PRACTICAL AUDITING MCQ
Auditing typically refers to financial statement audits or an objective examination and evaluation of a company’s financial statements – usually performed by an external third party. Audits can be performed by internal parties and a government entity, such as the Internal Revenue Service (IRS)
11. Management audit means
a) Audit undertaken on behalf of the management
b) Evaluating performance of various management processes and functions
c) Audit undertaken on behalf of Govt. to punish management
d) Compulsory audit
Answer:- b) Evaluating performance of various management processes and functions
12. Systems audit implies
a) Systematic examination of accounts
b) Audit undertaken to improve auditing systems
c) Enquiring accounting and control systems
d) Checking the performance of management
Answer:- c) Enquiring accounting and control systems
13. Internal audit means
a) Audit undertaken to ascertain truth and fairness of state of affairs
b) Audit undertaken internally to evaluate management functions
c) Audit undertaken by employees of the organization to check financial irregularities
d) Audit by independent auditor to improve internal affairs
Answer:- c) Audit undertaken by employees of the organization to check financial irregularities
14. Internal audit is
a) Compulsory for a company with paid-up capital of Rs. 25 lakh and above
b) Voluntary for a company
c) Not necessary for a company
d) Necessary for a company
Answer:- b) Voluntary for a company
15. Internal audit is undertaken
a) By independent auditor
b) Statutorily appointed auditor
c) By a person appointed by the management
d) By Government auditor
Answer:- c) By a person appointed by the management
16. Internal auditor is appointed by the
a) Management
b) Shareholders
c) Government
d) C & A-G
Answer:- a) Management
17. The object of internal check is to
a) Control wastage of resources
b) Prevent errors and frauds
c) Verify the cash receipts and payments
d) Facilitate quick decision by the management
Answer:- b) Prevent errors and frauds
18. Effective internal check system reduces
a) The liability of auditor
b) Work of auditor
c) Both work as well as auditor
d) Responsibilities of an auditor
Answer:- b) Work of auditor
19. Internal check is a part of
a) Internal audit
b) Internal accounting
c) External audit
d) Internal control
Answer:- d) Internal control
20. Internal check is carried on by
a) Special staff
b) Internal auditor
c) Accountant
d) None of the above
Answer:- d) None of the above
