Practice Auditing Questions and Answers

• Internal auditor is removed and appointed by which among the following?
• Which of the following statements is true for cash basis accounting?
• Which of the following financial statements can be prepared using a receipt and payment account?
• Suppose an NPO receives a donation of $10,000 from a donor. The entry to record this transaction would be as follows?
• Which principle requires that the financial affairs of the business must be kept separate from the personal affairs of the owner(s)?
• Which of the following financial statements shows a company's retained earnings over time?
• Which auditing standard outlines the auditor's responsibilities relating to fraud in an audit of financial statements?
• Process of verifying the documentary evidences of transactions are known as:
• A sale of Rs. 25,000 to A was entered as a sale to B. This is an example of _
• ‘Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of:
• Which of the following statements is not true?
• The scope of internal audit is decided by the :
• Internal check is carried on by
• ________ the audit risks _________ the materiality and _______ the audit effort
• ……… is an audit on a legal entity (the auditee) by two or more auditors to produce a single audit report, thereby sharing responsibili...
• Which of the following deductions is/are available as deduction from income under both the old and new tax regime of Income Tax?
• During an audit, the auditor notices that a single person in a company is responsible for authorizing transactions, maintaining records, and custody of ass...
• A printing firm completes a specific order for 5,000 brochures for a client. What is the most appropriate costing method?
• Which of the following best describes the principle of professional skepticism in auditing?
• Which of the following constitutes the most reliable audit evidence?
• An auditor finds that significant information is missing from financial statements and the effect is material and pervasive. What type of audit opinion sho...
• While auditing cash payments, an auditor examines supporting documents like invoices, payment vouchers, and authorizations. This process is called:
• Internal audit is conducted to:
• If the auditor is unable to obtain sufficient audit evidence and the possible effect is material but not pervasive, what type of opinion is issued?
• As per SA 230, audit working papers must be retained for:
• CARO, 2020 is applicable to which of the following companies?
• An auditor identifies a material misstatement due to fraud in financial statements. What should be his immediate course of action?
• The internal audit report of XYZ Ltd. reveals irregularities in procurement. The statutory auditor plans to rely on internal audit work. Which standard gui...
• An auditor finds material misstatements due to fraud but the management refuses to take corrective action. What should be the auditor’s next step?
• Who is primarily responsible for preventing and detecting frauds in an organisation?
• An auditor finds management has overridden controls, leading to possible material misstatements. As per SA 240, what should the auditor do?
• During audit of XYZ Ltd., the auditor noted that the management concealed certain pending litigations that could affect profitability. However, the CFO ins...
• A statutory auditor of a listed company evaluates whether the going concern assumption holds. He observes continuous losses, negative net worth, and pendin...
• Which of the following is a primary objective of auditing?
• During the audit of ABC Ltd., the auditor identifies that a major debtor who owed ₹2 crore has declared bankruptcy post year-end but before signing of th...
• While auditing the books of a listed company, the auditor finds that management is unwilling to provide audit evidence for certain related party transactio...