AUDITING

================================================================

Written by
Sudireddy Narendar Reddy
Assistant Professor
Govt.Degree & P.G.College
Mancherial
Dist: Adilabad
Telangana State, INDIA
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sudireddy.narendarreddy

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Description of the Auditing Book :

This book contains 352 objective type questions from different chapters
of Auditing only.
This book is useful for all competitive exams where objective questions
from auditing are asked. It is useful for competitive exams like staff
selection commission, BSNLJAO, APGENCO AO, Junior lecturers,
Degree Lecturers, UGC NET.
Why you buy this book ?
Any one buy this book because it contains objective type question useful
for competitive examinations.
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========================================

INTRODUCTION
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----------------------------
1Q)auditing originated due to necessity of checking which of the
following
transactions?
a)fixed assets transactions
b)fluctuating assets transactions
c)liabilities transactions
d)monetary transactions
2Q)in ancient India, auditing is confined to which of the following
accounts only? (b)
a)private accounts
b)public accounts
c)both
d)none
3Q)in ancient days, according to records which of the following people
audited their
public
accounts?
a)Egyptians
b)Greeks
c)Romans
d)all of the above
4Q)double entry system of book keeping was invented by
? (a)
a)luca paciolo ,an Italian
b)luca paciolo , an English man
c)luca paciolo , an American
d)none
5Q)luca paciolo invented double entry system in which year
? (c)
a)1594
b)1349
c)1494
d)none
6Q)luca paciolo described which of the
following? (c)
a)duties of auditor
b)responsibilities of auditor
c)both
d)none
7Q)the management and owner were separated with which of the
following? (b)
a)French revolution
b)industrial revolution
c)mercantilism
d)none

8Q)which of the following indian acts prescribed qualifications of an

auditors
for the first
time?
a)Indian companies act 1856
b)Indian companies act 1933
c)Indian companies act 1913
d)none
9Q)which of the following act made it compulsory for every company to
audit
its accounts once in every year
? (b)
a)Indian companies act 1933
b)Indian companies act 1913
c)Indian companies act 1953
d)none
10Q)which provincial government started first time diploma in
accountancy? (c)
a)madras government
b)Calcutta government
c)Bombay government
d)none
11Q)which of the following made possible to pass control over
accountancy (a)
profession to central government?
a)auditors certificate rules 1932
b)Indian companies act 1913
c)both
d)none
12Q)uniform standards in accounting and auditing were made with
which of the
following?
a)Indian companies act 1913
b)Indian companies act 1933
c)auditors certificate rules 1932
d)none
13Q)chartered accountants act was passed in which of the following year
? (b)
a)1948
b)1949
c)1939
d)none
14Q)ICAI was established on
? (b)
a)august 1 1949
b)July 1 1949
c)October 1 1949
d)none

15Q)ICWAI was established in which year

? (b)
a)1949
b)1959
c)1969
d)none
16Q) the word "audit" is derived
from? (c)
a)French word
b)English word
c)Latin word
d)none
17Q)art of recording day to day transactions in the accounts books is
known as ? (a)
a)book keeping
b)accountancy
c)auditing
d)all of the above
18Q)the job of book keeper involves
? (d)
a)journalizing
b)posting
c)totaling and balancing of ledger accounts
d)all of the above
19Q)the financial position of a company is shown better than what it is.
this method(b)
is known as?
a)good dressing
b)window dressing
c)manipulation
d)none
20Q)errors are classified into how many
categories? (a)
a) five categories
b) four categories
c) three categories
d) two categories
21Q)principles of book keeping and accountancy are not followed. such
errors (c)
are called?
a)errors of omission
b)errors of duplication
c)errors of principles
d)compensating errors
22Q)treatment of revenue expenditure as capital expenditure and capital
expenditure as
revenue expenditure is known as
? (b)
a)errors of omission
b)errors of principles
c)compensating errors
d)none
23Q)which of the following are examples of errors of
principles? (d)
a)providing less or excess depreciation
b)under or over valuation of stock
c)excess provision for doubtful debts
d)all of the above
24Q)errors of principles are not disclosed by trial
balance? (a)
a)yes
b)no
c)none
25Q)errors of principles affect reliability of profit and loss and balance
sheet? (a)
a)yes
b)no
c)none
26Q)transactions are omitted fully or partially from accounts books is
known as ? (b)
a)errors of principle
b)errors omission
c)errors duplication
d)none
27Q)when a transaction totally omitted from account books. will it affect
trial
balance?
a)yes
b)no
c)both
d)none
28Q)when a transaction is partially omitted from accounts books. will
this affect trail
balance?
a)yes
b)no
c)none
29Q)when entries made in original entry book are incorrect it is known
as ? (b)
a)errors of omission
b)errors of commission
c)errors of duplication
d)compensatory errors
30)when a transaction is recorded twice and also posted twice in the
ledger.
such errors are known
as? (c
)
a)errors of principle
b)errors of omission
c)errors of duplication
d)none

