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Thursday, October 29, 2020

Types of Auditing MCQs | Auditing MCQs | Auditing Multiple Choice Questions and Answers

 Various Types of Auditing
Auditing MCQs (Multiple Choice Questions and Answers)

1. When audit is conducted at regular intervals or irregular intervals throughout the year, it is called:

a)      Statutory Audit

b)      Internal Audit

c)       Interim Audit

d)      Continuous Audit

2. Audit at the end of the year is known as:

a)      Periodical audit

b)      Standard audit

c)       Efficiency audit

d)      Operational audit

3. An audit, which is conducted between two annual audits is known as:

a)      Periodical audit

b)      Standard audit

c)       Interim audit

d)      Operational audit

4. The audit which is not a statutory requirement, but is conducted at the desire of owners, is known as:

a)      Private audit

b)      Balance sheet audit

c)       Operational Audit

d)      Efficiency audit

[Private audit is conducted mainly by Sole traders, firms, BOI etc]

5. Audit of government offices and departments is known as:

a)      Tax audit

b)      Periodical audit

c)       Government audit

d)      Efficiency audit

6. Government audit is conducted by the department maintained by government of India is known as:

a)      Cost and Audit Department

b)      Accounts and Audit Department

c)       Tax and Audit Department

d)      GST and Audit Department

7. Accounts and audit department is headed by:

a)      Ministry of finance

b)      Home Minister

c)       Comptroller and Auditor General of India

d)      Prime Minister

8. Audit of accounts by the staff of the business is known as:

a)      Statutory Audit

b)      Internal Audit

c)       Interim Audit

d)      Continuous Audit

9. Audit is Compulsory for:

a)      Companies

b)      Trust and Co-operative societies

c)       Companies formed under Special Act of Parliament

d)      All of the above

10. Statutory audit is also known as:

a)      Compulsory audit

b)      Financial Audit

c)       Financial statements audit

d)      All of the above

11. Continuous audit is suitable for organisations where:

a)      Business is very large and large numbers of transactions are needed to be checked.

b)      Audited statements are required immediately after the close of financial year.

c)       Banks

d)      All of the above.

12. Early detection of frauds and errors are possible in which type of audit?

a)      Statutory Audit

b)      Internal Audit

c)       Interim Audit

d)      Continuous Audit

13. Management audit is also known as:

a)      Efficiency audit

b)      Performance audit

c)       Propriety audit

d)      Standard audit

14. Management audit involves:

a)      Examination of organisational structure.

b)      Review the performance of each functions and department of the management.

c)       To help various levels of management in the effective discharge of their duties.

d)      All of the above.

15. Cost audit is compulsory for:

a)      Companies Specified under Table A and B

b)      Companies engaged in production of goods and services (regulated sector) and annual turnover is more than Rs. 25 crores for a single product.

c)       Companies engaged in production of goods and services (non regulated sector) and annual turnover is more than Rs. 35 crores for a single product.

d)      Overall turnover of the companies from all its products and services should be equal to or more than 35 Crore in the immediately preceding financial year.

e)      All of the above

16. Cost audit is not applicable to:

a)      Companies operating in SEZ.

b)      Companies whose revenue from export is more than 75%.

c)       Trading entities

d)      All of the above

17. Audit conducted to know whether or not books of accounts are maintained as per the Companies Act’ 2013:

a)      Performance audit

b)      Balance Sheet audit

c)       Secretarial audit

d)      Tax audit

18. Audit in depth is:

a)      Sample Checking.

b)      Complete checking.

19. Which audit is conducted to declare interim dividend?

a)      Internal audit

b)      Interim audit

c)       Balance sheet audit

d)      Periodical audit

20. Audit conducted to check whether the various activities of the organisation are carried out efficiently is known as:

a)      Internal audit

b)      Interim audit

c)       Balance sheet audit

d)      Performance audit

ALSO READ: AUDITING 200 MULTIPLE CHOICE QUESTIONS AND ANSWER (MCQS)

True or false plus fill in the blanks type questions and answers:

1.       The term “Internal audit” and “Interim audit” convey the same meaning.                     False

2.       Periodical audit is an external audit undertaken by an independent auditor.                True

3.       An internal auditor within the organisation undertakes interim audit.              True

4.       Internal audit may be done by independent auditor.              True

5.       Scope of duties and responsibilities of internal auditor is determined by the Companies Act’ 2013.   False, Management

6.       Compulsory audit is conducted by a practicing chartered accountant.                              True

7.       Continuous audit is expensive and not suitable for small organisation.                            True

8.       Continuous audit is suitable for all types of institutions.         False, suitable for small organisations

9.       Environmental audit is a process to review the effectiveness of environmental management.  True

10.   A successful energy management programme begins with a thorough energy audit.                               True

11.   Final audit is less expensive and suitable particularly for small-scale business concerns. (Final audit/Continuous audit)

12.   Continuous audit is compulsory for a banking organisation. (Periodical audit/Continuous audit)

13.   Internal audit facilitates the work of final audit. (Hampers/facilitates)

14.   Internal audit ascertains the degree of compliance with predetermined policies, plans and procedures.  (Interim audit/Internal audit)

15.   Balance sheet audit means verification of items appearing in the position statement. (Management/Balance sheet audit)

16.   Periodical Audit is suitable for small business organisations. (Periodical audit/Continuous audit)

 

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