Auditing MCQs

AB & Co chartered accountant have been requested by their client XYZ Ltd. not to confirm accounts receivables because of concerns about creasing conflicts with customers over amounts owed. The auditors were satisfied concerning receivables after applying alternative audit procedures AB & Co.’s auditors report likely contained

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AB & Co chartered accountant have been requested by their client XYZ Ltd. not to confirm accounts receivables because of concerns about creasing conflicts with customers over amounts owed. The auditors were satisfied concerning receivables after applying alternative audit procedures AB & Co.’s auditors report likely contained

AB & Co chartered accountant have been requested by their client XYZ Ltd. not to confirm accounts receivables because of concerns about creasing conflicts with customers over amounts owed. The auditors were satisfied concerning receivables after applying alternative audit procedures AB & Co.’s auditors report likely contained

 Options:

a) Qualified opinion
b) Disclaimer of opinion
c) Unqualified I opinion with an explanatory paragraph
d) Unqualified opinion

The Correct Answer Is:

c) Unqualified I opinion with an explanatory paragraph

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A departure from recognized accounting principle is disclosed in a note to the financial statements. The auditor should

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A departure from recognized accounting principle is disclosed in a note to the financial statements. The auditor should

A departure from recognized accounting principle is disclosed in a note to the financial statements. The auditor should

 Options:

a) issue a standard unqualified audit report
b) issue a qualified report
c) issue an unqualified report with ‘emphasis of matter’ paragraph
d) disclaim opinion

The Correct Answer Is:

b) issue a qualified report

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In case the auditor gives a disclaimer of opinion in the audit report which of the following paragraph(s) of a standard unqualified audit report are modified?

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In case the auditor gives a disclaimer of opinion in the audit report which of the following paragraph(s) of a standard unqualified audit report are modified?

In case the auditor gives a disclaimer of opinion in the audit report which of the following paragraph(s) of a standard unqualified audit report are modified?

 Options:

a) Scope paragraph
b) Opinion paragraph
c) Scope and opinion paragraphs
d) Introductory, scope and opinion paragraph

The Correct Answer Is:

c) Scope and opinion paragraphs

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The management of a company to which AS-3. is not applicable does not include statement of cash flows in its annual report. The auditor should express

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The management of a company to which AS-3. is not applicable does not include statement of cash flows in its annual report. The auditor should express

The management of a company to which AS-3. is not applicable does not include statement of cash flows in its annual report. The auditor should express

 Options:

a) Unqualified opinion
b) Qualified opinion
c) Adverse opinion
d) Any of these depending upon materiality and pervasiveness and adequacy of disclosure

The Correct Answer Is:

a) Unqualified opinion

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Which of the following is true about explanatory notes?

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Which of the following is true about explanatory notes?

Which of the following is true about explanatory notes?

 Options:

a) These are given by the directors of the company
b) These are given to adhere to requirements of section 211.
c) These are given by auditors of the company in auditor’s report
d) All of the above

The Correct Answer Is:

a) These are given by the directors of the company

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The auditor has serious concern about the going concern of the company. It is dependent on company’s obtaining a working capital loan from a bank which has been applied for. The management of the company has made full disclosure of these facts in the notes to the balance sheet. The auditor is satisfied with the level of disclosure. He should issue_

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The auditor has serious concern about the going concern of the company. It is dependent on company’s obtaining a working capital loan from a bank which has been applied for. The management of the company has made full disclosure of these facts in the notes to the balance sheet. The auditor is satisfied with the level of disclosure. He should issue_

The auditor has serious concern about the going concern of the company. It is dependent on company’s obtaining a working capital loan from a bank which has been applied for. The management of the company has made full disclosure of these facts in the notes to the balance sheet. The auditor is satisfied with the level of disclosure. He should issue_

 Options:

a) unqualified opinion
b) unqualified opinion with reference to notes to the accounts
c) qualified opinion
d) disclaimer of opinion

The Correct Answer Is:

b) unqualified opinion with reference to notes to the accounts

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If in the above question the inventory consisted of about ten per cent of total assets other conditions remaining same the auditor should issue __

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If in the above question the inventory consisted of about ten per cent of total assets other conditions remaining same the auditor should issue __

If in the above question the inventory consisted of about ten per cent of total assets other conditions remaining same the auditor should issue __

 Options:

a) unqualified opinion
b) qualified opinion
c) disclaimer of opinion
d) adverse opinion

The Correct Answer Is:

c) disclaimer of opinion

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The inventory consists of about one per cent of all assets. The client has imposed restriction on auditor to prohibit observation of stock take. The auditor cannot apply alternate audit procedures.

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The inventory consists of about one per cent of all assets. The client has imposed restriction on auditor to prohibit observation of stock take. The auditor cannot apply alternate audit procedures.

The inventory consists of about one per cent of all assets. The client has imposed restriction on auditor to prohibit observation of stock take. The auditor cannot apply alternate audit procedures.

 Options:

a) unqualified opinion
b) qualified opinion
c) disclaimer of opinion
d) adverse opinion

The Correct Answer Is:

a) unqualified opinion

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Which of the following report not result in qualification of the auditor’s opinion due to a scope limitation?

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Which of the following report not result in qualification of the auditor’s opinion due to a scope limitation?

Which of the following report not result in qualification of the auditor’s opinion due to a scope limitation?

 Options:

a) Restrictions the client imposed
b) Reliance on the report of other auditor
c) Inability to obtain sufficient appropriate evidential matter
d) Inadequacy of accounting records

The Correct Answer Is:

b) Reliance on the report of other auditor

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When restrictions that significantly affect the scope of the audit are imposed by the client the auditor generally should issue which of the following opinion?

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When restrictions that significantly affect the scope of the audit are imposed by the client the auditor generally should issue which of the following opinion?

When restrictions that significantly affect the scope of the audit are imposed by the client the auditor generally should issue which of the following opinion?

 Options:

a) Qualified opinion
b) Disclaimer of opinion
c) Adverse opinion
d) Unqualified report with ‘an emphasis of matter’ paragraph;

The Correct Answer Is:

a) Qualified opinion

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The date on auditor’s report should not be__

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The date on auditor’s report should not be__

The date on auditor’s report should not be__

 Options:

a) the data of AGM
b) later than the date on which the accounts are approved in board’s meeting
c) earlier than the date on which the accounts are approved by the management
d) Both (a) and (b)

The Correct Answer Is:

c) earlier than the date on which the accounts are approved by the management

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Who among the following can be appointed as special auditor by the Central Government?

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Who among the following can be appointed as special auditor by the Central Government?

Who among the following can be appointed as special auditor by the Central Government?

 Options:

a) The statutory auditor
b) chartered accountant in practice
c) Any chartered accounted who is not in practice
d) Both (a) and (b)

The Correct Answer Is:

b) chartered accountant in practice

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