31Q)effect of one error is compensated by another error is known as

? (b)
a)errors of omission
b)compensating errors
c)errors of commission
d)none
32Q)verification of books of accounts with a specific purpose in mind is
known as?(c)
a)auditing
b)accounting
c)investigation
d)none
33Q)auditing is conducted by
? (a)
a)proprietors
b)creditors
c)managers
d)none
34Q)investigation normally carried by
? (d)
a)owners
b)creditors
c)government
d)outsiders
35Q)the investigator should be
? (b)
a)chartered accountant
b)may or may not be chartered accountant
c)post graduate
d)none
36Q)the main object of audit is
? (b)
a)detection of frauds and errors
b)to find the reliability of financial position and profit and loss account
c)both
d)none
---------------------------------------------------------------------------------------------
---------------------------- classification of audits
================================================================
1Q) general audit will cover which part of the
business? (a)
a)all areas
b)specific areas
c)specific time period
d)none
2Q)specific audit will
cover? (c)
a)specific areas of business
b)particular time or periods of business
c)both
d)none
3Q)audit of profit earning or profit motive organizations is known as
? (a)
a)commercial audit
b)non - commercial audit
c)both
d)none
4Q)audit of non profit organizations is called
? (b)
a)commercial audit
b)non commercial audit
c)both
d)none
5Q)which of the following is non commercial audit
? (d)
a)government audit
b)surya education trust
c)vinayaka hospitals trust
d)all of the above
6Q)external audit is conducted by
? (b)
a)employee of organization
b)independent auditor
c)company auditor
d)none
7Q)internal audit is conducted
by? (d)
a)employee of organization
b)independent auditor
c)company auditor
d) a and c
8Q)compulsory audit required by law made by parliament and state
legislature
is known as
?
a)statutory audit
b)non statutory audit
c)both
d)none
9Q)audit is conducted without any legal necessity is known as
? (b)
a)statutory audit
b)non statutory audit
c)both
d)none
10Q)in continuous audit audit is conducted regularly or at irregular
intervals for
which
period?
a)whole year
b)three months
c)ten months
d)none
11Q)when audit is conducted after annual closure of accounts is known
as ? (b)
a)continuous audit
b)completed audit
c)statutory audit
d)none
12Q)completed audit is also known as
? (d)
a)periodical audit
b)annual audit
c)final audit
d)all of the above
13Q)audit is concerned with items of balance sheet only then it is known
as ? (c)
a)periodical audit
b)final audit
c)balance sheet audit
d)all of the above
14Q) when audit is conducted at the desire of owners, not being statutory
audit
it is known as
?
b)
a)balance sheet audit
b)private audit
c)non commercial audit
d)none
15Q)audit of government offices and departments is done by
? (a)
a)comptroller and auditer general of india
b)attorney general of India
c)both
d)none
16Q)in government departments audit is always
? (b)
a)periodical
b)continuous
c)both
d)none
17Q)audit done by staff of the business is known as
? (a)
a)internal audit
b)external audit
c)statutory audit
d)none
18Q)duties and responsibilities of internal auditor is determined by
? (c)
a)company act
b)government
c)management
d)none
19Q)duties and responsibilities of independent auditor is determined
by? (c)
a)company act 1956
b)other laws made by legislature
c)both
d)none
20Q)main intention of internal audit is
? (a)
a)early detection of errors and frauds and their prevention
b)to find reliability of financial statement
c) a and b
d)none
21Q)main intention of external audit or independent
audit? (b)
a)early detection of errors and frauds and their prevention
b)to find reliability of financial statement
c)a and b
d)none
22Q)what is the nature of internal
audit? (b)
a)conducted periodically
b)continuous
c)both
d)none
23Q)an audit compulsory requirement by law is known
as? (c)
a)compulsory audit
b)statutory audit
c)both
d)none
24Q)the audit which is conducted throughout the year or at the regular
short intervals of time is known as
? (
)
a)compulsory audit
b)partial audit
c)continuous audit
d)none

25Q)when financial statements are required to be prepared after short

interval which of the following audit is
essential?
)
a)compulsory audit
b)complete audit
c)continuous audit
d)none
26Q)on which of the following occasions continuous audit is
essential? (d)
a)internal check is not effective
b)audited statements are required immediately after close of financial
year
c)business is very small
d)a and b
27Q)which of the following were advantages of continuous
audit? (d)
a)through check of all transactions
b)early preparation of internal accounts
c)moral check on employees
d)all of the above
28Q)continuous audit is mainly suitable
for? (a)
a)large or big organizations
b)small organizations
c)both
d)none
29Q)when audit is conducted after the close of financial year it is known
as ? (c)
a)continuous audit
b)compulsory audit
c)periodical audit
d)none
30Q)periodical audit is also known as
? (d)
a)annual audit
b)balance sheet audit
c)completed audit or final audit
d)all of the above

31Q)periodical audit is suitable for which of the following

organizations? (b)
a)big
b)small
c)medium
d)none
32Q)generally in periodical audit , auditors visit the organization how
many times
in a
year?
a)once
b)twice
c)four times
d)continuously
33Q)audited accounts are not immediately prepared in which of the
following
audits?
a)continuous audit
b)annual or periodical audit
c)both
d)none
34Q)when only some special categories of transactions or transactions
done during
certain period is audited then it is known
as? (c)
a)continuous audit
b)annual audit
c)partial audit
d)none
35Q)when auditor is asked to audit payments of bank transactions only
it is known
as?
a)part audit
b)balance sheet audit
c)compulsory audit
d)partial audit
36Q)auditing of various items of balance sheet is known as
? (b)
a)partial audit
b)balance sheet audit
c)annual audit
d)compulsory audit
37Q)complete check and verification of cost accounts to know whether
the organization
following cost accounting principles or not is known
as? (a)
a)cost audit
b)balance sheet audit
c)partial audit
d)none
38Q)according to which of the following sections of companies act 1956
cost audit and maintenance of cost records are compulsory for
some
organizations?
a)section 233 B
b)section 223 B
c)section 332 B
d)none
39Q) cost audit is compulsory for which of the following companies
? (d)
a)processing companies
b)production companies
c)manufacturing companies
d)all of the above

40Q)audit or evaluation of various management functions and process is

known as

)
a)management audit
b)efficiency audit
c)both
d)none
41Q)management audit is done to improve which of the
following? (a)
a)managerial efficiency
b)production efficiency
c)cash transactions
d)none
42Q)which of the following are advantages of efficiency audit
? (d)
a)helps in improving efficiency of management
b)point out defects at all levels of management
c)results in quick decisions
d)all of the above
43Q)whether various activities of organizations are functioning
efficiently or not decided
by?
a)performance audit
b)annual audit
c)compulsory audit
d)none
44Q)which of the following audit examines the relationship between
production and sales with a view to maximize profits of
organizations? (c )
a)balance sheet audit
b)annual audit
c)performance audit
d)none
45Q)the audit of higher level is known as
? (a)
a)performance audit
b)proprietary audit
c)occasional audit
d)none
46Q)audit conducted specially, wherein organizations routine audit is
not done is known
as?
a)standard audit
b)occasional audit
c)compulsory audit
d)none

47Q)audit which checks certain items completely and test check on

remaining items on the whole follows general audit principles is known
as ? (c )
a)occasional audit
b)compulsory audit
c)standard audit
d)none
48Q)in which of the following audits, selected items are audited stepwise
in detail?(c)
a)efficiency audit
b)statutory audit
c)audit in depth
d)standard audit
49Q)auditing sales transaction, all the stages of sales from tender to
payment of money
is called
?
b)
a)standard audit
b)audit in depth
c)both
d)none
50Q)in which of the following audits each and every transaction is
verified ? (b)
a)performance audit
b)post and vouch audit
c)operation audit
d)all of the above
51Q)post and vouch audit is suitable for which of the following
organizations? (c)
a)big
b)medium
c)small
d)all the above
52Q)an audit conducted between two annual audits is known as
? (d)
a)partial audit
b)balance sheet audit
c)half yearly audit
d)interim audit
53Q)generally interim audit is conducted to declare
what? (a)
a)interim dividend
b)yearly dividend
c)bonus
d)none
54Q)when audit is conducted of all items of cash book is known as
? (c)
a)money audit
b)finance audit
c)cash audit
d)none

