which of the following statements are true?
a) The Union and State Governments follow cash based accounting
while Corporations and autonomous bodies mainly follow
accrual based accounting
b) The Union and State Governments follow accrual based accounting while
Corporations and autonomous bodies mainly follow cash based accounting
c) The Union and State Governments and Corporations and autonomous

bodies follow accrual based accounting
d) The Union and State Governments and Corporations and autonomous
bodies follow cash based accounting
51. Risk assessment is primarily a part of which of these stages in the audit process?
a) Planning
b) Excecution
c) Reporting
d) Follow up
52. In the context of Government Accounts in India, the key feeder systems include:
a) Treasuries and Sub-Treasuries
b) Pay and Accounts Offices
c) Forest Divisions
d) All of the above

53. In the context of Government Accounts in India, the key feeder systems also
include State Bank of India or any other public sector bank transacting
Government Business on behalf of Reserve Bank of India
a) TRUE
b) FALSE
54. Which of the following statements is false?
a) Planning materiality may be set at a lower level than reporting materiality

b) It is easier to plan for errors material by nature
c) At the planning stage, the audit team is concerned primarily with
materiality by value
d) Materiality by context is easy to assess at the planning stage
55. Misclassification of revenue expenditure resulting in a saving in a grant when in
fact there has been an excess is an example of.
a) Materiality by value
b) Materiality by context
c) Materiality by nature
56. The risks identified from top down review of entities and which may affect a
number of different account areas are called
a) Entity Risks
b) Accounting Risks
c) Inherent Risks
d) Account Area Risks
57. The process for identifying material risk factors has ____ key stages
a) Four
b) Five
c) Six
d) Seven
58. The three levels of substantive procedures that can be performed in decreasing
order of assurance required are:
a) Standard, Focused, Minimum
b) Focused, Standard, Minimum
c) Maximum, Standard, Minimum
d) Minimum, Standard, Focused
59. The extent of audit procedures and the the level of assurance required are
a) Directly related
b) Indirectly related
60. These are performed if the audit team identifies a risk that could lead to potential
material misstatement and where no reliance can be placed on mitigating
controls to address the risk
a) Focused Subtantive Procedures
b) Standard Substantive Procedures

c) Minimum Substantive Procedures
61. Analytical Procedures are unlikely to be used when these are performed.
62. These are performed if the audit team has not identified risks that could lead to
material misstatement and no reliance is planned to be placed on controls.
63. These are Performed if the audit team plans to take assurance from mitigating
controls or from other controls.

64. The document that presents an analysis of the main audit areas and a summary
of the key planning decisions is called
a) Audit memorandun
b) Audit execution memorandum
c) Audit Note
d) Audit Planning memorandum
65. Instructions to audit team members on the performance of chosen audit
procedures are contained in the
a) Plan Document
b) Audit Planning memorandum
c) Detailed Audit Programme
d) None of these
66. Which of the following statements is false?
a) Documentary evidence is more reliable than oral evidence.
b) Evidence, of which the auditor has direct personal knowledge, is the most
reliable evidence.
c) Independent evidence obtained from external sources is more reliable
than internal evidence.
d) Visual evidence is highly reliable for confirming the ownership
of the assets and their value.
67. Which of the following statements is True?
a) Oral evidence must be considered as the least reliable.
b) Photocopies are as reliable as the originals.
c) Evidence, which is accepted by the auditee entity, is not always reliable.

d) The auditor may gain increased assurance even when audit evidence
obtained from different sources is not consistent.
68. Which of the following is False?
a) A systematic error is one which will only occur in defined circumstances
b) A systematic error affects only a proportion of the population
c) A random error is one which could have also occurred in any of the
transactions that were not selected for testing.

