ALL MCQS Flashcards
An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence, is known as
PROFESSIONAL SKEPTICISM
CA Vijay is the statutory auditor of XYZ Ltd. for the FY 2020-21. During the process of assembling the audit file, CA Vijay briefed his team as to what all changes can be made to the audit documentation at that stage. Which of the following changes cannot be made to the audit documentation during the final assembly process?**
*A) Sorting, collating & cross referencing of working papers.
B) Signing off completion checklists relating to the file assembly process.
C) Deleting or discarding superseded documents.
D) Recalculation of Depreciation.**
D) Recalculation of Depreciation.**
SQC 1 requires firms to establish policies and procedures for the timely completion of the assembly of audit files. An appropriate time limit within which to complete the assembly of the final audit file is ordinarily not more than ————- after the date of the auditor’s report.
60 DAYS
As per requirements of SQC 1, firm should obtain written confirmation of compliance with its policies and procedures on independence from all firm personnel required to be independent in terms of the requirements of the Code:
**
A)on quarterly basis
B)on half yearly basis.
C)on engagement basis.
D)on annual basis**
D) on annual basis
A process comprising an ongoing consideration and evaluation of the firm’s system of quality control, including a periodic inspection of a selection of completed engagements, designed to enable the firm to obtain reasonable assurance that its system of quality control is operating effectively, is known as
**monitoring **
A process designed to provide an objective evaluation, before the report is issued, of the significant judgments the engagement team made and the conclusions they reached in formulating the report, is known as
EQCR
Mr. A, auditor and Mr. B, Finance Manager of XYZ Pvt Ltd are friends. Mr. A prepares the audit report according to the wishes and directions of Mr. B. In this situation which essential quality of the auditor has been compromised
**
A) Professional Competence
B) Independence
C ) Professional Skepticism
D) Professional Skepticism**
B) Independence
An enterprise is normally viewed as a going concern, i.e., as continuing in operation
A)Till the next financial year
B)For the foreseeable future
C)Till the completion if audit
D)All of the above
B)For the foreseeable future
Auditor Compares Gross Profit Ratio with that of Previous year and it is discovered that there has been a fall in the ratio. This is an example of
A)Analytical Procedure
B)Test of Controls
C)Walk Through Test
D)Audit Sampling
The relationship between tolerable error and sample size is
A)Inverse
B)Direct
C)lose
D)There is no relationshiP
In random Sample, each item of population has
A)equal chance of selection
B)has varying chance of selection depending upon placing of items.
C)may have a chance of selection based on auditors professional judgement
D)All of these
**
A)equal chance of selection**
Risk of material misstatement has _______components
2
**
Which of the following is not a type of modified opinion**
A)qualified opinion
B)adverse opinion
C)disclaimer of opinion
D)negative opinion.
D)negative opinion.
If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor shall express a ————–.
(a) QO
(b) DO
(c) Either (a) or (b)
(d) Both (a) & (b)
C)EITHER QO OR DO
Which of the following item should not be treated as an asset, as per provisions of Accounting Standard 26
A)Computer software
B)Internally generated goodwill
C)Fishing License
D)Brand Name
B)Internally generated goodwill
are charges against profits to provide for known liabilities for which amounts cannot be determined with accuracy
A)Contingent Liabilities
B)Provision
C)Securities Premium Reserve.
D)Liabilit
B)Provision**
Useful life of assets is given in Schedule —— of Companies Act 2013.
SCHEDULE II
**Which of the following is not an example of revenue expenditure **
A)Salaries and wages of employees engaged directly or in-directly in production
B)Repairs, maintenance and renewals of fixed assets
C) Legal and professional expenses
D) development expenditure on land
D) development expenditure on land
**
Search for unrecorded liability is performed during audit of current liabilities to address the following balance sheet assertion**
A)Valuation
B)Rights and obligations
C)Existence
D)Completeness
D)Completeness
Wages paid to workers would qualify as:
A)Revenue expenditure
B)Revenue expenditure
C)Revenue or capital expenditure depending upon facts and circumstances.
D)None of the above
C)Revenue or capital expenditure depending upon facts and circumstances.
Direct confirmation procedures are performed during audit of accounts receivable balances to address the following balance sheet assertion:
A)Rights and obligations
B)Existence
C)Valuation
D) Completeness
B)Existence
Which assertion is common among the statement of profit and loss and balance sheet captions
COMPLETENESS
**
If the prior period financial statement are not audited, the auditor shall state the same in ——————–.**
A)Key Audit matter Paragraph
B)Emphasis of matter Paragraph
C)Going concern paragraph
D)Other matter Paragraph
D)Other matter Paragraph
The level of information included in those comparative financial statements is comparable with that of financial statement of ——————–.
A)Prior period
B)Future period
C)Current period
D)All of the above
C)Current period
