Auditing MCQs with Answers

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

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. It helps the auditor to study relationship among elements of financial information

B. Relationship among data exist and continue in the absence of known condition to the contrary

C. Analytical procedures will not be able to detect unusual relationships

D. None of the above.

A. Substantive tests designed to assess control risk

B. Substantive tests designed to evaluate the validity of management’s representation letter

C. Substantive tests designed to study relationships between financial and non­financial

D. All of the above

A. Tracing of purchases recurred in the purchase book to purchase invoices.

B. Comparing aggregate wages paid to number of employees

C. Comparing the actual costs with standard costs

D. All of them are analytical procedure

A. client’s unedited account balance

B. client’s unedited account balance adjusted for trends in the industry

C. Prior year audited balance

D. Prior year audited balance adjusted for trends in the…

A. To help to corroborate the conclusions drawn from individual components of financial statements

B. To reduce specific detection risk

C. To direct attention to potential risk areas

D. To satisfy doubts when questions arise about a client’s…

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

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…

A. randomly

B. disproportionately

C. directly

D. inversely