55Q)audit programme
implies? (a)
a)work to done by staff of auditor and time within which
the work completed
b)work to be done by staff only
c)time taken for audit only
d)none
56Q)audit program is also known as
? (a)
a)auditors plan of action
b)audit functioning
c)audit schedule
d)none
57Q)which of the following were advantages of audit
program? (d)
a)auditor will know the time to complete the work
b)responsibilities of audit assistants can be fixed
c)continuity is not lost when staff changes
d)all of the above
58Q)what are the disadvantages of audit
programme? (c)
a)work becomes mechanical
b)it introduces rigidity
c)both
d)none
59Q)standard instruction which have to be followed while conducting
audit is known
as?
a)flexible audit programme
b)fixed audit programme
c)both
d)none
60Q)which of the following programme allows auditor to develop change
adapt
the programme according to needs of the
organizations? (a )
a)flexible audit programme
b)fixed audit programme
c)both
d)none
61Q)disadvantages of flexible audit
programme? (c)
a)rigid
b)it gives initiative for audit staff
c)important audit procedures may not be followed
d)none
62Q)a register maintained by staff of auditor to note errors queries and
any difficulties
during audit is known
as? (a)
a)audit note book
b)audit register
c)audit programme
d)none
63Q)audit note book contains which of the following
details? (d)
a)list of account books maintained
b)errors detected
c)missing vouchers
d)all of the above
64Q)files of comments, summaries , correspondence with others
prepared by auditor during audit work is known as
? ( b)
a)audit note book
b)audit working papers
c)both
d)none
65Q)audit working papers serve the following
purposes? (d)
a)work performed by auditor and his staff
b)principles followed in auditing
c)used as evidence in court of law
d)all of the above
66Q)checking of common records and books which is carried on by the
auditor as
a matter of routine is known
as? (a)
a)routine checking
b)common checking
c)both
d)none
67Q)which of the following is routine
checking? (d)
a)checking of posting in the ledger
b)checking of balances of ledger
c)checking of postings from journals to ledgers
d)all of the above
68Q)routine checking disclose which of the following
errors? (c)
a)clerical errors
b)simple frauds
c)both
d)none
69Q)what are the advantages of routine
checking? (d)
a)detection of usual errors
b)arithmetical accuracy is verified
c)correctness of postings and castings
d)all of the above

70Q)some entries of each class is taken and checked thoroughly if they

are found correct other entries in that class are also taken to be correct.
this is known as
?
c)
a)routine checking
b)detailed checking
c)test checking
d)all of the above
71Q)the assertions about existence and effectiveness of internal control
system can be made on the basis of
? (
b)
a)substantive procedure
b)compliance procedure
c)both
d)none
72Q)which of the following can be examined on the basis of evidence
from substantive
procedure?
a)existence of asset or
liability
b)rights and obligations of assets
c)proper valuation of assets and liability
d)all of the above
73Q)evidence originating from accounting system can be reliable when
internal control system
is?
a)weak
b)strong
c)both
d)none
74Q)physical evidence is the best evidence in the case of which of the
following
assets?
a)intangible assets
b)tangible assets
c)both
d)none
75Q)physical evidence proves which of the
following? (a)
a)actual existence of asset
b)correct valuation of asset
c)both
d)none
76Q)cash at bank can be evidenced by which of the
following? (b)
a)physically
b)documents only
c)both
d)none

77Q)plant and machinery furniture buildings can be evidenced by which

of the
following?
a)physically
b)orally
c)ratio
d)all of the above
78Q)most of the evidence is in which of the following form
? (c)
a)physical
b)oral
c)documentary
d)none
79Q)which of the following documentary evidence is held by client but
originated outside
business?
)
a)sales invoice
b)salary bills of organization
c)investment in LIC
d)none
80Q)which of the following is not direct
evidence? (c)
a)journal and ledger
b)ratio
c)circumstantial evidence
d)none
81Q)consistency in oral evidence show which of the
following? (b)
a)inconsistency
b)reliability of happening of an event
c)unreliability of happening of an event
d)all of the above
82Q)process to get evidence and verify its authenticity is known as
? (b)
a)audit inquiry
b)audit technique
c)both
d)none
83Q)verification of authenticity of recorded transactions with
documentary evidence
by auditor is known as
? (
c)
a)inquiring
b)reconciliation
c)vouching
d)none
84Q)auditor independently enquiring outside parties to ascertain
whether the recorded
transactions correct or not is known
as? (d )
a)testing
b)scanning
c)footing
d)confirmation
85Q)verifying differences and finding causes of differences is known as
? (a)
a)reconciliation
b)observation
c)footing
d)scouring
86Q)which of the following are audit
technique? (d)
a)scouring
b)footing
c)inquiry
d)all of the above
87Q)physical examination is an audit technique applied to which of the
following? (b)
a)intangible asset
b)tangible asset
c)fictitious assets
d)none
88Q)selection of some transactions from the whole, examining them
thoroughly and
drawing conclusions regarding the whole transactions is known as
? (c )
a)analysis
b)scanning
c)testing
d)physical examination
89Q)classification of important facts to study relationship exists between
them is known
as?
a)analysis
b)inquiry
c)vouching
d)none
90Q)hurried search for relevant information in the books of accounts is
known
as?
a)analysis
b)scanning
c)inquiry
d)none
91Q)which of the following method is used to gather in depth
information about certain
things is known
as?
a)vouching
b)inquiry
c)footing
d)all of the above
92Q)the process to determine the stages of a transaction and documents
originating
at different stages is known as
? (d)
a)inquiry
b)scanning
c)testing
d)flow charting
93Q)critical study of qualities of the data is known as
? (b)
a)flow chart
b)scouring
c)observation
d)none
94Q)which of the following are audit
techniques? (d)
a)observation
b)footing
c)reconciliation
d)all of the above
95Q)which of the following involves a number of checks and control
exercised in a
business to ensure its efficient and economic
working? (b)
a)internal check
b)internal control
c)internal audit
d)all of the above
96Q)which of the following advantages of internal
control? `(d)
a)provides trustworthy data
b)protects assets and records
c)improves operational efficiency
d)all of the above
97Q)which of the following are principles of internal
control? (d)
a)competent and trustworthy employees
b)organizational plan
c)supervision
d)all of the above
98Q)if each department in an organization is responsible for making its
own reports , there would be a danger to show enhanced results
to exaggerate its performance. which principle of internal control
prevent this? (c )
a)arithmetic and accounting controls
b)supervision
c)segregation of duties
d)all of the above

