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. 71 Which of the following is not an advantage of the preparation of working paper
   

   1. To provide a basis for review of audit work

   2. To provide a basis for subsequent audits

   3. To ensure audit work is being carried out as per programme

   4. To provide a guide for advising another client on similar issues

   See Answer

   Added By: Ak Aamir

   Answer

   : To provide a guide for advising another client on similar issues

   Explanation

   :
   N/A

2. 72 The auditors permanent working paper file should not normally, include__________
   

   1. Extracts from clients bank statements

   2. Past years financial statements

   3. Attorneys letters

   4. Debt agreements

   See Answer

   Added By: Ak Aamir

   Answer

   : Extracts from clients bank statements

   Explanation

   :
   N/A

3. 73 For what minimum period should audit working papers be retained by audit firm
   

   1. For the time period the entity remains a client of the audit firm.

   2. For a period of ten years

   3. For a period auditor opines them to be useful in servicing the client

   4. For the period the audit firm is in existence.

   See Answer

   Added By: Ak Aamir

   Answer

   : For a period auditor opines them to be useful in servicing the client

   Explanation

   :
   N/A

4. 74 Which of the following factors would least likely affect the quantity and content of an auditors working papers
   

   1. The assessed level of control risk

   2. The possibility of peer review

   3. The nature of auditors report

   4. The content of management representation letter

   See Answer

   Added By: Ak Aamir

   Answer

   : The content of management representation letter

   Explanation

   :
   N/A

5. 75 Which of the following statement is true regarding an auditors working papers
   

   1. They document the level of independence maintained by the auditor

   2. They should be considered as the principle support for the auditors report

   3. They should not contain details regarding weaknesses in the internal control system

   4. They help the auditor to monitor the effectiveness of the audit firms quality control

   See Answer

   Added By: Ak Aamir

   Answer

   : They should be considered as the principle support for the auditors report

   Explanation

   :
   N/A

6. 76 Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor
   

   1. The working papers may be obtained by third parties when they appear to be relevant to issues raised in litigation

   2. The safe custody of working papers is the responsibility of client, if kept at his premises

   3. The working papers must be retained by an audit firm for a period of 10 years

   4. Successor auditors may have access to working papers of the predecessor auditors. The approval of client is not required.

   See Answer

   Added By: Ak Aamir

   Answer

   : The working papers may be obtained by third parties when they appear to be relevant to issues raised in litigation

   Explanation

   :
   N/A

7. 77 The current file of the auditors working papers, generally, should include____________
   

   1. A flowchart of the internal controls

   2. Organisation charts

   3. A copy of financial statements

   4. Copies of bond and debentures

   See Answer

   Added By: Ak Aamir

   Answer

   : A copy of financial statements

   Explanation

   :
   N/A

8. 78 Auditing is what
   

   1. Reporting the financial information

   2. Examination of financial statements

   3. Preparation financial statements

   4. maintaining the ledger records

   See Answer

   Added By: Ak Aamir

   Answer

   : Examination of financial statements

   Explanation

   :
   N/A

9. 79 Audit of banks is an example of__________
   

   1. Statutory audit

   2. Balance sheet audit

   3. Concurrent audit

   4. Both (and (B.

   5. All of the above

   See Answer

   Added By: Ak Aamir

   Answer

   : All of the above

   Explanation

   :
   N/A

10. 80 In Pakistan, balance sheet audit is synonymous to___________
    

    1. Annual audit

    2. Continuous audit

    3. Detailed audit

    4. Statutory audit

    See Answer

    Added By: Ak Aamir

    Answer

    : Annual audit

    Explanation

    :
    N/A