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Auditing Mcqs

The degree of effectiveness of an internal control system depends on:

  • (A)  The design of the internal control system and the implementation of the controls
  • (B)  The design of the internal controls and the implementation of the control system
  • (C)  The implementation of the controls and the correctness of the accounting records
  • (D)  The design of the internal control system and the correctness of the accounting records
Submitted By :Ali Uppal


Which of the following is normally the most reliable source of audit evidence?

  • (A)  Internal audit
  • (B)  Suppliers’ statements
  • (C)  Board minutes
  • (D)  Analytical review
Submitted By :Ali Uppal


According to ISA 500, the strength of audit evidence is determined by which two qualities?

  • (A)  Appropriateness & competence
  • (B)  Sufficiency & appropriateness
  • (C)  Reliability & extensiveness
  • (D)  Objectivity & independence
Submitted By :Ali Uppal


Which of the following are you unlikely to see in the current file of auditors’ working papers?

  • (A)  Memorandum & articles of association
  • (B)  Audit planning memorandum
  • (C)  Summary of unadjusted errors
  • (D)  Details of the work done on the inventory count
Submitted By :Ali Uppal


Which of the following is NOT an accepted method of selection in sampling?

  • (A)  Systematic selection
  • (B)  Pervasive selection
  • (C)  Random selection
  • (D)  Haphazard selection
Submitted By :Ali Uppal


Which of the following describes sampling risk?

  • (A)  The risk of the auditor carrying out a test the wrong way round
  • (B)  The risk of reliance on unsuitable audit evidence
  • (C)  The risk that the sample does not reflect the population
  • (D)  The risk of the auditor reaching the wrong conclusions from testing
Submitted By :Ali Uppal


At the planning stage you would NOT consider____________?

  • (A)  the timing of the audit
  • (B)  whether corrections from the inventory count have been implemented
  • (C)  last year’s audit
  • (D)  the potential use of internal audit
Submitted By :Ali Uppal


Which of the following should NOT be considered at the planning stage?

  • (A)  The timing of the audit
  • (B)  Analytical review
  • (C)  Last year’s written representation letter
  • (D)  Obtaining written representations
Submitted By :Ali Uppal


Audit risk is composed of 3 factors. Which of the following is NOT one of those factors?

  • (A)  Compliance risk
  • (B)  Detection risk
  • (C)  Control risk
  • (D)  Inherent risk
Submitted By :Ali Uppal


Which one of the following is NOT considered to be part of planning?

  • (A)  Background i.e. industry
  • (B)  Previous year’s audit i.e. any qualifications in the report
  • (C)  Considering the work to be done by the client staff e.g. internal audit
  • (D)  Considering whether the financial statements show a true and fair view
Submitted By :Ali Uppal