MCQs 1: ____________ is a systematic examination of the books and records or a business?
MCQs 2: The term ‘Audit’ is derived from a Latin word “audire” which means___________?
MCQs 3: The main object of an audit is _____________?
Expression of opinion
Detection and Prevention of fraud and error
Both (A) and (B)
Depends on the type of audit.
MCQs 4: An auditor is like a_______________?
MCQs 5: Process of verifying the documentary evidences of transactions are known as___________?
MCQs 6: Auditing is compulsory for____________?
MCQs 7: Concealment of shortage by delaying the recording of cash receipts is known as_____________?
MCQs 8: The fundamental objective of the audit of a company is to_____________?
Protect the interests of the minority shareholders
Detect and prevent errors and fraud
Assess the effectiveness of the company’s performance
Attest to the credibility of the company’s accounts
MCQs 9: The concept of stewardship means that a company’s directors________________?
Are responsible for ensuring that the company complies with the law
Are responsible for ensuring that the company pays its tax by the due date
Safeguard the company’s assets and manage them on behalf of the shareholders
Report suspected fraud and money laundering to the authorities
MCQs 10: Why do auditors concentrate their efforts on material items in accounts?
Because they are easier to audit
Because it reduces the audit time
Because the risk to the accounts of their being incorrectly stated is greater
Because the directors have asked for it
MCQs 11: Which of the following is NOT the responsibility of a company’s directors?
Reporting to the shareholders on the accuracy of the accounts
Establishment of internal controls
Keeping proper accounting records
Supplying information and explanations to the auditor
MCQs 12: International auditing standards are issued by the______________?
International Accounting Standards Board
International Federation of Accountants
International Standards Board
Auditing Practices Board
MCQs 13: Which of the following is not true about opinion on financial statements?
The auditor should express an opinion on financial statements
His opinion is no guarantee to future viability of business
He is responsible for detection and prevention of frauds and errors in financial statements
He should examine whether recognised accounting principle have been consistently
MCQs 14: When an auditor is proposed for removal from office, which one of the following is he NOT permitted to do?
Circulate representations to members
Apply to the court to have the proposal removed
Speak at the AGM/EGM where the removal is proposed
Receive notification of the AGM/EGM where the removal is proposed
MCQs 15: Which one of the following is NOT a duty of the auditor?
Duty to report to the company’s bankers
Duty to report to the members
Duty to sign the audit report
Duty to report on any violation of law
MCQs 16: Assuming that it is not the first appointment of the auditor, who is responsible for the appointment of the auditor?
The shareholders in a general meeting
The managing director
The board of directors in a board meeting
The audit committee
MCQs 17: The independent auditor’s primary responsibility is to______________?
MCQs 18: How long is the auditor’s term of office?
Until the audit is complete
Until the financial statements are complete
Until the next AGM (Annual General Meeting)
Until the directors remove them
MCQs 19: Which of the following is correct in relation to materiality?
A matter is material only if it changes the audit report
A matter is material if the auditor and the directors both decide that further work needs to be done in the area under question
A matter is material only if it affects directors’ emoluments
A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditors’ report
MCQs 20: Which one of the following is NOT considered to be part of planning?
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