Internal Auditor Is Appointed By MCQ

Multiple choice questions of Subject Commerce Internal Auditor Is Appointed By MCQ ( Internal Auditor Is Appointed By MCQ Quiz ) for Entrances (Entrance Exam) Conducted by different Central and State Universities are given below.

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Internal Auditor is Appointed by MCQ | Auditing is Compulsory for MCQ

1. Various types quality

(a) product

(c) management (system)

(b) process

(d) All of these

Ans. d

2. When the auditor is an employee of the organisation being audited (auditee), the audit is classified as quality audit.

(a) internal 

(b) external

(d) Both ‘a’ and ‘b’

(c) compliance

Ans. a

3. A blue print of the plan for conducting the audit work known as

(a) audit report

(b) audit prograrmme

(d) All of these

(c) audit notebook

Ans. b

4. In case of time constraint, audit is conducted through

(a) test checking

(c) balance sheet audit

(b) routine checking

(d) None of these

Ans. b

5. A .. .. has been assigned the role of secretarial auditor.

(a) chartered accountant

(b) company secretary

(c) cost and management analyst

(d) corporate lawyer

Ans. b

6. The most comprehensive type of audit is the system audit which examines suitability and effectiveness of the system as a whole.

(a) quantity

(c) preliminary

(b) quality

(d) sequential

Ans. b

7. Who is basically considered the custodian authority for audit working papers?

(a) Auditor

(c) Managing director

(b) Company secretary

(d) All of these

Ans. a

8. The sole purpose of conducting the audit is to

(a) tind out the traudand punish the person responsible fort

(b) prepare the book of aocounts authenticabe and true

(c) certify the fnancial postion of the concern

(d) None of the above

Ans. b

9. From the foillowing, which is not a method of obtaining audit evidencel

(a) Observation

(c) Computation

(b) inspection

(d) Accounting statistics

Ans. d

10. In practice, an internal auditor is appointed by the

(b) Board of Directors

(d) management

(a) shareholders

(c) Central Govemment

Ans. d

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12. What is not recorded in audit notebook? tai Accounting statistics

(b) important baliances

(c) Analyes of transactions and taances id Audt progranme

Ans. c

13. When an auditor resigns, the vacancy is filled by

(a) managing director

(c) Centra Govemment

(b) sharehoiders

(d) Any one of them

Ans. b

14. Cost auditor is appointed by

(a) the Board of Directors

(b) shareholders

(c) Centra Govemert

(d) Any one of them

Ans. a

15. Each of the three parties involved in an audit. play a role that contributes to its success.

(a) the client, the auditor and the auditee

(b) the client, the auditor and the moderator

(c) the clent, the moderator and he moderator

(d) the client the auditor and the audit

Ans.  d

16. Cost auditor submits his report within the prescribed duration to

(a) the Board of Directors

(b) the Central Government of India with a copy to company

(c) the shareholders

(d) Nore of the sibove

Ans. b

17. An audit is usually conducted in three steps.

1. A pre eramination or opening meeting with the auditee marks the beginning of the process

2. Involves a suitability audir of the documented procedures against the selected reference standard.

3. The auditor esamines in depth the implementation of the quality system.

(a) True


(c) 1 and 2 are true

(b) Fase

(d) 1 and 3 are ture

Ans. a

18. Internal audit helps in

(a) internal check

(c) final audit

(b) preparation of account

(d) All of these

Ans. c

19. Out of the following, which one is not required in final report of the auditor?

(a) Type of audit conducted

(b) Characteristics of audit

(c) Identification of involved parties: auditor, auditee and third party

(d) Audit team members

Ans. b

20. The scope of audit in a partnership firm is governed by

(a) Partnership Act

(b) agreement between the partrers

(c) partnership deed

(d) None of the above

Ans. b

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21. The time required and costs involved in an external audit are much higher as compared to internal audits.

(a) True

(c) May be true

(b) False

(d) May be false

Ans. a

22. Audit is a fact-finding process that compares actual results with

(a) specified standards and plans

(b) expected results

(c) premature results

(d) preliminary results

Ans. a

23. The term ‘weakness letter’ is concerned with

(a) external auditor

(c) audit report

(b) internal audit

(d) internal check

Ans. b

24. The is also expected to provide the resources needed and select staff members to accompany the auditors.

(a) auditor

(0) internal auditor

(b) client

(d) auditee

Ans. d

25. Under Section 233B, a cost audit of a company is required

(a) in addition to the statutory audit

(b) along with the statutory audit

(c) in either of the case

(d) None of the above

Ana. a

26. An auditor of a company is suppose to report to

(a) shareholders

(b) Board of Directors

(d) All of these

(c) managing director

Ans. a

27. For the benefit of the organisation, quality auditing should only report non-conformances and corrective actions but should not highlight areas of good practice.

(a) True

(c) May be true

(b) False

(d) May be false

Ans. b

28. To comply with the statutory requirement is the concern of

(a) external audit

(c) internal audit

(b) vouching

(d) All of these

Ans. a

29. An auditor is required to inform the RoC in writing about his acceptance of appointment within

(a) 7 days

(c) 30 days

(b) 15 days

(d) 45 days

Ans. c

30. Which of the following reports is concerned with the corporate governance?

(a) Sabharamanyam report

(b) Kurmaramangalam birla report

(c) Narshimahan committee report

(d) None of the above

Ans. b

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31. Which of the following statements is correct?

