Term ‘Audit’ is derived from a Latin word “audire” which means ?
A. To investigate
B. To hear
C. To inspect
D. To examine
AUDITING MCQS
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Main object of an audit is?
A. Detection and Prevention of fraud and error
B. . Expression of opinion
C. a and b
D. Depends on the type of audit.
An auditor is like a ?
A. Watch dog
B. May both according to situation
C. Blood haunt
D. None of them
Process of verifying the documentary evidences of transactions are known as ?
A. Testing
B. Verification
C. Auditing
D. Vouching
Auditing is compulsory for ?
A. Partnership firms
B. Proprietary Concerns
C. Small scale business
D. Joint stock Companies
Concealment of shortage by delaying the recording of cash receipts is known as ?
A. Misappropriation
B. Lapping
C. Embezzlement
D. None of them
Fundamental objective of the audit of a company is to ?
A. Attest to the credibility of the company’s accounts
B. Assess the effectiveness of the company’s performance
C. Protect the interests of the minority shareholders
D. Detect and prevent errors and fraud
Why do auditors concentrate their efforts on material items in accounts ?
A. Because the directors have asked for it
B. Because they are easier to audit
C. Because the risk to the accounts of their being incorrectly stated is greater
D. Because it reduces the audit time
How long is the auditor’s term of office ?
A. Until the financial statements are complete
B. Until the next AGM (Annual General Meeting)
C. Until the audit is complete
D. Until the directors remove them
Independent auditor’s primary responsibility is to?
A. the shareholders
B. the company’s bank
C. the directors
D. the company’s creditors (payables)