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

Answer

Submitted By :Ali Uppal

To test whether sales have been recorded, the auditor should draw a sample from a file of__________?

• (A)  purchase orders
• (B)  sales orders
• (C)  sales invoices
• (D)  bill of loading

Answer

Submitted By :Ali Uppal

Which of the following documents is not relevant for vouching cash sales?

• (A)  Daily cash sales summary
• (B)  Salesmen’s summary
• (C)  Monthly statements sent to customers
• (D)  Bank statement

Answer

Submitted By :Ali Uppal

The client changed method of depreciation from straight line to written down value method. This has been disclosed as a note to the financial statements. It has an immaterial effect on the current financial statements. It is expected, however, that the change will have a significant effect on future periods. Which of the following option should the auditor express?

• (A)  Unqualified opinion
• (B)  Qualified opinion
• (C)  Disclaimer of opinion
• (D)  Adverse opinion

Answer

Submitted By :Ali Uppal

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