Auditing MCQs

A: Substantive tests designed to assess control risk

B: Substantive tests designed to evaluate the validity of managements representation letter

C: Substantive tests designed to study relationships between financial and non­financial

D: All of the above

A: Tracing of purchases recurred in the purchase book to purchase invoices.

B: Comparing aggregate wages paid to number of employees

C: Comparing the actual costs with standard costs

D: All of them are analytical procedure

A: clients unedited account balance

B: clients unedited account balance adjusted for trends in the industry

C: Prior year audited balance

D: Prior year audited balance adjusted for trends in the industry

A: Lower, Higher, Lower

B: Lower, Lower, Higher

C: Higher, Lower, Lower

D: Lower, Higher, Higher

A: Amount of known misstatement is documented in working papers

B: Estimates of the total likely misstatement is less than materiality level

C: Estimate of the total likely misstatement is more than materially level

D: Estimates of the total likely misstatement cannot be made

A: It is conducted at regular interval

B: It may be carried out on daily basis

C: It is needed when the organization has a good internal control system

D: It is expensive

A: Materiality is a relative concept

B: Materiality judgments involve both quantitative and qualitative judgments

C: Auditors consideration of materiality is influenced by the auditors perception of the needs of an informed decision maker who will rely on the financial statements

D: At the planning state, the auditor considers materiality at the financial statement level only

A: Complete audit

B: Completed audit

C: Final audit

D: Detailed audit

A: Assets

B: Income and expense accounts where appropriate

C: Liabilities

D: All of the above

A: Prior years errors

B: The auditors remuneration

C: Adjusted interim financial statements

D: Prior years financial statements