Auditing MCQs with Answers

This is Auditing MCQs section with detailed explanations for preparation of screening tests, interviews for government jobs. In this section candidate will learn MCQs on variety of topics from the subject.

1. 1 ____________ is a systematic examination of the books and records or a business
   

   1. Auditing

   2. Vouching

   3. Verification

   4. Checking

   See Answer

   Added By: Ak Aamir

   Answer

   : Auditing

   Explanation

   :
   N/A

2. 2 The term Audit is derived from a Latin word audire which means___________
   

   1. To inspect

   2. To examine

   3. To hear

   4. To investigate

   See Answer

   Added By: Ak Aamir

   Answer

   : To hear

   Explanation

   :
   N/A

3. 3 The main object of an audit is _____________
   

   1. Expression of opinion

   2. Detection and Prevention of fraud and error

   3. Both (A) and (B)

   4. Depends on the type of audit.

   See Answer

   Added By: Ak Aamir

   Answer

   : Depends on the type of audit.

   Explanation

   :
   N/A

4. 4 An auditor is like a_______________
   

   1. Blood haunt

   2. Watch dog

   3. May both according to situation

   4. None of these

   See Answer

   Added By: Ak Aamir

   Answer

   : Watch dog

   Explanation

   :
   N/A

5. 5 Process of verifying the documentary evidences of transactions are known as___________
   

   1. Auditing

   2. Testing

   3. Vouching

   4. Verification

   See Answer

   Added By: Ak Aamir

   Answer

   : Vouching

   Explanation

   :
   N/A

6. 6 Auditing is compulsory for____________
   

   1. Small scale business

   2. Partnership firms

   3. Joint stock Companies

   4. Proprietary Concerns

   See Answer

   Added By: Ak Aamir

   Answer

   : Joint stock Companies

   Explanation

   :
   N/A

7. 7 Concealment of shortage by delaying the recording of cash receipts is known as_____________
   

   1. Embezzlement

   2. Misappropriation

   3. Lapping

   4. None of these

   See Answer

   Added By: Ak Aamir

   Answer

   : Lapping

   Explanation

   :
   N/A

8. 8 The fundamental objective of the audit of a company is to_____________
   

   1. Protect the interests of the minority shareholders

   2. Detect and prevent errors and fraud

   3. Assess the effectiveness of the companys performance

   4. Attest to the credibility of the companys accounts

   See Answer

   Added By: Ak Aamir

   Answer

   : Attest to the credibility of the companys accounts

   Explanation

   :
   N/A

9. 9 The concept of stewardship means that a companys directors________________
   

   1. Are responsible for ensuring that the company complies with the law

   2. Are responsible for ensuring that the company pays its tax by the due date

   3. Safeguard the companys assets and manage them on behalf of the shareholders

   4. Report suspected fraud and money laundering to the authorities

   See Answer

   Added By: Ak Aamir

   Answer

   : Safeguard the companys assets and manage them on behalf of the shareholders

   Explanation

   :
   N/A

10. 10 Why do auditors concentrate their efforts on material items in accounts
    

    1. Because they are easier to audit

    2. Because it reduces the audit time

    3. Because the risk to the accounts of their being incorrectly stated is greater

    4. Because the directors have asked for it

    See Answer

    Added By: Ak Aamir

    Answer

    : Because the risk to the accounts of their being incorrectly stated is greater

    Explanation

    :
    N/A