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. 81 Audit in depth is synonymous for_____________
   

   1. Complete audit

   2. Completed audit

   3. Final audit

   4. Detailed audit

   See Answer

   Added By: Ak Aamir

   Answer

   : Detailed audit

   Explanation

   :
   N/A

2. 82 Balance sheet audit includes verification of____________
   

   1. Assets

   2. Income and expense accounts where appropriate

   3. Liabilities

   4. All of the above

   See Answer

   Added By: Ak Aamir

   Answer

   : All of the above

   Explanation

   :
   N/A

3. 83 Which of the following statements is not true about continuous audit
   

   1. It is conducted at regular interval

   2. It may be carried out on daily basis

   3. It is needed when the organization has a good internal control system

   4. It is expensive

   See Answer

   Added By: Ak Aamir

   Answer

   : It is needed when the organization has a good internal control system

   Explanation

   :
   N/A

4. 84 Balance sheet does not include:_____________
   

   1. Verification of assets and liabilities

   2. Vouching of income and expense accounts related to assets and liabilities

   3. Examination of adjusting and closing entries

   4. Routine checks

   See Answer

   Added By: Ak Aamir

   Answer

   : Routine checks

   Explanation

   :
   N/A

5. 85 Which of the following statements is not correct about materiality
   

   1. Materiality is a relative concept

   2. Materiality judgments involve both quantitative and qualitative judgments

   3. Auditors consideration of materiality is influenced by the auditors perception of the needs of an informed decision maker who will rely on the financial statements

   4. At the planning state, the auditor considers materiality at the financial statement level only

   See Answer

   Added By: Ak Aamir

   Answer

   : At the planning state, the auditor considers materiality at the financial statement level only

   Explanation

   :
   N/A

6. 86 _______the audit risk,_______the materiality and _______the audit effort
   

   1. Lower, Higher, Lower

   2. Lower, Lower, Higher

   3. Higher, Lower, Lower

   4. Lower, Higher, Higher

   See Answer

   Added By: Ak Aamir

   Answer

   : Lower, Higher, Lower

   Explanation

   :
   N/A

7. 87 When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the_____________
   

   1. Amount of known misstatement is documented in working papers

   2. Estimates of the total likely misstatement is less than materiality level

   3. Estimate of the total likely misstatement is more than materially level

   4. Estimates of the total likely misstatement cannot be made

   See Answer

   Added By: Ak Aamir

   Answer

   : Estimates of the total likely misstatement is less than materiality level

   Explanation

   :
   N/A

8. 88 In determining the level of materiality for an audit, what should not be considered
   

   1. Prior years errors

   2. The auditors remuneration

   3. Adjusted interim financial statements

   4. Prior years financial statements

   See Answer

   Added By: Ak Aamir

   Answer

   : The auditors remuneration

   Explanation

   :
   N/A

9. 89 Analytical procedures issued in the planning stage of an audit, generally
   

   1. helps to determine the nature, timing and extent of other audit procedures

   2. directs attention to potential risk areas

   3. indicates important aspects of business

   4. All of the above

   See Answer

   Added By: Ak Aamir

   Answer

   : All of the above

   Explanation

   :
   N/A

10. 90 Which of the following statements is most closely associated with analytical procedure applied at substantive stage
    

    1. It helps to study relationship among balance sheet accounts

    2. It helps to discover material misstatements in the financial statements

    3. It helps to identify possible oversights

    4. It helps to accumulate evidence supporting the validity of a specific account balance

    See Answer

    Added By: Ak Aamir

    Answer

    : It helps to accumulate evidence supporting the validity of a specific account balance

    Explanation

    :
    N/A