Auditing Quiz, MCQs


Accounting, Banking and Finance MCQs


Quiz # 1, MCQs

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  1. 1)

    During audit of the financial statements, the auditors are concerned with the verification and determination of which one of the following items?

    • A) Statements, accuracy, and feasibility
    • B) Date, accuracy, and reliability
    • C) Policies, value, and reliability
    • D) Cycle, policies, and reliability

  2. 2)

    The phrase (Scope of an Audit) refers to which one of the followings?

    • A) Engagement letters
    • B) Audit procedures
    • C) Audit evidence
    • D) Reasonable assurance

  3. 3)

    The factors that affect reasonable assurance include all of the following EXCEP:

    • A) Use of testing (Sampling)
    • B) Interest limitations of accounting and internal control
    • C) Remuneration of the auditor
    • D) Persuasive nature of audit evidence

  4. 4)

    A well designed Internal Control Questionnaire (ICQ) should incorporate the following EXCEPT:

    • A) Be a sufficient source of data for the evaluation of internal controls
    • B) Identity the internal control system's strengths and weaknesses
    • C) Be organized by individual functional organizations
    • D) Should include simple yes or no responses but no narrative responses

  5. 5)

    Which one of the following is FALSE about Internal Control Evaluation Checklists (ICEC)?

    • A) ICEC is developed to overcome the shortcomings of Internal Control Questionnaire
    • B) The rules of constructing ICEC is different than construction of Internal Control Questionnaire
    • C) It is designed to determine, whether desirable internal controls are present
    • D) It is normally employed where system's information has already been recorded

  6. 6)

    An auditor's flow chart of an entity's information system is a diagrammatic representation. It depicts what kind of information?

    • A) Program for tests of control
    • B) Understanding of the system
    • C) Understanding of the types of irregularity that are probable given by the present system
    • D) Documentation of the study and evaluation of the system

  7. 7)

    Which one of the following is NOT a factor included in the control environment of an entity?

    • A) Integrity and ethical values
    • B) Risk assessment
    • C) Commitment to competence
    • D) Organization structure

  8. 8)

    The audit which is a review of any part of an entity's operating procedures and methods is known as:

    • A) Financial statement audits
    • B) Operational audits
    • C) Technical Audits
    • D) Compliance audits

  9. 9)

    Analytical procedures used in planning an audit should focus on identifying which one of the followings?

    • A) Areas that may represent specific risks relevant to the audit
    • B) Material weaknesses in the internal control structure
    • C) The predictability of financial data form individual transactions
    • D) The various assertions that are embodied in the financial report

  10. 10)

    Which one of the following is an objective of the internal audit?

    • A) To report on financial statements
    • B) To check accounting system and internal control are operating efficiently
    • C) To determine the accuracy of financial statement values and disclosures
    • D) To establish a control system in the company