99Q)which of the following is correct under segregation of

duties? (c)
a)separation of operational responsibility from record keeping
b)separation of custody of assets from accounting
c)both
d)none
100Q)separation of custody of assets from accounting comes under
which of the (a)
following?
a)internal control
b)internal check
c)internal audit
d)none
101Q)comparing results of organization with previous records and
correcting discrepancies is known as
? (b)
a)segregation of duties
b)supervision
c)internal check
d)authorization
102Q)when each and every transaction is properly authorized then it is
known as ?(b)
a)supervision
b)authorization
c)segregation of duties
d)all of the above
103Q)which of the following require procedures, policies and delegation
of responsibilities should be in black and
white? (d)
a)audit technique
b)audit programme
c)audit check
d)sound practices
104Q)examination of account books of organization by its own
employees specially
appointed for this purpose is known as
? (c )
a)internal check
b)internal control
c)internal audit
d)none
105Q)which of the following is
correct? (b)
a)internal control is part of internal audit
b)internal audit is part of internal control
c)both are separate
d)none
106Q)which of the following were disadvantages of internal control
system? (d)
a)it involves expenditure of time and money
b)it may not detect unusual or irregular transactions
c)manipulation by management
d)all of the above
107Q)which of the following comes under scope of internal
control? (d)
a)cash control
b)controlling sales and purchase transactions
c)stock maintenance
d)all of the above
108Q)the method of checking work done by one person of the
organization by other (c)
person automatically and independently by arranging duties of members
is known as ?
a)internal audit
b)internal control
c)internal check
d)none
109Q)which of the following is
correct? (c)
a)internal control is part of internal check
b)internal check is part of internal audit
c)internal check is part of internal control
d)none
110Q)which of the following were objectives of internal
check? (d)
a)to have check over staff
b)to minimize chances of errors and frauds
c)increases efficiency of clerks
d)all of the above
111Q)which of the following were principles of internal
check? (d)
a)responsibility
b)rotation of employees
c)automatic check
d)all of the above
112Q)which of the following were advantages of internal check
? (d)
a)division of work
b)detection of frauds and errors
c)increased efficiency
d)all of the above
113Q)which of the following were advantages of internal
check? (d)
a)preparation of financial statements without delay
b)makes auditor work easier
c)increases profits of the organization
d)all of the above
114Q)which of the following were disadvantages of internal
check? (c)
a)not suitable for small organizations
b)if it is not organized properly it leads to disorder in the business
c)both
d)none

115Q)which of the following are correct

? (c)
a)auditors responsibility decreases with effective internal check
b)auditors responsibility increases with inefficient internal check
c)internal check and auditors responsibility are independent of each
other
d)none
116Q)as per income tax rules payments should be made by crossed
cheque
or bank draft if it
exceeds? (
b)
a)5000
b)10 000
c)20 000
d)50 000
117Q)which of the following payments are exempted from the above
rule? (d)
a)payments made in villages and towns where no banking facilities exists
b)payment to RBI SBI other banking institutions
c)payments to cultivators
d)all of the above
118Q)which of the following are objectives of internal check with regard
to wages?(d)
a)to find dummy workers
b)to avoid incorrect records regarding work
c)to avoid manipulation of wage sheets
d)all of the above
119Q)which of the following are time
records? (d)
a)time recording clock
b)brass token
c)attendance records
d)all of the above
120Q)which of the following records time of employees when he enters
and leaves
the
organization?
c)
a)attendance records
b)brass token
c)time recording clock
d)none
121Q)when workers are paid on the basis of units they made then it is
known as? (a)
a)piece wage system
b)time wage system
c)both
d)none
122Q)when the workers are paid on the basis of time spent in the
organization then
it is known as
?
)
a)time wage system
b)piece wage system
c)both
d)none
123Q)purchase order should be prepared
in? (d)
a)single
b)duplicate
c)triplicate
d)quadruplicate
124Q)received goods should be recorded in which of the following
records? (b)
a)goods outward book
b)goods inward book
c)both
d)none
125Q)which of the following are the objectives of internal control with
regard to
purchases?
a)to detect fictitious purchases
b)to prevent double payment
c)both
d)none
126Q)goods received note should be prepared in
? (c)
a)single
b)double
c)triplicate
d)all of the above
127Q)the expenditure on fixed assets is termed as
? (b)
a)revenue expenditure
b)capital expenditure
c)both
d)none
128Q)verification of records and transactions of a company by its own
staff is known
as?
a)internal check
b)internal control
c)internal audit
d)none
129Q)which of the following is main objective of internal audit
? (c)
a)to see accounting system is properly working or not
b)to verify whether internal check is effective or not
c)both
d)none
130Q)internal audit is suitable for which of the following
organizations? (b)
a)small
b)large
c)medium
d)all of the above

131Q)which of the following are main objectives of internal audit

? (d)
a)to know whether internal control system is effective or not and
suggest remedial measures
b)verification of authenticity of financial statements
c)detection of frauds and errors
d)all of the above
132Q)which of the following are objectives of internal audit
? (c)
a)to verify assets and liability of organizations
b)the organizations is following standard accounting principles
c)both
d)none
133Q)which of the following is correct
? (b)
a)internal audit and control is part of internal check
b)internal check and internal audit is part of internal control
c)internal check and internal control is part of internal audit
d)none
134Q)arrangement of duties of employees in such a way that work of one
employee
automatically checked by another employee is known as
? (a)
a)internal check
b)internal audit
c)internal control
d)none
135Q)independent appraisal of records and operations of a company is
known as ?(a)
a)internal check
b)internal audit
c)internal control
d)all the above
136Q)the object of internal audit is to detect errors and frauds whereas
the object of
internal check is to
? (
a)prevent errors and frauds
b)remedy errors and frauds detected
c)both
d)none
137Q)for which of the following separate staff needs to be
employed? (b)
a)internal check
b)internal audit
c)internal control
d)none