d) None of these
69. Which of the following is True?
a) A systematic error should be extrapolated over the entire population
b) A random error is to be extrapolated over a defined subset of population
c) Both A & B
d) None of these
70. The audit working papers contain

a) the details of the audit procedures undertaken
b) conclusions drawn and the implications for the audit opinion
c) the record of the reasoning on all significant matters where the members
of the audit teams have exercised judgment
d) all of the above
71. The acid test for good documentation is
a) when it is appreciated by the higher authorities
b) when it results in good quality audit observations
c) when it results in giving a clean chit to the entity observed
d) that an experienced auditor with no previous connection with
the audit should be able, without difficulty, to ascertain the
evidence gathered and understand and support the conclusions
reached.
72. Which of these broad characteristics of audit working papers applies particularly
to photocopies
a) Clarity and conciseness
b) Legibility and neatness
c) Completeness
d) Accuracy
73. Working papers should be restricted to matters, which are important, pertinent
and useful for the purpose. Which is the characteristic that we are talking about?
a) Clarity and conciseness
b) Legibility and neatness
c) Relevance
d) Accuracy
74. Teammate software is
a) a data extraction tool

b) a data analytic tool
c) an audit documentation tool
d) none of these
75. If the financial statements properly present receipts and payments or give a true
and fair view and have been prepared in accordance with relevant accounting
requirements, the auditor
a) does not give any opinion
b) gives a qualified opinion
c) gives an unqualified opinion
76. A material but not fundamental uncertainty would lead to
a) disclaimer
b) qualified opinion
c) unqualified opinion
d) adverse opinion
77. A fundamental disagreement would lead to
a) disclaimer
b) qualified opinion
c) unqualified opinion
d) adverse opinion
78. Policies, systems and procedures established by Comptroller and Auditor General
to maintain a high standard of audit activity are also called
a) Quality control
b) Reasonable Assurance
c) Quality Check
d) Quality Assurance
79. The primary responsibility for safeguarding the audited entity’s funds and assets
and to prevent frauds or errors lies with its
a) employees
b) internal auditor
c) management
d) statutory auditor
80.Risks of financial irregularity are always material for the purpose of qualifying
audit opinion on the finanicial statements
a) TRUE
b) FALSE
81. COBIT is
a) a data extraction tool
b) an IT Audit framework
c) an audit documentation tool
d) none of these
82. COBIT is developed by
a) SAI, India
b) INTOSAI
c) ICAI
d) IT Governance Institute and ISACA
7. Environment and Climate change Auditing Guidelines
1. Meeting of the needs of the present without compromising the ability of future
generations to meet their own needs is called

a) waste management
b) sustainable Development
c) clean Development mechanism

d) forest management strategy
2. As per the Basel Convention ‘waste’ include all substances that
a) have no longer any use for people
b) are either discarded or intended to be discarded
c) are need to be disposed
d) All of the above
3. The sum of all emissions of carbon dioxide which were induced by an entity’s
activities in a given timeframe is called
a) Carbon Footprint
b) Carbon Intensity
c) Carbon sinks

4. ‘Carbon Intensity’ denotes which of the following
a) the amount of greenhouse gas emissions produced to support human
activities
b) the linkage of carbon footprint with economic growth and
implies growth with equity
c) certified emission reductions

5. Match the following w.r.t. international protocols and the objects for which they
were created
(A) CARTAGENA
(A) conservation and wise use of wetlands
Protocol
(B) control of Transboundary movements of Hazardous wastes
(B) Vienna Convention
and disposal
(C) RAMSAR (C) binding agreement governing international movement of
Convention genetically modified organisms
(D) Basel Convention (D) Protection of ozone layer
a) A-D; B-A; C-B; D-C

b) A-B; B-A; C-D; D-C
c) A-C; B-D; C-A; D-B
6. Which protocol that laid down individual emission limitations and reduction
commitment of greenhouse gases?
a) UN convention on Environment and Development
b) Kyoto protocol
c) World summit on sustainable development
7. The objective of CBD is to ensure
a) conservation of biological diversity

b) sustainable use of its components
c) promotion of a fair and equitable sharing of the benefits from the
utilization of genetic sources
d) All of the above
8. Central and state pollution control Boards have been established by
a) The Environment (Protection) Act 1986
b) The Air(Pollution and control of Pollution) Act 1986

c) The water (Prevention and control of Pollution) Act, 1974
9. Which among the following has been enacted in line with the objectives of
Stockholm conference, 1972
a) The Biological Diversity Act, 1972
b) The National Environment Tribunal
c) The Air (Pollution and control of Pollution) Act, 1981

