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.Management Sciences
Category: Auditing Mcqs
If the book value of an asset stands at________per cent of the original cost, a company need not provide depreciation on it.
A. two
B. fifteen
C. five
D. ten
When applying analytical procedures, an auditor could develop independent estimate of an account balance to compare it to___________?
A. client’s unedited account balance
B. client’s unedited account balance adjusted for trends in the industry
C. Prior year audited balance
D. Prior year audited balance adjusted for trends in the industry
Audit in depth is synonymous for_____________?
A. Complete audit
B. Completed audit
C. Final audit
D. Detailed audit
Which of the following statements is most closely associated with analytical procedure applied at substantive stage?
A. It helps to study relationship among balance sheet accounts
B. It helps to discover material misstatements in the financial statements
C. It helps to identify possible oversights
D. It helps to accumulate evidence supporting the validity of a specific account balance
Which of the following is not an advantage of the preparation of working paper?
A. To provide a basis for review of audit work
B. To provide a basis for subsequent audits
C. To ensure audit work is being carried out as per programme
D. To provide a guide for advising another client on similar issues
What sort of assurance is provided in a review engagement?
A. Positive assurance
B. Negative assurance
C. High level of assurance
D. No assurance
Which of the following is not an analytical procedure?
A. Tracing of purchases recurred in the purchase book to purchase invoices.
B. Comparing aggregate wages paid to number of employees
C. Comparing the actual costs with standard costs
D. All of them are analytical procedure
For companies required to produce interim financial statements (IFI):
A. one audit firm should audit the IFI and a different firm should audit the financial statements for the year as a whole.
B. one accountancy firm should review the IFI and a different firm should audit the financial statements for the year as a whole.
C. the same firm should audit the IFI and the financial statements for the year as a whole.
D. the same firm should review the IFI and the financial statements for the year as a whole.
The auditor’s permanent working paper file should not normally, include__________?
A. Extracts from client’s bank statements
B. Past year’s financial statements
C. Attorney’s letters
D. Debt agreements
Which of the following statements is, generally, correct about the reliability of audit evidence?
A. To be reliable, evidence should conclusive rather than persuasive
B. Effective internal control system provides reliable audit evidence
C. Evidence obtained from outside sources routed through the client
D. All are correct.
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