138Q)under which of the following reporting to management from time

to time is
essential?
)
a)internal control
b)internal check
c)internal audit
d)none
139Q)under which of the following system errors and frauds are
discovered during
the course of
work?
a)internal audit
b)internal check
c)internal control
d)none
140Q)which of the following involves large number of employees for its
implementation?
a)internal audit
b)verification
c)internal check
d)none
141Q)existence of effective internal control system is essential
for? (c)
a)external auditor
b)internal auditor
c)both
d)none
142Q)internal auditor is appointed
by? (a)
a)management
b)shareholders
c)central government
d)none
143Q)internal auditor submits his report to
whom? (b)
a)shareholders
b)management
c)government
d)none
144Q)external auditor mainly concerned with which of the
following? (b)
a)matters significant to management
b)truth and fairness of financial statements
c)both
d)none
145Q)which of the following is
true? (b)
a)effective internal control system lessen the responsibility of external
auditor
b)effective internal audit system lessen the work of external auditor but
not the
responsibility
c)both
d)none
146Q)which of the following is essential for
vouching? (c)
a)effective internal control system
b)internal audit system
c)documentary evidence
d)none
147Q)under vouching auditor verifies which of the
following? (c)
a)authenticity of transactions
b)authority of transactions
c)both
d)none
148Q)verification of recorded transactions with documentary evidence is
known
as?
a)checking
b)verification
c)vouching
d)all the above
149Q)what are the objectives of
vouching? (d)
a)to verify all recorded transactions with documentary evidence
b)no error or fraud committed while recording transactions
c)non related business transactions are not recorded
d)all the transactions
150Q)the auditor forms an opinion regarding accounting work on the
basis of which
of the
following?
a)internal audit
b)internal check
c)vouching
d)all the above
151Q)in large organizations where strong internal control system exists
auditor does
which of the
following?
a)may apply for test checks
b)thoroughly verifies each and every transaction
c)both
d)none
152Q)a simple checking involves checking of totals, carry forward,
posting ,balancing of accounts is known as
? (b)
a)test check
b)routine checking
c)vouching
d)none
153Q)which of the following is
true? (c)
a)routine checking includes vouching
b)vouching includes test checks
c)vouching includes routine checking
d)none
154Q)documentary evidence used for verification in vouching is known
as? (d)
a)receipt
b)key document
c)legal document
d)voucher
155Q)which of the following are
vouchers? (d)
a)sales invoice
b)purchase invoice
c)cash payment receipts
d)all the above
156Q)vouchers can be classified into which of the
following? (c)
a)primary vouchers
b)collateral vouchers
c)both
d)none
157Q)written evidence available in original is known as
? (a)
a)primary vouchers
b)collateral vouchers
c)both
d)none
158Q)carbon copies or copies of original written evidence is known as
? (b)
a)primary vouchers
b)collateral vouchers
c)both
d)none
159Q)auditor should do test check of transactions only under which of
the following
conditions?
a)when satisfactory internal control system exists
b)when satisfactory internal check exists
c)both
d)none
160Q)using machines to record and presentation of accounting
transactions is known as
?
a)computer accounting
b)mechanized accounting
c)both
d)none
161Q)what are the advantages of mechanized accounting
system? (d)
a)the chances of errors are minimum
b)it reduces time to perform actions
c)final statements can be prepared without any delay
d)all the above
162Q)what are the objectives of vouching purchase
book? (d)
a)to see all purchase invoices are entered
b)clients pay for only those goods which are delivered by supplier
c)goods entered in purchase book are actually received
d)all the above
163Q)when the auditor should show greater care in vouching credit
purchases? (b)
a)efficient internal control system for credit purchases exists
b)internal control system for purchases is not adequate
c)both
d)none
164Q)which of the following provides/ gives and authority for purchase
department
for making
purchases?
a)purchase requisition
b)purchase note book
c)purchase day book
d)none
165Q)purchase requisition contains which of the
following? (d)
a)goods to be purchased
b)quality of goods
c)quantity of goods
d)all the above
166Q)purchase book can be verified with which of the
following? (e)
a)purchase invoices
b)copies of orders placed
c)goods received note
d)goods inward book
e)all the above
167Q)auditor should carefully vouch which of the following
purchases? (c)
a)purchases of first month of accounting year
b)purchases of last month of accounting year
c)both
d)none
168Q)purchase return imply which of the
following? (a)
a)purchase returned back to suppliers
b)purchases returned from customers
c)both
d)none
169Q)in case of the purchase returns which of the following is
prepared? (b)
a)debit note
b)credit note
c)both
d)none

170Q)audit of cash transactions involve which of the

following? (d)
a)checking in cash transactions entered in cash book
b)correcting accounting principle has been followed or not
c)whether documentary evidence is there against cash transactions
d)all the above
171Q)in small organizations how many ledger accounts are
maintained? (a)
a)one
b)two
c)three
d)none
172Q)large organizations maintain which of the following ledger
accounts? (c)
a)personal
b)impersonal
c)both
d)none
173Q)personal ledger account include which of the
following? (c)
a)purchase ledger
b)sales ledger
c)both
d)none
174Q)impersonal ledger accounts contain which of the following
? (c)
a)real accounts
b)nominal accounts
c)both
d)none
175Q)the purchase ledger includes accounts of
whom? (a)
a)suppliers
b)customers
c)both
d)none
176Q)the sales ledger includes accounts of
whom? (b)
a)suppliers
b)customers
c)both
d)none
177Q)sales ledger contain which of the following
accounts? (b)
a)credit accounts
b)debit accounts
c)both
d)none
178Q)which of the following are outstanding
assets? (d)
a)income receivable
b)prepaid expenses
c)deferred revenue expenditure
d)all the above
179Q)income receivable should be shown
in? (b)
a)trading account
b)profit and loss account
c)balance sheet
d)none
180Q)prepaid expenses belongs to which of the following
years? (c)
a)current year
b)previous year
c)future year
d)all the above
181Q)which of the following are deferred revenue
expenditure? (d)
a)discount allowed on issue of debentures
b)research and development expenditure
c)heavy repairs of non recurring nature
d)all the above
182Q)deferred revenue expenditure is also known as
? (c)
a)outstanding asset
b)fictitious asset
c)both
d)none

