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Auditing Mcqs

The nature, timing and extent of substantive procedures is related to assessed level of control risk

  • (A)  Randomly
  • (B)  Disproportionately
  • (C)  Directly
  • (D)  Inversely
Submitted By :Ali Uppal


In an audit of financial statements, substantive tests are audit procedures that __________?

  • (A)  May be eliminated for an account balance under certain conditions
  • (B)  Are designed to discover significant subsequent events
  • (C)  Will increase proportionately when the auditor decreases the assessed level of control risk
  • (D)  May be test of transactions, test of balance and analytical procedures
Submitted By :Ali Uppal


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.
Submitted By :Ali Uppal


Of the following, which is the least persuasive type of audit evidence?

  • (A)  Bank statements obtained from the client
  • (B)  Documents obtained by auditor from third parties directly.
  • (C)  Carbon copies of sales invoices inspected by the auditor
  • (D)  Computations made by the auditor
Submitted By :Ali Uppal


Goods sold on the basis of ‘sales or return ‘ should:

  • (A)  Be included in the stock
  • (B)  Not be included in the stock
  • (C)  Not be checked by auditor
  • (D)  None of the above
Submitted By :Ali Uppal


Floating assets are valued at____________?

  • (A)  cost
  • (B)  Market price
  • (C)  Cost or market price whichever is lower
  • (D)  Cost less depreciation
Submitted By :Ali Uppal


Stock should be valued at_________?

  • (A)  Cost
  • (B)  Market price
  • (C)  Cost or Market price whichever is lower.
  • (D)  Cost less depreciation.
Submitted By :Ali Uppal


Verification refers to_________?

  • (A)  Examining the physical existence and valuation of assets.
  • (B)  Examining the journal and ledger
  • (C)  Examination of vouchers related to assets.
  • (D)  None of the abov
Submitted By :Ali Uppal


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
Submitted By :Ali Uppal


Analytical procedures issued in the planning stage of an audit, generally

  • (A)  Helps to determine the nature, timing and extent of other audit procedures
  • (B)  Directs attention to potential risk areas
  • (C)  Indicates important aspects of business
  • (D)  All of the above
Submitted By :Ali Uppal