Practice Pakistan's most useful MCQs for competitive exams

What would most effectively describe the risk of incorrect acceptance in terms of substantive audit testing?

• (A)  The auditor has ascertained that the balance is materially correct when in actual fact it is not
• (B)  The auditor concludes the balance is materially misstated when in actual fact is not
• (C)  The auditor has rejected an item from sample which was not supported by documentary evidence
• (D)  He applies random sampling on data which is inaccurate and inconsistent

Answer

Submitted By :Ali Uppal

Which of the following affects audit effectiveness?

• (A)  Risk of over reliance
• (B)  Risk of incorrect rejection
• (C)  Risk of incorrect acceptance
• (D)  Both A and C

Answer

Submitted By :Ali Uppal

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

Answer

Submitted By :Ali Uppal

Which of the following is not corroborative evidence?

• (A)  Minutes of meetings
• (B)  Confirmations from debtors
• (C)  Information gathered by auditor through observation
• (D)  Worksheet supporting consolidated financial statements

Answer

Submitted By :Ali Uppal

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

Answer

Submitted By :Ali Uppal

Which of the following factors is most important in determining the appropriations of audit evidence?

• (A)  The reliability of audit evidence and its relevance in meeting the audit objective
• (B)  The objectivity and integrity of the auditor
• (C)  The quantity of audit evidence
• (D)  The independence of the source of evidence

Answer

Submitted By :Ali Uppal

In Pakistan, balance sheet audit is synonymous to___________?

• (A)  Annual audit
• (B)  Continuous audit
• (C)  Detailed audit
• (D)  Statutory audit

Answer

Submitted By :Ali Uppal

Audit of banks is an example of__________?

• (A)  Statutory audit
• (B)  Balance sheet audit
• (C)  Concurrent audit
• (D)  Both (

Answer

Submitted By :Ali Uppal

Auditing is what?

• (A)  Reporting the financial information
• (B)  Examination of financial statements
• (C)  Preparation financial statements
• (D)  maintaining the ledger records

Answer

Submitted By :Ali Uppal

The current file of the auditor’s working papers, generally, should include____________?

• (A)  A flowchart of the internal controls
• (B)  Organisation charts
• (C)  A copy of financial statements
• (D)  Copies of bond and debentures

Answer

Submitted By :Ali Uppal