Auditing MCQs with Answers

A. purchase orders
B. sales orders
C. sales invoices
D. bill of loading

A. identify cases of unrecorded revenue
B. ensure proper disclosure in the balance sheet
C. recompute accrued income on the data of balance sheet
D. Any of these

A. The auditor cannot give an opinion due to lack of evidence.
B. The client’s financial statements were found to be materially misstated.
C. The auditor could not conduct any tests due to lack of controls.
D. The auditor did not find anything to indicate that a material misstatement exists.

A. one audit firm should audit the IFI and a different firm should audit the financial statements for the year as a whole.
B. one accountancy firm should review the IFI and a different firm should audit the financial statements for the year as a whole.
C. the same firm should audit the IFI and the financial statements for the year as a whole.
D. the same firm should review the IFI and the financial statements for the year as a whole.

A. When a company negotiates a ‘friendly’ takeover, it usually appoints a firm of accountants to carry out due diligence on the takeover target.
B. In an attestation engagement, the accountant is required to report on the quality of work performed.
C. In a review engagement, evidence is gathered mainly by means of computation and inspection.
D. In an engagement to review financial statements, the amount of work required is the same as for an audit

A. Positive assurance
B. Negative assurance
C. High level of assurance
D. No assurance

A. Conducting the inventory count
B. Obtaining and evaluating audit evidence on the financial statements
C. Calculating the year-end accruals figure for inclusion in the accounts
D. Providing representations to management

A. Introductory paragraph specifying the pages to which the report relates and the accounting convention adopted
B. Basis of the opinion
C. Involvement of any specialist
D. Statement of responsibilities of directors and auditors

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

A. Other audit clients
B. Previous years
C. Other companies in the same industry
D. Budget