Auditing

1. Statement I: Management audit is a part of financial audit. Statement II: Management audit is not compulsory under any law.

Only statement I is true
Only statement II is true
Both statements are true
Both statements are false

Detailed SolutionStatement I: Management audit is a part of financial audit. Statement II: Management audit is not compulsory under any law.

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2. In which type of energy audit readily available data is used to analyse the performance?

General audit
Preliminary audit
Safety audit
System audit

Detailed SolutionIn which type of energy audit readily available data is used to analyse the performance?

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3. Acontinuous audit is especially needed for

Any trading organization
Smaller concern
Banking business
Manufacturing companies

Detailed SolutionAcontinuous audit is especially needed for

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4. The main objective of verification of assets is

Physical verification of assets
Checking the values of assets
Examining the authority of their acquisition
All of the above

Detailed SolutionThe main objective of verification of assets is

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5. Interim audit refers to

Continuous examination of accounts
Intermittent examination of accounts
Audit work to find and check the interim profits of a company
Carrying on audit for bonus purpose at the end of the year

Detailed SolutionInterim audit refers to

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6. Checking the date of voucher on the voucher during vouching, mainly helps the auditor to obtain evidence that

The transaction relates to current year
The transaction has taken place
The transaction is genuine
The transaction is legal

Detailed SolutionChecking the date of voucher on the voucher during vouching, mainly helps the auditor to obtain evidence that

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7. The reason(s) of qualified report is/are

Violation of generally accepted principles of auditing
Violation of accounting principles
Lack of adequate information and explanations
All of the above

Detailed SolutionThe reason(s) of qualified report is/are

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8. Investigation is conducted:

As a good inquiry
To establish the correctness of the accounting records
For some specific purpose
As a constitutional requirement

Detailed SolutionInvestigation is conducted:

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9. Safety audit is mandatory for

Manufacturing industries
Hazardous industries
Textile industries
Mining industries

Detailed SolutionSafety audit is mandatory for

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10. The auditor is most likely to examine related party transactions very carefully while vouching:

Credit sales
Sales returns
Credit purchases
Cash purchases

Detailed SolutionThe auditor is most likely to examine related party transactions very carefully while vouching:

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