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3 views

TASK

Uploaded by

isshaqkone14
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© © All Rights Reserved
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TASK: Choose the correct answer in each case.

1-....... is a systematic examination of the books and records or a business


A. Auditing
B. Vouching.
C. Verification
D. Checking

2- The term Audit is derived from a Latin word audire which means..
A. To inspect
B. To examine
C. To hear
D. To investigate

3- The main object of an audit is.........


A. Expression of opinion
B. Detection and Prevention of fraud and error
C. Both (A) and (B)
D. Depends on the type of audit

4- An auditor like a........


A. Blood haunt
B. Watch dog
C. May both according to situation
D. None of these

5- Process of verifying the documentary evidences of transactions are known as.......…...


A. Auditing
B. Testing
C. Vouching
D. Verification

6- Auditing is compulsory for...


A. Small scale business
B. Partnership firms
C. Joint stock Companies
D. Proprietary Concecerns

7- Concealment of shortage by delaying the recording of cash receipts is known as.........


A. Embezzlement
B. Misappropriation
C. Lapping
D. None of these

8- The fundamental objective of the audit of a company is to....


A. Protect the interests of the minority shareholders
B. Detect and prevent errors and fraud
C. Assess the effectiveness of the company's performance
D. Attest to the credibility of the company's accounts
9- The concept of stewardship means that a company's directors
A. Are responsible for ensuring that the company complies with the law
B. Are responsible for ensuring that the company pays its tax by the due date
C. Safeguard the company's assets and manage them on behalf of the shareholders

10- Why do auditors concentrate their efforts on material items in accounts?


A. Because they are easier to audit
B. Because it reduces the audit time
C. Because the risk to the accounts of their being incorrectly stated is greater
D. Because the directors have asked for it.

11- The degree of effectiveness of an internal control system depends on:


A. The design of the internal control system and the implementation of the controls
B. The design of the internal controls and the implementation of the control system
C. The implementation of the controls and the correctness of the accounting records

12- International auditing standards are issued by the


A. International Accounting Standards Board
B. International Federation of Accountants
C. International Standards Board
D. Auditing Practices Board

13- Which of the following is not true about opinion on financial statements
A. The auditor should express an opinion on financial statements.
B. His opinion is no guarantee to future viability of business
C. He is responsible for detection and prevention of frauds and errors in financial statements
D. He should examine whether recognised accounting principle have been consistently

14- When an auditor is proposed for removal from office, authorities which one of the
following is he NOT permitted to do
A. Circulate representations to members
B. Apply to the court to have the proposal removed
C. Speak at the AGM/EGM where the removal is proposed
D. Receive notification of the AGM/EGM where the removal is proposed

15- Which one of the following is NOT a duty of the auditor


A.Duty to report to the companys bankers
B. Duty to report to the members
C. Duty to sign the audit report
D. Duty to report on any violation of law

16- Assuming that it is not the first appointment of the auditor, who is responsible for the
appointment of the auditor
A. The shareholders in a general meeting
B.The managing director
C. The board of directors in a board meeting
D. The audit committee

17- The independent auditors primary responsibility is to


A. the directors
B. the companys creditors (payables)
C. the companys bank
D. the shareholders

18- How long is the auditors term of office


A. Until the audit is complete
B. Until the financial statements are complete
C. Until the next AGM (Annual General Meeting)
D. Until the directors remove them

19- Which of the following is correct in relation to materiality


A. A matter is material only if it changes the audit report
B. A matter is material if the auditor and the directors both decide that further work needs to
be done in the area under question
C. A matter is material only if it affects directors' emoluments.
D. A matter is material if its omission or misstatement would reasonably influence the
decisions of an addressee of the auditor's report

20- Which of the following is normally the most reliable source of audit evidence
A. Internal audit
B. Suppliers statements
C. Board minutes
D. Analytical review

CORRECTION

1- A. Auditing
2- C. To hear
3- C. Both (A) and (B)
4- B. Watch dog
5- C. Vouching
6- C. Joint stock Companies
7- C. Lapping
8- B. Detect and prevent errors and fraud
9- C. Safeguard the company's assets and manage them on behalf of the shareholders
10- C. Because the risk to the accounts of their being incorrectly stated is greater
11- A. The design of the internal control system and the implementation of the controls
12- B. International Federation of Accountants
13- C. He is responsible for detection and prevention of frauds and errors in financial
statements
14- D. Receive notification of the AGM/EGM where the removal is proposed
15- A. Duty to report to the company's bankers
16- C. The board of directors in a board meeting
17- D. the shareholders
18- C. Until the next AGM (Annual General Meeting)
19- D. A matter is material if its omission or misstatement would reasonably influence the
decisions of an addressee of the auditor's report
20- D. Analytical review

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