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.Management Sciences
Category: Auditing Mcqs
Process of verifying the documentary evidences of transactions are known as___________?
A. Auditing
B. Testing
C. Vouching
D. Verification
Which of the following statement is true regarding an auditor’s working papers?
A. They document the level of independence maintained by the auditor
B. They should be considered as the principle support for the auditor’s report
C. They should not contain details regarding weaknesses in the internal control system
D. They help the auditor to monitor the effectiveness of the audit firm’s quality control
Verification refers to_________?
A. Examining the physical existence and valuation of assets.
B. Examining the journal and ledger
C. Examination of vouchers related to assets.
D. None of the above.
Of the following, which is the least persuasive type of audit evidence?
A. Bank statements obtained from the client
B. Documents obtained by auditor from third parties directly.
C. Carbon copies of sales invoices inspected by the auditor
D. Computations made by the auditor
Which of the following is true about written representations?
A. They are the best source of audit evidence
B. They should be used only when there is a lack of other substantive audit evidence
C. They should be used only when there is other substantive audit evidence to complement it
D. Shareholders receive a copy of all material written representations
According to ISA 315, which of the following is NOT a control activity?
A. Performance reviews
B. Physical controls
C. Organizational structure
D. Segregation of duties
When is evidential matter, generally, considered sufficient?
A. When it constitutes entire population
B. When it is enough to provide a basis for giving reasonable assurance regarding truthfulness
C. When it is objective and relevant
D. When auditor collects and evaluates it independently
What would most appropriately describe the risk of incorrect rejection in terms of substantive testing?
A. The auditor concludes balance is materially correct when in actual fact it is not
B. The auditor concludes that the balance is materially misstated when in actual fact it not
C. The auditor has rejected an item for sample which was material
D. None of the above
Which of the following is correct in relation to materiality?
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
The scope of internal audit is decided by the___________?
A. Shareholders
B. Management
C. Government
D. Law
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