10. Find out the incorrect statement w.r.t. “The National Green Tribunal”
a) The Tribunal is the sole adjudicator of all green laws
b) The Tribunal allows ‘any person aggrieved, including any representative
body organizations to file application for the grant of relief
c) Adjudication by the green tribunal is final and no appeal is
allowed
11. Which among the following is correct as to Environmental Audit
a) Environmental audit is different from the audit approach practiced by the
SAI
b) The criteria is based on local, national standards but not on
global standards
c) It is an systematic process of obtaining and evaluating information about
environmental aspects
12. Performance audit of environmental issues include
a) Identification of risks caused by pollution to health and environment
b) existence or adequacy of environmental policies and laws or strategies
c) compliance with commitments, if entered into or legally obligated with

international treaties
d) All of the above
13. The performance audit of environmental issues enable the entities
a) to improve upon their performance
b) assist policy matters and legislators to rectify the omissions and shortfalls
c) Contribute to good governance
d) All of the above

14. The success of audit of environmental issues would be possible only when the SAI
does
a) the evaluation of the performance entity with reference to established
standards and indicators
b) the evaluation against authentic criteria
c) both (a) and (b)
d) either (a) or (b)
a) It is not necessary to have a separate performance audit mandate to
conduct environmental audit
b) Environmental audit is not significantly different from other audits
practiced by SAI
c) The mandate of SAI to undertake environmental audit is w.r.t.

the provision of the constitution and not the CAG’s DPC Act
16. The type of organizations and institutions which are subject to environment audit
are
a) Those whose operations directly or indirectly affect the environment
positively or negatively
b) Those with powers to make or influence environment policy formulation

and regulation
c) Those with powers to monitor and control the environmental actions of
the others
d) All of the above
17. Audit Risk for the environmental audit does not include
a) Challenge of the samples selected for verification
b) challenge of the selected criteria on grounds of inapplicability or bias

c) Technical nature of the activities of the entity
18. While conducting the environmental audit SAI should avoid
a) using the findings and conclusions on their internal
environmental controls to put the entities in a negative light
b) Doubts about the capability of the audit team in view of the technical
nature of the audit
c) doubts about the competence and independence of the external experts
selected to support the audit
19. Present owners being held liable for environmental damage caused by the
previous owners match with the following
a) consequences of violation of environmental rules and regulations

b) Initiative to prevent, reduce and abate damages to the environment
c) consequences of vicarious liability imposed by a regulatory
body
20. Conservation of components of Bio Diversity out side the natural habitat is
a) 'In-situ' conservation
b) 'ex-situ' conservation
c) Biosphere reserves
21. The water quality monitoring established by CPCB is
a) Global Environment Monitoring System (GEMS)
b) Monitoring of Indian National Aquatic Resources System (MINARS)
c) Yamuna Action Plan (YAP)
d) All of the above

22. The Mantra ‘reduce, reuse and recycle’ is associated with
a) Effective waste Management
b) Environment Impact Assessment
c) Air quality monitoring programme
23. 'Adaptation' and 'Mitigation' are associated with
a) Water Pollution
b) Global warming
c) Sustainable Forest Management
24. Carbon Dioxide Equivalent is
a) The emission of a gas, by weight, multiplied by its 'global warming
potential'
b) How much global warming, a greenhouse gas may cause, using carbon
dioxide as the base unit
c) Both (a) and (b)
25. Consider the following statement and find out the incorrect one
a) MITIGATION tackles the causes of climate change
b) ADAPTATION seeks to tackle the impacts of climate change

c) sustainable development refers to non-declining human wellbeing over
time
d) India has ratified the London convention dealing with
prevention of marine pollution by dumping wastes
8. Standing Order on Role of Audit in Relation to Cases of

Fraud and Corruption
1. Examination of system for detection and prevention of fraud and corruption is an

integral part of ________ audits.
a) Regulatory
b) Performance
c) Financial
d) All of the above
2. Audit officers _________ legal determinations of whether fraud has actually
occurred.
a) make
b) do not make
3. The responsibility for the prevention and detection of fraud and error rests
primarily with the ___________ through the implementation and continued
operation of accounting and control systems designed to check the fraud.

