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)
21. Internal check is suitable for
a) Larger concerns
b) Smaller concerns
c) Petty shop- keepers
d) None of the above
Answer:- a) Larger concerns
22. Internal check is carried on by
a) Staff specially appointed for the purpose
b) Internal auditor
c) The members of the staff among themselves
d) Supervisor of the staff
Answer:- c) The members of the staff among themselves
23. Internal check is essential for
a) Petty traders
b) Cash transactions in a large concern
c) A concern using automatic equipments
d) None of the above
Answer:- b) Cash transactions in a large concern
24. Misappropriation of goods may be checked by
a) Proper supervision over stock
b) Checking of employees
c) Punishment of employees
d) None of the above
Answer:- a) Proper supervision over stock
25. Window dressing implies
a) Curtailment of expenses
b) Checking wastages
c) Under- valuation of assets
d) Over- valuation of assets
Answer:- d) Over- valuation of assets
26. Falsification of accounts is undertaken by
a) Auditors
b) Clerks
c) Accountants
d) Responsible officials
Answer:- d) Responsible officials
27. Errors of omission are
a) Technical errors
b) Error of principle
c) Compensating errors
d) None of the above
Answer:- a) Technical errors
28. Test checking refers to
a) Testing of accounting records
b) Testing of honesty of employees
c) Intensive checking of a selected number of transactions
d) Checking of all transactions recorded
Answer:- c) Intensive checking of a selected number of transactions
29. Test checking should not be applied to
a) Sales book
b) Purchase book
c) Bank reconciliation statement
d) Bills book
Answer:- c) Bank reconciliation statement
30. Test checking should not be applied to
a) Purchase book
b) Sales book
c) Stock book
d) Cash book
Answer:- d) Cash book
