M.COM
PART 2

AUDITING

1. An audit is the _________ examination of
financial information.

a. independent.

b. dependent

c. accurate

d. correct.

ANS: A

 

2. The auditor is required to express his
opinion on the financial statements at the end of the audit based on the
_________ obtained during the course of the audit.

a. audit planning.

b audit objective.

c. audit evidence.

d. books of accounts.

ANS: C

 

3. __________ are innocent mistakes.

a. errors

b. frauds.

c. mistakes.

d. observations.

ANS: A

 

4.__________ is a type of fraud.

a. error of principle

b. error of omission.

c. mis-appropriation of stocks.

d. compensating errors.

ANS: C

 

5._________ is a type of external evidence.

a. minute books.

b. sales invoices.

c. inventory invoices.

d. bank balance confirmation.

ANS: D

 

6._____________ is a type of internal evidence.

a. minute books

b. debtors balance confirmation.

c. insurance policy

d. bank balance confirmation.

ANS: A

 

7. When the effect of one error is compensated
by another error _______ error is said to have occurred.

a. compensating

b. principle

c. casting

d. omission.

ANS: A

 

8. An error of ________ occurs when a
transaction is recorded twice in the books of original entry.

a. compensating

b. principle

c. duplication

d. omission.

ANS: C

 

9. __________ is the Central Bank of India.

a. RBI.

b. SBI

c. Imperial

d. Federal

ANS: A

 

10. A bank is an Institution which accepts
deposits and give ________.

a. loans.

b. salaries

c. revenue

d. costs.

ANS: A

 

11. An ________, also called an audit plan, is
an action plan that documents and procedures, an auditor, will follow to
validate that an Organization is in conformance with compliance regulations.

a. Audit programme.

b. Audit evidence

c. Audit notebook

d. Audit working papers.

ANS: A

 

12. ICAI the full form is __________________.

a. Institute of Chartered Accountants of India.

b. Institute of Cost Accountants of India.

c. Institute of Company Secretary of India.

d. Institute of Compliance Accountants of India.

ANS: A

 

13. Primary of objective of Audit
__________________.

a. True and Fair View of Accounts.

b. Detection of Erors

c. Prevention of Errors

d. Prepare and Audit Plan

ANS: A

 

14.Secondary of objective of Audit
__________________.

a. Detection & Prevention of Errors.

b. True and Fair view of Accounts

c. Balance Confirmation

d. Prepare and Audit Plan

ANS: A

 

15.Sales invoice is ____________- type of Audit
Evidence

a. Internal

b. External

c. Permanent

d. Temporary

ANS: A

 

16. An information is ___________ if its
misstatement could influence the economic decision of users.

a. important

b. material

c. document

d. evidence.

ANS: B

 

17. The _________ need to know that the funds
they have provided to the business would be repaid on the due dates with agreed
rate of interest.

a. Purchaser

b. Lenders.

c. Customers.

d. Clients.

ANS: B

 

18. ________________ is analytical and
systematic examination of books of accounts of business.

a. accounting

b. audit

c. investigation

d. evidence.

ANS: B

 

19. The term ________ refers to an
unintentional mistake occurred in the financial statements.

a. mistake

b. error

c. fraud

d. mis-statement.

ANS: B

 

20. An _______ is a book in which a large
variety of matters observed during the course of audit are recorded by the
audit team.

a. audit paper

b. audit check list

c. audit note book.

d. audit observation.

ANS: C

 

21. Audit is ________ to the books of accounts.

a. limited.

b. not limited

c. investigation

d. verification.

ANS: B

 

22. Regular audit of banks process is known as
___________.

a. statutory audit.

b. internal.

c. concurrent

d. stock.

ANS: C

 

23. ____________________ report indicates that
the auditor is not satisfied in respect of all material facts.

a. Un qualified

b. Qualified.

c. Restricted

d. Favorable.

ANS: B

 

24. Audit is a critical review of the system of
accounting and _________ controls.

a. external

b. internal

c. neutral

d. inventory.

ANS: B

 

25. __________ is specific and non recurring
assignment.

a. Audit

b. Statutory audit.

c. Investigation.

d. External audit.

ANS: C

 

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