a) Audit Team
b) management of the audited entity
c) Vigilance and Corruption Department
d) All of the above
4. During audit of financial statements which type of intentional misstatements are
relevant to the audit teams?
a) misstatements resulting from fraudulent financial reporting

b) misstatements resulting from misappropriation of assets
c) both ‘A’ and ‘B’
d) None
5. The attitude of ‘professional skepticism’ should be avoided by the Audit team in
certain cases of Audit.
a) True
b) False
6. The audit teams should clearly understand that the audit evidence obtained can
be only persuasive and not conclusive.
a) False
b) True
7. While reporting all cases of suspected or presumptive fraud or corruption, the
audit officers are expected to provide their own judgment regarding the existence
of fraud and corruption.
a) True
b) False
8. Reports of individual cases of suspected fraud/corruption should be confidentially
addressed, in the first instance, to the _______ with the approval of the Group
officers.
a) Controlling authority concerned
b) Central / State Vigilance Commission
c) Lok Ayukta
9. Cases relating to suspected fraud and corruption should be specially highlighted
in the concerned _______________.
a) Inspection Report
b) Audit Notes
c) Audit Reports
d) All of the above
10. While forwarding the Bond copy of the Audit Reports to Headquarters, the A.G.
should indicate ____________.
a) in the forwarding letter the number of cases of fraud and corruption
included in the report together with the money value of the concerned
paras.
b) in the submission note of the file relating to the bond copy, the number of
cases of suspected fraud and corruption in the Report should be
highlighted together with the money value of concerned paras
d) None
11. Fraud examination is a part of the normal auditing procedures which includes:
a) being alert for situations, control weaknesses, inadequacies in record
keeping, errors and unusual transactions or results, which could be
indicative of fraud, corruption, improper expenditure or lack of probity.
b) focusing audit strategy on areas and operations prone to fraud and
corruption by developing effective high risk indicators for fraud.

d) None
12. Which of the following actions amounts to fraud?
a) a mistake in gathering or processing data from which financial statements
are prepared.
b) an incorrect accounting estimate arising from oversight or
misinterpretation of facts.
c) a mistake in the application of accounting principles relating to

measurement, recognition, classification, presentation or disclosure
d) ‘A’, ‘B’, and ‘C’
e) None of the above
13. Fraud does not involve deliberate misrepresentation of facts or significant
information to obtain undue or illegal financial advantage.
a) True
b) False
14. Fraud involving one or more members of management or those charged with
governance is referred to as ___________.
a) employee fraud
b) management fraud
c) official fraud
d) none
15. An act committed in good faith, which by subsequent turn of events, proves to be
incorrect or based on wrong information is _________.
a) a fraud
b) not a fraud
16. For an act to come within the ambit of ‘Fraud’ which of the following elements
required to be present?
a) The act is intentional on the part of one or more individuals working in

collusion with each other.
b) The object of the act is to obtain or give illegal advantage in violation of
the laws, rules and guidelines existing on the subject.
c) the intention, collusion and object of obtaining illegal advantage will have
to be present when a particular act is committed.
d) All of the above
17. Normally any such act which would causes lose to exchequer or be against
public interest will be treated as ‘Fraud’.
a) True
b) False
18. In Government auditing, it might be appropriate to set higher materiality levels
than the private sector auditing to ensure higher level of accountability
requirements.
a) True
b) False
19. Though traditionally materiality has been one of the prime factors to determine
the audit priority, in case of fraud detection, since the act is illegal, materiality
assumes lower significance.
a) True
b) False
20. Audit has the sole responsibility of establishing and determining whether a
misrepresentation is an error or fraud.
a) True
b) False
21. _________ involves behavior on the part of officials in the public and private
sectors, in which they improperly and unlawfully enrich themselves and those
close to them, or induce others to do so, by misusing the position in which they
are placed.
a) Fraud
b) Corruption
c) both
d) none
22. The audit personnel should exercise professional skepticism and professional
judgment in dealing with possible fraud indicators.

