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. 111 If the book value of an asset stands at________per cent of the original cost, a company need not provide depreciation on it.
   

   1. two

   2. fifteen

   3. five

   4. ten

   See Answer

   Added By: Ak Aamir

   Answer

   : five

   Explanation

   :
   N/A

2. 112 Which of the following expenses should not be treated as capital expenditure
   

   1. Expenses paid on installation of a plant.

   2. Cost of dismantling a building in case a new building is to be constructed on the land

   3. Legal expenses incurred to defend a suit related to title of patent.

   4. The fees paid to engineer who constructed the plant.

   See Answer

   Added By: Ak Aamir

   Answer

   : Legal expenses incurred to defend a suit related to title of patent.

   Explanation

   :
   N/A

3. 113 Who is responsible for the appointment of statutory auditor of a limited company
   

   1. Directors of the company

   2. Members of the company

   3. The Central Government

   4. All of the above

   See Answer

   Added By: Ak Aamir

   Answer

   : Members of the company

   Explanation

   :
   N/A

4. 114 The board of directors shall appoint first auditor of a company
   

   1. With in one month of completion of capital subscription state of the company

   2. With in one month of the promotion of the company

   3. With in one month of the commencement of the business of the company

   4. With in one month of incorporation of the company

   See Answer

   Added By: Ak Aamir

   Answer

   : With in one month of incorporation of the company

   Explanation

   :
   N/A

5. 115 The term of the auditor ship of first auditor would be from the date of appointment till________
   

   1. the conclusion of statutory meeting

   2. the conclusion of first annual general meeting

   3. the conclusion of next annual general meeting

   4. the date of removal

   See Answer

   Added By: Ak Aamir

   Answer

   : the conclusion of first annual general meeting

   Explanation

   :
   N/A

6. 116 In case the directions fail to appoint first auditor (s), the shareholders shall appoint them at_________by passing a resolution.
   

   1. a general meeting

   2. first annual general meeting

   3. statutory meeting

   4. annual general meeting

   See Answer

   Added By: Ak Aamir

   Answer

   : a general meeting

   Explanation

   :
   N/A

7. 117 If a casual vacancy in the office of auditor arises by his resignation it should only be filled by the company in a_________
   

   1. Board meeting

   2. extraordinary general meeting

   3. General meeting

   4. annual general meeting

   See Answer

   Added By: Ak Aamir

   Answer

   : General meeting

   Explanation

   :
   N/A

8. 118 The authority to remove the first auditor before the expiry of term is with__________
   

   1. the shareholders in a general meeting

   2. the shareholders in the first annual General meeting

   3. the board of directors

   4. the Central Government

   See Answer

   Added By: Ak Aamir

   Answer

   : the shareholders in a general meeting

   Explanation

   :
   N/A

9. 119 Who out of the following cannot be appointed as a statutory auditor of the company
   

   1. Erstwhile director

   2. Internal auditor

   3. Relative of a director

   4. Only (B. and (C.

   See Answer

   Added By: Ak Aamir

   Answer

   : Internal auditor

   Explanation

   :
   N/A

10. 120 A statutory auditor has a right of access at all times to___________
    

    1. Books and accounts of a company

    2. Books, accounts and documents of the company

    3. Books, accounts and vouchers of the company

    4. Notices and documents of the company

    See Answer

    Added By: Ak Aamir

    Answer

    : Books, accounts and vouchers of the company

    Explanation

    :
    N/A