183Q)which of the following is known as procedure followed at the end

of the year to
confirm ownership, valuation and existence of items at the balance sheet
date? (b)
a)vouching
b)verification
c)both
d)none
184Q)verification of assets establishes which of the following truth
regarding
assets?
a)existence
b)ownership
c)possession
d)all the above
185Q)verification includes which of the
following? (b)
a)vouching
b)valuation of assets
c)both
d)none
186Q)what are the objectives of verification of
assets? (d)
a)finding evidence about existence of assets
b)finding evidence about ownership of assets
c)finding evidence regarding possession of assets
d)all the above
187Q)which of the following is
true? (b)
a)vouching and verification are same
b)vouching and verification are different
c)both
d)none
188Q)vouching is done throughout the year then verification is
done? (a)
a)only at the end of the year
b)only at the beginning of the year
c)both
d)none
189Q)vouching is based on which of the
following? (a)
a)documentary evidence only
b)physical examination
c)both
d)none
190Q)verification is based on which of the
following? (c)
a)physical examination
b)documentary evidence
c)both
d)none
191Q)verification includes which of the
following? (b)
a)vouching
b)valuation
c)both
d)none
192Q)verification is done by which of the
following? (c)
a)special staff
b)audit clerks
c)auditor himself
d)none
193Q)enquiring about the truthfulness of assets by third party or by
management is known
as?
a)verification
b)confirmation
c)both
d)none
194Q)what is known as physical verification by
auditor? (a)
a)inspection of tangible assets
b)inspection of intangible assets
c)both
d)none
195Q)which of the following items require physical verification by
auditor? (e)
a)cash in hand
b)stocks and marketable securities
c)plant and machinery
d)land and buildings
e)all the above
196Q)under which of the following conditions financial statements does
not exhibit true and fair
view?
)
a)over valuation
b)under valuation
c)both
d)none
197Q)valuation of assets and liabilities done by
whom? (a)
a)responsible officers of business
b)auditor himself
c)both
d)none
198Q)what is the basis of valuation for fixed assets
? (b)
a)cost price or market price whichever is less
b)cost less depreciation
c)both
d)none
199Q)cost price or market price whichever is less--- this principle is used
to value
which of the following
assets? (c
)
a)fixed assets
b)fictitious assets
c)current assets
d)none
200Q)which of the following certifies the correct value of assets and
liabilities
at balance sheet
date?
)
a)vouching
b)verification
c)valuation
d)none
201Q)valuation is done by
whom? (c)
a)audit clerks
b)auditor himself
c)expert valuers
d)all the above
202Q)which of the following are intangible
assets? (d)
a)good will
b)patents
c)copy rights
d)all the above
203Q)land and building, plant and machinery, motor vehicles comes
under which
category?
b)
a)intangible assets
b)fixed assets
c)fictitious assets
d)none
204Q)which of the following are fictitious
assets? (d)
a)preliminary expenses
b)discount on issue of shares and debentures
c)plant
d)a and b only
205Q)which of the following are floating
assets? (d)
a)cash in hand
b)bills receivable
c)stock in trade
d)all the above
206Q)what is good
will?
a)it is reputation of the firm
b)it is an intangible asset
c)both
d)none
207Q)under which of the following conditions good will appears in the
balance
sheet?
a)when good will purchased
b)company revalued whole of assets and raised goodwill accounts in the
books
c)in case of partnership when a new partner enters or when an old
partner retires
d)all the above
208Q)which of the following is good
will? (a)
a)purchase price of business minus net assets
b)net assets minus purchase price
c)both
d)none
209Q)good will should be verified with which of the
following? (c)
a)purchase agreement
b)in case of partnership with partnership deed
c)both
d)none
210)good will should be valued at
? (a)
a)cost less written off amounts
b)cost price or market price whichever is less
c)both
d)none

211Q)under which of the following conditions auditor should insist on

writing off good
will?
a)future benefit is existent
b)future benefit is non existent
c)both
d)none
212Q)which of the following gives an inventor exclusive right to sell or
use his invention for
years?
a)good will
b)trade mark
c)patents
d)none
213Q)which of the following is true regarding verification of
patents? (c)
a)it should be verified with certificates
b)auditor should ensure that patents are registered on the name of client
c)both
d)none
214Q)original fee paid to purchase patents should be treated as capital
investment
then renewal fee paid for patents should be treated as
? (b)
a)also capital investment
b)revenue expenditure
c)both
d)none
215Q)patents must be valued at which of the
following? (c)
a)market value
b)going concern value
c)cost less depreciation
d)none
216Q)after how many years patents automatically
lapses? (b)
a) twenty years
b)sixteen years
c)fifteen years
d)none
217Q)which of the following is the exclusive right to produce literary
work? (b)
a)patent
b)copy right
c)trade mark
d)none
218Q)an author has copyright for how many
years? (b)
a)his life only
b)his life and fifteen years after his life
c)his life and twenty years after his life
d)none

219Q)valuation of copyrights should be done on the basis of

? (b)
a)cost price
b)cost less amount written off
c)cost price or market price whichever is less
d)none
220Q)which of the following is a symbol identified with a particular
trader? (a)
a)trade mark
b)copy right
c)patents
d)none
221Q)trade marks can be verified with which of the
following? (b)
a)companies registrar
b)deed endorsed by the office of registrar of trade marks
c)both
d)none
222Q)verification of freehold land and building should be done with
which of the
following?
a)purchase agreement
b)title deeds
c)both
d)none
223Q)under which of the following method is used for valuation of
freehold land? (a)
a)cost price only
b)replacement value
c)market value
d)none
224Q)under which of the following method buildings should be
valued? (c)
a)replacement value
b)market value
c)cost less depreciation
d)none
225Q)depreciation is calculated on which of the following amount when
machinery purchased under hire purchase
system? (b)
a)amount of purchase price paid
b)cost price of asset
c)both
d)none
226Q)which of the following should be verified with regarding to
imported
machinery?
a)agreement with foreign suppliers
b)import license
c)permission of RBI
d)all the above

227Q)calculation of the rate of depreciation is the duty of

? (b)
a)auditor
b)manager
c)both
d)none
228Q)which of the following assets are valued at cost less
depreciation? (d)
a)furniture and fittings
b)plant and machinery
c)motor vehicles
d)all the above
229Q)auditor should verify cash in hand with which of the
following? (b)
a)by documentary evidence
b)physical counting
c)both
d)none
230Q)when counting of cash should be
done? (b)
a)at the beginning of accounting year
b)at the balance sheet date
c)both
d)none
231Q)what are the objectives of verification of bills
receivable? (d)
a)to check the validity of bills
b)to know the accuracy of amounts
c)to have financial statements true and fair view
d)all the above
232Q)bills which were dishonored before the date of balance sheet and
renewal is not
made should be shown in which of the
following? (b)
a)bills receivable
b)sundry debtors
c)both
d)none
233Q)stock in trade comprises which of the
following? (d)
a)stores and spare parts
b)loose tools
c)raw material
d)all the above
234Q)if stock in trade is overstated then payment of dividend based on
which of the following
profits?
a)actual profits
b)inflated profits
c)both
d)none

235Q)secret reserves can be created with which of the

following? (a)
a)understating of stock in trade
b)overstating of stock in trade
c)both
d)none
236Q)what are the objectives of stock
verification? (c)
a)to know the existence of stock
b)to satisfy regarding the correctness of valuation of stock
c)both
d)none
237Q)in which of the following way stock should be
valued? (c)
a)cost price
b)market price
c)cost price or market price whichever is less
d)none
238Q)which of the following are different methods of
costing? (e)
a)unit costing method
b)average cost method
c)FIFO method
d)LIFO method
e)all the above
239Q)under which of the following method each article is valued at the
actual price at
which it was
purchased?
a)unit cost method
b)average cost method
c)FIFO method
d)all the above
240Q)which of the following method is used to value stock purchased
and acquired at
different intervals of
time? (b)
a)unit cost method
b)average cost method
c)LIFO
d)FIFO
241Q)under which of the following it is assumed that the quantity held in
stock represents latest
purchases?
a)FIFO
b)LIFO
c)both
d)none