(a) Audit of an educational institution is compulsory if it is run by a charitable trust

(b) A club is treated as commercial establishment

(c) The accounts of a charitable trust can be audited by any person who belongs to accountancy profession

(d) Audt of a charitable trust is not compulsory under law

Ans. a

32. Auditing standards will apply to

1. the individual auditor

2. the audit department

3. the auditee organisation

4. the head of the auditee organisation

(a) Only 1

(c) 1, 2 and 3

(b) 1 and 2

(d) 1,2 and 4

Ans. b

33. Independence permits internal auditors to render impartial and unbiased judgements. The best way to achieve independence is through

(a) individual knowledge and skils

(b) organisational status and objectivity

(c) supervision within the organisation

(d) organisational knowledge and skills

Ans. b

34. Under the Constitution of India, it is the duty of the Cand AG of India to audit and report on the accounts of the

(a) Union Govermment

(b) governments of each state

(c) Government of Union Territory having leginlative assembly

(d) All of the above

Ans. d

35. Before commencing detailed work of performance audit, the AGI Audit shall hold an entry conference with

(a) chief secretary to the government

(b) governor

(c) secretary to the government of the concemed department

(d) additional secretary to the govermment of the concerned department

Ans. c

36. The normal time limit for communicating reply to draft SAR by the CEO of the corporation shall be

(b) two weeks

(d) one month

(a) one week

(c) 15 days

Ans. b

37. Internal auditors are responsible to

(a) the Board of Directors

(c) Both a’ and ‘b’

(b) management

(d) Neither ‘a’ nor b

Ans. c

38. The internal auditing profession is believed to have advanced primarily as a consequence of

(a) increased interest by graduating students and experienced auditors

(b) the limitation of external audit scope

(c) job qualitication specifications that include added emphasis on background knowledge and skills

(d) increased oomplexity and sophistication of business operations

Ans. d

39. The audit committee can serve several important purposes, some of which directly benefit internal auditing. The most significant benefit provided by the audit committee to the internal auditor is

(a) protecting the independence of the internal auditor from undue management influence

(b) reviewing annual audit plans and monitoring audit results

(c) approving audit plans, scheduling, staffing and meeting with the internal auditor as needed

(d) reviewing copies of the procedures manuals for selected company operations and meeting with company officials to discuss them

Ans. a

40. At the time of vouching the journal, an auditor must ensure that

(a) every journal entry has a narration

(b) the transaction is supported by documentary proof

(c) the transaction is authorised by management people

(d) All of the above

Ans. b

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41. When the work of accounting done by one person is checked by other person within the organisation is known as

(a) internal audit

(c) vouching

(b) internal check

(d) routine checking

Ans. b

42. Which statement well describes the objective of internal auditing?

(a) To assist members of the organisation in the effective discharge of their responisibilities

(b) To assist management with the design and implementation of accounting and control systems

(c) To examine and evaluate an organisation’s accounting system as a service to management

(d) To monitor the organisation’s internal control system for the external auditors

Ans. a

43. Which of the following best describes an internal auditor’s purpose in reviewing the adequacy of the system of internal control?

(a) To help determine the nature, timing and extent of tests necessary to achieve audit objectives

(b) To ensure that material weaknesses in the intemal control system are corrected

(c) To determine whether the internal control system provides reasonable assurance that the organisation’s objectives and goalis are met efficiently and economically

(d) To determine whether the internal control system ensures that the accounting records are correct and that financial statements are fairly stated

Ans. c

44. Auditing financial statements prepared under GASB reporting model required separate materiality determinations for each

(a) opinion unit

(c) component unit

(b) activity

(d) None of these

Ans. b

45. Out of the below mentioned assets, which does not need physical verification?

(a) Stock

(c) Computers

(b) Plant and machinery

(d) Goodwill

Ans. d

46. What is called the backbone of auditing?

(a) Vouching

(c) Internal audit

(b) Internal control

(d) None of these

Ans. a

47. Engagements in which auditors provide an examination, a review or an agreed upon procedure report on a subject matter or on an assertion about a subject matter are called

(b) financial related audits

(a) financial audits

(c) attestation engagements

(d) performance audits

Ans. c

48. Which of the following statements about the single audit is correct?

(a) It does not apply to non-govermmental not-for-profit organisations

(b) Its purpose is to improve the financial management of State and Local Governments with respect to federal financial assistarice programmes

(c) Both are true

(d) Both are wrong

Ans. b

49. Before starting the audit work, what an auditor considered for getting the information relating to its internal working?

(a) Memorandüm of Association

(b) Aticie of Association

(c) Prospectus

(d) Any of the above

Ans. b

50. A prospectus investigation usually covers the previous

(a) one year

(c) three years

(b) two years

(d) five years

Ans. d

51. In general, how many persons get involved in the work of vouching?

(a) one

(c) three

(b) two

(d) four

Ans. b

For More Commerce MCQs Topic Wise Click Here

1. Bookkeeping and Accounting 2. Not-for-Profit Organisations
3. Partnership4. Accounting for Specific Business and Transactions
5. Corporate Accounting6. Cost Accounting
7. Management Accounting8. Business Communication
9. Business Organisation and Management10. Business Environment
11. Marketing Management12. Financial Management
13. Human Resource Management14. Office Management
15. Consumer’s Theory and Demand16 Production, Cost, Revenue
17. Supply18. Forms of Market
19. National Income20. Government Budget
21. Theory of Income & Employment and Inflation22. Money and Banking
23. International Trade24. India’s Foreign Trade and international Organisations
25. Industrial Policy26. Statistics
27. Business Law28. Company Law
29. Auditing30. Entrepreneurship Development
31. Income Tax32. Insurance
33. International Business34. Company Secretary and Secretarial Methods
35. Stock Exchange

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