Practice Auditing Questions and Answers

• 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...
• Which of the following best describes the primary objective of a system of internal control in a large organization?
• Under CARO 2020, which of the following matters is required to be reported by the auditor?
• According to SA 240, which of the following is TRUE regarding auditor’s responsibility in detecting fraud?
• Which of the following is NOT a key element of an independent auditor’s report under SA 700?
• Which of the following is NOT part of auditor’s understanding of the entity and its environment under SA 315?
• Which of the following provides the most reliable audit evidence?
• Which of the following best describes analytical procedures as per SA 520?
• An auditor identifies a significant risk around revenue cut-off due to manual end-period adjustments and complex multi-element contracts. The client propos...
• During a statutory audit, the auditor discovers a pattern of journal entries posted near year-end reversing shortly after year-end that inflate reported pr...
• Client has breached debt covenants; lender issued waiver valid for 9 months after balance sheet date. Auditor notes liquidity support from group company bu...
• An auditor uses statistical sampling to test receivables confirmations. Why is statistical sampling often preferred over judgmental sampling?
• Why must auditors obtain an understanding of internal control even if they do not intend to rely on it?