242Q)under which of the following methods stock is valued at the rate at

which latest purchases are
made?
a)LIFO
b)FIFO
c)base stock method
d)none
243Q)under which of the following method stock held represents earliest
purchases?
a)LIFO
b)FIFO
c)both
d)none
244Q)under which of the following methods stock is valued at the rate at
which earlier
purchases are
made?
)
a)FIFO
b)standard cost method
c)LIFO
d)none
245Q)under which of the following method some amount of stock is
always carried at
original cost and should not be issued except in
emergency? (c )
a)LIFO
b)FIFO
c)base stock method
d)none
246Q)what are the objectives of verification of
investments? (d)
a)enquiring about ownership and custody of investments
b)in order to classify investments into current and long term
c)to find out whether there is a pledge or mortgage
d)all the above
247Q)auditing is compulsory for which of the following
organizations? (c)
a)sole trader
b)partnership firm
c)companies
d)all the above
248Q)audit for sole trading concern is
? (b)
a)compulsory
b)advisable
c)both
d)none
249Q)scope of audit of sole trader is decided
by? (c)
a)partnership act
b)law
c)agreement between client and auditor
d)none
250Q)which of the following is true regarding audit of partnership
firms? (b)
a)it is compulsory under partnership act 1932
b)it is not compulsory under partnership act 1932
c)both
d)none
251Q)scope of audit of partnership firm is decided by
whom? (b)
a)partnership act 1932
b)agreement between client and partners
c)both
d)none
252Q)what are the advantages of auditing of partnership
firm? (d)
a)it helps in settlement of accounts between partners
b)helps in raising loans from financial instructions
c)it helps to assess fix tax liability
d)all the above
253Q)when the partnership deed is silent then profit or loss earned by
the firm is distributed to partners in which
way? (b)
a)capital contributed ratio
b)equally
c)both
d)none
254Q)which of the following is true regarding partnership firm when
partnership deed is
silent?
a)partners are not given any salary or remuneration
b)interest on capital is nil
c)6% interest per annum is paid and advance given by partners to firm
d)all the above
255Q)which of the following sections of companies act 1956 makes audit
of joint stock
companies
compulsory?
a)sec 220 to 230
b)sec 224 to 233
c)sec 230 to 250
d)none
256Q)first auditors of joint stock company is appointed by
whom? (c)
a)central government
b)share holders
c)board of directors
d)all the above
257Q)first auditors of companies under section 224(5) must be appointed
within
how many days of date of registration of the
company? (a)
a)one month
b)fifteen days
c)two months
d)none
258Q)auditors first appointed by board of directors will hold office
until? (c)
a)next auditor is appointed
b)five years
c)conclusion of first annual general meeting
d)none
259Q)in case of first auditors which of the following necessary under
companies
act?
a)he shall be informed of his appointment
b)first auditor is required to inform registrar regarding his acceptance
or
refusal of appointment
c)both
d)none
260Q)subsequent auditors are appointed every year by
whom? (b)
a)board of directors
b)share holders in annual general meeting
c)both
d)none
261Q)auditors every year are appointed by share holders with which of
the
following?
a)special resolution
b)ordinary resolution
c)both
d)none
262Q)an auditor appointed under sec 224(1) should be informed of his
appointment
within how many
days? (c
)
a) ten days of his appointment
b)five days of his appointment
c)seven days of his appointment
d)none
263Q)under sec 224(1-A) every auditor appointed in annual general
meeting should
convey registrar of companies his acceptance or rejection within how
many
days? (
a)fifteen days of receipt of his appointment
b)thirty days of receipt of his appointment
c)two months of receipt of his appointment
d)none
264Q)if an auditor is appointed in annual general meeting does not
accept his appointment then what is course of
action? (d)
a)board of directors appoint another auditor
b)another general meeting is convened to appoint new auditor
c)central government appoint an auditor
d)none