a) True
b) False
23. The example of Active internal control is __________.
a) Signatures and document countersigning procedures.
b) Segregation of duties and functions
c) Physical asset control; real time inventory control
d) Document matching and cross linking of documents

e) All of the above
24. When auditors intend to report on fraud and corruption, they should ensure the
reliability of audit evidence by verifying it with source documents including third
party evidence.
a) True
b) False
25. In determining overall responses to address the risk of fraud, the auditor should:
a) evaluate the accounting and reporting policies used by using different
sampling methods
b) Incorporate an element of unpredictability in the selection of the nature,
timing and extent of audit procedures
d) None
26. IT frauds are committed by _________.
a) insiders
b) outsiders
c) vendors and competitors
d) All of the above
27. IT frauds are committed by manipulation of _________.
a) input
b) output
c) throughput
d) All of the above
28. For Auditors, the most effective tool is data enquiry, analysis and reporting
software such as _________.
a) ACL
b) IDEA
c) Oracle
d) only ‘A’ and ‘B’
29. It is particularly important for the auditor of the IT system to assess in his audit
the level of ___________ built in and if these are in tune with the sensitivity of
data.
a) Physical access controls
b) Logical access controls
c) Security controls
d) all of the above
30. The report of the audit party should indicate inter alia _________.
a) the scope of audit
b) main findings
c) total amount involved

d) modus operandi of the suspected fraud or the irregularity , accountability
for the same and recommendations for improvement of internal control
system, fraud prevention and detection measures
e) All of the above
31. _________ means the contractor or supplier claims and receives payment for the
same service or work done or goods supplied under the same or different
contracts
a) Duplicate supply
b) Duplicate payments
c) Second payments
32. All cases of fraud and corruption should be followed up vigorously with
________.
a) the concerned audited entity

b) the higher executieve authorities
c) Both
d) None
33. All significant cases of fraud and corruption should be followed up with the
Secretary of the Adminstrative department concerned.
a) True
b) False
34. In IT Fraud, the documentation should include ________.
a) The identical and assessed risks of fraud, the overall responsed of the
auditor to the assessed risk of fraud and the nature, timing and extent of
audit procedures and the linkage of those procedures with the assessed
risk of fraud.
b) the results of the audit procedures, including those designed to address

the risk of management override of controls
c) Communications about fraud made to management etc.
d) All of the above
35. The situations/events that may be suggestive of fraud/presumptive fraud should
be highlighted in the _________ with a recommendation to the executive for
detailed investigation and response.
a) Inspection report
b) Audit report
c) Audit note
d) All of the above
36. In addition to reporting to the management of the audited entity,
material/significant cases of fraud and corruption may be reported through
separate confidential letters to __________ in case of Union Government.
a) Central Bureau of Investigation

b) Central Vigilance Commission
c) Lok Ayukta
d) only ‘A’ and ‘B’
e) All of the above
a) In case of financial audit, instances of possible fraud and corruption may
require qualification in the Audit Opinion on financial statements,
depending upon the materiality of the audit findings.
b) When in the opinion of the auditor the financial statements include
material fraudulent transactions or such transactions have not been
adequately disclosed, or the audit conducted by the auditor leads him to
the inference that instances of fraud and or corruption have taken place
and when the auditor has adequate evidence to support the conclusion,
he should qualify the audit certificate/opinion and ensure that his findings
are adequately included in his audit report
c) The term fraud or corruption may be used in a conclusive sense if
the auditor feels so.
38. The term fraud or corruption may not be used in a conclusive sense unless such
action is established in a court of law.
a) True
b) False
a) Each field office should establish a database of fraud or corruption related
audit issues for building a linkage across functional groups to identify red
flag items.
b) Change in mode of audit investigation is required to bring out system
deficiencies in greater detail rather than mentioning only money value.

