A. A matter is material only if it changes the audit report
B. A matter is material if the auditor and the directors both decide that further work needs to be done in the area under question
C. A matter is material only if it affects directors’ emoluments
D. A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditors’ report
Auditing Mcqs
Auditing Mcqs | NTS, FPSC, PSC, TEST – important mcqs for senior auditor-test. Auditing MCQS, Accounting MCQS, Finance MCQS for Senior Auditor Test. Multiple Choice Questions and answers Audit MCQs are arranged to help you in assessing your basic concepts and to prepare for any audit test. Important Accounting and Auditing solved mcqs with answers and solution for test preparation. These questions may occur in recruitment exams.
The scope of internal audit is decided by the___________?
A. Shareholders
B. Management
C. Government
D. Law
An auditor should not accept a loan on favourable commercial terms from an audit client because of the threat to his or her independence. The threat would be a___________?
A. Self-interest threat
B. Self-review threat
C. Advocacy threat
D. Familiarity threat
Why do auditors concentrate their efforts on material items in accounts?
A. Because they are easier to audit
B. Because it reduces the audit time
C. Because the risk to the accounts of their being incorrectly stated is greater
D. Because the directors have asked for it
Which of the following statements is not true?
A. Management fraud is more difficult to detect than employee fraud
B. Internal control system reduces the possibility of occurrence of employee fraud and management fraud
C. The auditor’s responsibility for detection and prevention of errors and frauds is similar.
D. All statements are correct.
Which of the following will not lead to creation of secret reserve?
A. Undervaluation of closing stock
B. Charging capital expenditure to revenue
C. Goods sent on consignment being shown as actual sales
D. Charging higher rates of depreciation on fixed assets than actually required
For what minimum period should audit working papers be retained by audit firm?
A. For the time period the entity remains a client of the audit firm.
B. For a period of ten years
C. For a period auditor opines them to be useful in servicing the client
D. For the period the audit firm is in existence.
Audit of banks is an example of_____________?
A. Statutory audit
B. Balance sheet audit
C. Concurrent audit
D. All of the above
Audit risk is composed of 3 factors. Which of the following is NOT one of those factors?
A. Compliance risk
B. Detection risk
C. Control risk
D. Inherent risk
Which of the following is a revenue reserve?
A. Capital redemption reserve
B. Security premium account
C. Debenture redemption reserve
D. Capital reserve