265Q)under sec 224(3) where no auditor is appointed or reappointed in

the annual general meeting then what is the course of
action? (a)
a)central government appoint an auditor
b)board of directors appoint an auditor
c)shareholders will appoint an auditor in another meeting
d)none
266Q)a company failed to give notice under sec 224(3) to regional
director then
what is the penalty to be imposed on defaulting
officers? (a)
a)fine unto 5000
b)three years of imprisonment
c)both
d)none
267Q)vacancy caused by death, insanity, insolvency or other
disqualifications is
known
as?
)
a)ordinary vacancy
b)special vacancy
c)casual vacancy
d)none
268Q)casual vacancy of an auditor is filled by
whom? (b)
a)central government
b)board of directors
c)share holders
d)none
269Q)which of the following is not casual
vacancy? (d)
a)resignation of an auditor
b)refusal to accept an appointment
c)vacancy due to insolvency
d)a and b only
270Q)the vacancy caused due to resignation of an auditor and refusal to
accept as
an auditor should be filled by
whom? (a)
a)shareholders in general body meeting
b)board of directors
c)central government
d)none
271Q)auditor appointed in place of resigned auditor should hold office
for how
long?
a)five years
b)until conclusion of next annual general meeting
c)until removal by board of directors
d)all the above
272Q)under which of the following sections appointment of a auditor by
special resolution is
necessary?
a)sec 224A
b)sec 224B
c)sec 242A
d)sec 242 B
273Q)a company in which 40% of subscribed share capital is held by
Andra Pradesh
government then it should appoint a auditor with which of the
following? (b)
a)ordinary resolution
b)special resolution
c)both
d)none
274Q)which of the following section mentions about compulsory
reappointment of
auditors?
a)sec 224(1)
b)sec224(2)
c)sec224(5)
d)none
275Q)auditor of government companies can be appointed by
whom? (c)
a)central govt
b)comptroller and auditor general of India
c)central government on the advice of CAG
d)board of directors
276Q)which of the following section mentions about appointment of
government
companies?
a)sec 619
b)sec 916
c)sec 196
d)none
277Q)the first auditors of company can be removed by
whom? (b)
a)board of directors
b)share holders in general meeting
c)central government
d)none
278Q)notice for appointing auditors in first annual general meeting in
place of first auditors should be given in how many
days? (c )
a)seven days before meeting
b)twenty one days before meeting
c)fourteen days before meeting
d)none
279Q)who removes the auditor other than first auditor before
completion of his
term?
a)share holders
b)central government
c)share holders with prior permission of central government
d)none
280Q)if an auditor is removed after completion of his term then which of
the following
resolution is
compulsory?
a)special resolution
b)ordinary resolution
c)no resolution is needed
d)none
281Q)which of the following section mentions about removal of a auditor
after the expiry of his
term?
a)sec 225
b)sec 522
c)sec 252
d)none
282Q)when an auditor is to be removed under sec 225 which of the
following rights he
has?
a)right to attend general meeting
b)right to speak at general meeting
c)right to vote at general meeting
d)a and b only
283Q)under sec224(1) of companies act 1956 which of the following is
tenure of an
auditor?
a)one year or one accounting year
b)three years
c)from the conclusion of one annual general meeting to the
conclusion of another general meeting
d)none
284)under sec 224(1B) of companies act 1956 an individual cannot audit
more than how many
companies?
a)ten companies
b)twenty companies
c)twenty five companies
d)none
285Q)the maximum companies that an auditor can audit under sec
224(1b) of companies act 1956
includes? (b
a)twenty companies paid up capital of all companies exceeds 25 lacs or
more
b)twenty companies paid up capital of not more than 10 companies
exceed 25 lakh or more
c)both
d)none
286Q)according to sec 224(8) when auditor is appointed by board of
directors or central government then their remuneration is fixed by
whom? (b)
a)share holders or company law board
b)board of directors or central government respectively
c)both a and b
d)none
287Q)according to sec 224(8) when an auditor is appointed by other than
board of directors or central government then their remuneration is
fixed by whom? (c )
a)board of directors
b)central government
c)general body meeting
d)none
288Q)which of the following sections of companies act 1956 provides for
qualifications and disqualifications of an
auditor? (a )
a)sec 226
b)sec 262
c)sec 622
d)none
289Q)what is the qualifications of an auditor of
company? (a)
a)a chartered accountant
b)certificate holder of ICWAI
c)senior accountant
d)none
290Q)under sec 226(3) which of the following persons cannot act as
auditors? (d)
a)a body corporate
b)an officer or employee of a company
c)a person who is indebted to company more than Rs.1000
d)all the above
291Q)which of the following rights of a company
auditor? (d)
a)right to access to books of accounts
b)right to obtain information
c)right to inspect branch accounts
d)all the above
292Q)which of the following are rights of company
auditor? (c)
a)right to receive notices
b)right to sign audit reports
c)both
d)none
293Q)under sec 227(1) right to obtain information and explanation
auditor is authorized
to call information from
whom? (c
)
a)share holders
b)creditors of the company
c)officers of the company
d)all the above
294Q)under sec 231 of companies act auditor is authorized to receive
notices .
under this section his position is equal to
? (b)
a)directors of company
b)any share holder of company
c)any officer of a company
d)none
295Q)auditor has lien on which of the
following? (d)
a)books of accounts
b)working papers
c)correspondence with third party in professional capacity
d)all the above
296Q)reporting to shareholders is the statutory duty of auditor on which
of the following
he should
report?
a)whether the accounts give information required by the act
b)whether balance sheet give true and fair view of financial position of
accounts
c)profit and loss accounts give true and fair view of profit and loss for
the financial year
d)all the above
297Q)auditor is required to enquiry which of the following under sec
227(1A) ? (c)
a)whether loans and advances made by company on the basis of security
has
been properly secured
b)whether personal expenses have been charged to revenue account
c)both
d)none
298Q)under joint audit auditor is responsible for which of the
following? (a)
a)entire audit work of auditors
b)auditor work performed by him only
c)both
d)none
299Q)which of the following section of company act govern branch
audit? (c)
a)sec 226
b)sec 227
c)sec 228
d)none
300Q)branch auditor submits his report to
whom? (c)
a)board of directors
b)share holders
c)company auditor for its incorporation into total report
d)none
301Q)remuneration of branch auditor is decided by
whom? (c)
a)share holders in general meeting
b)board of directors authorized by general body meeting
c)both
d)none

302Q)under which of the following sections of company act central

government is
authorized to exempt branch
audit? (a)
a)sec 228(4)
b)sec 298(3)
c)sec 227(8)
d)none
303Q)special audit is ordered by
whom? (b)
a)board of directors
b)central government
c)state government
d)none
304Q)special audit is conducted under which of the following
sections? (a)
a)sec 233(a)
b)sec 234(a)
c)sec 232(a)
d)none
305Q)special audit is conducted under which of the following
conditions? (d)
a)the affairs of the any company are not being managed in accordance
with sound business principles
b)the affairs of the company is likely to damage to the interest of trade
industry to which it pertains
c)financial position of any company is such as to endanger its solvency
d)all the above
306Q)special auditor submits his report to
whom? (c)
a)share holders
b)board of directors
c)central government
d)none
307Q)liability of an auditor of sole trader, partnership firm depends on
which of the
following?
a)law
b)agreement between client and auditor
c)both
d)none
308Q)auditor is liable for negligence under which of the
following? (d)
a)auditor found negligence in his duties
b)damage happened to client due to auditors negligence
c)loss suffered by client to whom he owed a duty
d)all the above
309Q)under which of the following section civil liability of and auditor
occurs? (d)
a)sec 477, 478
b)sec 539 , 543, 545
c)sec 621, 625, 633
d)all the above
310Q)which of the following sections deals with civil liabilities of an
auditor for misstatements in
prospectus?
a)sec 62
b)sec 26
c)sec 78
d)none
311Q)under which of the following sections criminal liability for an
auditor can be
imposed?
a)sec 628
b)sec 539
c)both
d)none
312Q)under section 63 of companies act auditor is criminally liable for
any misstatement
in prospectus for how many years of
imprisonment? (b)
a)up to five years
b)up to two years
c)up to seven years
d)none
313Q)which of the following sections grants relief in criminal cases
provided that court
believes that auditor acted with care and
honest? (a)
a)sec 633
b)sec 636
c)sec 336
d)none
314Q)under which of the following sections every auditor is required to
make a report
to the shareholders on the accounts examined by
him? (a)
a)sec 227(2)
b)sec 227(4)
c)sec 272(2)
d)none
315Q)if an auditor is satisfied with the fairness of the balance sheet and
profit and loss
account then he will issue which
report? (a)
a)unqualified report
b)qualified report
c)both
d)none
316Q)when the auditor is of opinion that the balance sheet and profit
and loss account
does not represent true and fair view then he gives which
report? (b)
a)unqualified report
b)qualified report
c)both
d)none

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