c) Red flagged items should bring out the intention and failure of internal
control irrespective of money value.
d) The data base need not be reviewed by the Accountant General.
40. _____________ means specifications and time limits are manipulated to favor a
certain contractor or supplier.
a) Tailored Specifications
b) Special Specifications
c) Manipulated Specifications
d) None
41. ________ means purchases are made from a fake suppier or contractor.
a) Fake Contractor
b) Phantom Contractor
c) Splitting of purchases
d) None
42. Under ‘Splitting of Purchases’, the purchases of goods and services are split
___________.
a) to avoid open competition
b) to avoid having to seek the approval of higher authority
c) Both
d) None
43. ________ means the contractor falsifies the goods specifications or his ability to
provide certain services.
a) False representations
b) False specifications
c) False agreements
d) All of the above
44. ___________ means public funds are used to acquire goods for personal use or
public assets pilfered(stealing small amount or articles) by officials.
a) Stealing of Public Assets
b) Pilferage of Public Assets
c) Pilferage of Assets
45. False Invoices means _________.
a) the contractor or supplier submits invoices for goods that have not been
delievered.
b) the invoices do not properly represent the quantity or quality of goods and
services supplied.
c) the invoices do not properly represent the work done as per contracted
specifications.
d) All of the above

46. ________ means the contractor or supplier submits inflated invoices.
a) Inflated pricing
b) defective invoice
c) defective pricing
d) All of the above
47. _________ means contracts are awarded on the basis of vested interests of the
decision makers.
a) Conflict of interest
b) Conflict of contracts
c) Vested interests
48. ________ means contractors or suppliers form cartels to fix artificially high prices
for goods and services supplied by them.
a) Collusive or Cartel Bidding

b) High Price Bidding
c) Artificial Bidding
d) All of the above

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MSO audit mcq

2. Regulation on Audit & Accounts, 2007

powers conferred on him by _____________of C&AGs (DPC) Act, 1971.

c) an irregularity of serious nature involving public funds

d) All of the above

8. Auditors should ordinarily not become members of management committees

i) In the Audit Office

ii) In the office of the Auditable entity

iv) At such place as may be decided by audit.

a) (i) & (ii) above

c) (i) (ii) (iii) above

report on the accounts of the

(i) the audit office (ii) the accounts office

c) both (i) (ii) above

Union Territorys relating to contingency funds and Public accounts is derived

any office or department of the Union is derived from

d) Overall time frame

b) Section 14,15,19(1),19(2) and 19(3) of the DPC Act

c) Section 14,15,19(2) and 19(3), 19 A and 20 of the DPC Act

e) all of the above

(i) Chief executive officer of the body or authority

a) (i) above only

c) (ii) above only

legislative assembly is done under section ____ of DPC Act.

39. Audit arrears committee” shall be constituted by a corporation in case a large

40. The formation of a new Government Company or a deemed Government

d) None of the above

d) None of the above

b) (i), (ii) & (iv) above

b) Section 10 of DPC Act

c) Section 11 of DPC Act

relating to audit or accounts taken up by C&AG.

3. Auditing Standards issued by the CAG of India

Auditing Standards and apply them conscientiously in auditing for

a) These standards establish the norms which are applicable to all

consideration of the audit mandate and rules applicable to SAI

Reports of the CAG in relation to accounts of Union, State etc. are

e) All of the above

access to information about the SAI.

information or actual conditions conform to established criteria.

b) independent and objective assessments concerning the

c) reinforcing the effectiveness of those bodies that exercise

e) all of the above

information is presented in accordance with the applicable financial

include the Constitution, Acts, Laws, rules and regulations, budgetary

23. _________ focuses on whether interventions, programmes and

analyzed. The aim is to answer key audit questions and to provide

27. __________ are the individuals, organizations or classes thereof for

sufficient and appropriate audit evidence to support the audit

b) Subject Matter Information

the subject matter against the criteria

35. _____________ are always attestation engagements, as they are

39. A limited assurance conveys the limited nature of the assurance

d) all of the above

diligent(careful) manner. Auditors shall avoid any conduct that might

a) the direction, review and supervision of the audit process

reduced by its use of work done by other parties.

d) The audit may also aim to provide limited assurance, in which

50. A matter can be judged material if knowledge of it would be likely to

d) all of the above

d) The year in which the transaction is made

matters relating to the audit.