Practice Pakistan's most useful MCQs for competitive exams

Which of the following is true about explanatory notes?

• (A)  These are given by the directors of the company
• (B)  These are given to adhere to requirements of section 211.
• (C)  These are given by auditors of the company in auditor’s report
• (D)  All of the above

Answer

Submitted By :Ali Uppal

The auditor has serious concern about the going concern of the company. It is dependent on company’s obtaining a working capital loan from a bank which has been applied for. The management of the company has made full disclosure of these facts in the notes to the balance sheet. The auditor is satisfied with the level of disclosure. He should issue___________?

• (A)  unqualified opinion
• (B)  unqualified opinion with reference to notes to the accounts
• (C)  qualified opinion
• (D)  disclaimer of opinion

Answer

Submitted By :Ali Uppal

When restrictions that significantly affect the scope of the audit are imposed by the client, the auditor generally should issue which of the following opinion?

• (A)  Qualified opinion
• (B)  Disclaimer of opinion
• (C)  Adverse opinion
• (D)  Unqualified report with ‘an emphasis of matter’ paragraph;

Answer

Submitted By :Ali Uppal

The date on auditor’s report should not be____________?

• (A)  the data of AGM
• (B)  later than the date on which the accounts are approved in board’s meeting
• (C)  earlier than the date on which the accounts are approved by the management
• (D)  Both

Answer

Submitted By :Ali Uppal

Auditor of a___________company does not have right to visit foreign branches of the company?

• (A)  Unlimited liability
• (B)  Manufacturing
• (C)  Banking
• (D)  Non­profit making

Answer

Submitted By :Ali Uppal

The branch auditor is appointed by___________?

• (A)  Shareholders in an annual general meeting
• (B)  Shareholders in general meeting
• (C)  Board of directors in board meeting
• (D)  Any of the above

Answer

Submitted By :Ali Uppal

The auditor has a right to­___________?

• (A)  Obtain information and explanation
• (B)  Obtain information and explanation from the employees and officers
• (C)  Obtain information and explanation necessary for the purpose of audit
• (D)  Both

Answer

Submitted By :Ali Uppal

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

Answer

Submitted By :Ali Uppal

Which of the following would you not use as a benchmark for comparison when undertaking analytical procedures?

• (A)  Other audit clients
• (B)  Previous years
• (C)  Other companies in the same industry
• (D)  Budget

Answer

Submitted By :Ali Uppal

What is meant by the expression ‘expectation gap’?

• (A)  The gap between how the directors of a company perform their duties and how the shareholders expect them to perform
• (B)  The gap between how the directors of a company perform their duties and how the general public expects them to perform
• (C)  The gap between the public perception of the role of company auditors and their statutory role and responsibilities
• (D)  The gap between the auditors’ own perception of their duties and how they are set out in the Companies Act

Answer

Submitted By :Ali Uppal