CMA INTER AUDIT MCQ BOOKLET

CA. Divyanshu Banzal

Multiple Choice Questions

1. Which of the following is not an audit risk?
A. Inherent Risk
B. Detection Risk
C. Control risk
D. Omission Risk
Ans: D

2. Permanent Audit File does not contain

A. A record of study and evaluation of internal control system
B. Significant audit observations of earlier years
C. Copies of management letters
D. Analysis of significant ratios and trends
Ans: C

3. Audit Procedures to obtain audit evidences include

A. Compliance Procedure
B. Substantive Procedure
C. Both of A and B
D. Neither A nor B
Ans: C

4. SA 530standsfor
A. Audit Documentation
B. Audit Sampling
C. Responsibility of Joint Auditor
D. Agreeing the terms of Audit Engagements
Ans: B

5. Which of the following is not a part of Temporary Audit file?

A. Correspondence relating to acceptance of annual reappointment.
B. Audit programme.
C. Extracts of minutes of board meetings
D. Legal and organisation structure of the company.
Ans: D

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6. SA230standsfor-
A. Quality control for an audit of Financial Statements
B. Agreeing the terms of Audit Engagements.
C. Audit Documentation
D. Responsibility of JointAuditor
Ans: C

7. Internal Audit is mandatory for every unlisted public company having paid up
share capital of
A. `100crores during the preceding financialyear
B. `50crores during the preceding financialyear
C. `500croresduring the preceding financialyear
D. `200croresduring the preceding financialyear
Ans: B

8. Checklist contains the instructions to be followed by the

A. Employer of the organisation
B. Employee of the organisation
C. Banker to the organisation
D. Audit staff engaged by the auditor of the organization
Ans: D

9. SA210standsfor
A. Audit Planning
B. Audit Working Papers
C. Agreeing the terms of Audit Engagements
D. Audit Documentation
Ans: C

10. Test checking requires application of .

A. mathematical theory
B. sampling theory
C. geometry theory
D. stakeholder theory

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Ans: B

11. Audit is in independent examination of

A. financial information
B. no financial information
C. both
D. none
Ans: A

12. Auditor assess -

A. reliable information
B. sufficient information
C. both
D. none
Ans: C

13. Basic principles governing an audit does not includes-

A. confidentiality
B. audit evidence
C. planning
D. dependency
Ans: D

14. Objective of audit is

A. prevention of fraud
B. detection of fraud
C. both
D. none
Ans: C

15. Auditor should obtain -

A. reasonable assurance
B. absolute assurance
C. both
D. none
Ans: A

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16. Audit does not include

A. checking
B. advice to management
C. vouching & verification
D. preparation of books of accounts
Ans: D

17. Statutory audit is

A. mandatory
B. Compulsory
C. both
D. none
Ans: A

18. An audit which is conducted considering the particular area of accounting

which the owner thinks essential is known as -------.
A. Complete Audit
B. Partial Audit
C. Balance Sheet Audit
D. Cost Audit
Ans: B

19. -----------is conducted with a particular object in view, viz to know financial
position, earning capacity, prove fraud, invest capital, etc.
A. Auditing
B. Accounting
C. Investigation
D. Sampling
Ans: C

20. Audit is derived from

A. latin word
B. French word
C. Italian word
D. Japanese word
Ans: A

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21. Periodical audit is conducted at
A. At the end of accounting year
B. At the end of each quarter
C. At the end of month
D. After every 15 days
Ans: A

22. Assertions are representations made by –

A. Debtors.
B. Bank Statement.
C. Creditors.
D. Management.
Ans: D

23. While conducting enquiry with the management, the auditor Should apply –
A. Professional Skepticism
B. Professional Judgement
C. Both of the above
D. None of the above
Ans: C

24. Segregation of duties is a part of –

A. Internal Audit.
B. Internal Review
C. Internal Control.
D. Internal Inquiry
Ans: C

25. The objectives of Internal Control include –

A. Proper recording of transactions
B. Authorization of transactions.
C. Safeguarding of Assets.
D. All of the above
Ans: D

26. The factors that contribute to inherent risk can be –

A. Related Party Transaction.

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B. Inattentive management.
C. Management integrity.
D. All of the above
Ans: D

27. The auditor shall express opinion when he concludes that the financial
statements are prepared, in all material respects, in accordance with the
applicable financial reporting framework.
A. Adverse.
B. Qualified.
C. Unmodified / Clear.
D. Disclaimer of opinion.
Ans: D

28. Audit Risk refers to risk that

A. Audit sample may be inappropriate
B. Auditor may be unable to complete auditing engagement in timely
manner
C. If financial statements are materially misstated then auditor may express
an inappropriate opinion.
D. All of these
Ans: A

29. Detection Risk refers to

A. Risk of non-detection of material misstatements in financial statements.
B. Risk of an inappropriate opinion
C. Risk of failure of internal control in the prevention or detection of material
misstatements
D. Susceptibility of account balances or class of transaction to be materially
misstated, assuming there were no internal controls
E. Ans: A

30. Which of the following in not an assertion about classes of transactions and
events for the period under audit:
A. Accuracy
B. Occurrence
C. Classification

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D. Existence
Ans: D

31. Which of the following is not an assertion about classes account balances at
the period end
A. Existence
B. Accuracy
C. Valuation
D. Rights and Obligations
Ans: A

32. Professional Skepticism is an attitude of –

A. Debate.
B. Argument.
C. Questioning.
D. None of the above.
Ans: C

33. Audit risk includes –

A. Detection risk.
B. Inherent risk
C. Control risk.
D. All of the above.
Ans: D

34. Substantive audit procedure comprises:

A. Substantive analytical procedures
B. B- Test of details
C. C- Both (a) and (b)
D. D- None of these
Ans: C

35. The appropriateness of the audit evidence is –

A. Its relevance.
B. Its reliability.
C. Both A & B.
D. None of the above.

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Ans: C

36. The sufficiency of audit evidence is –

A. The measure of its quality.
B. The measure of its quantity.
C. The measure of its simplicity.
D. All of the above
Ans: B

37. The quantity of the audit evidence is affected by –

A. The quality of such evidence.
B. Assessed risk of material misstatement.
C. Both of the above.
D. None of the above
Ans: C

38. Analytical procedures include the study of relationship among –

A. Financial Data only.
B. Non – Financial Data only
C. Both Financial & Non – Financial Data.
D. None of the above.
Ans: C

39. Nature of audit evidence can be –

A. Documentary.
B. Visual.
C. Oral.
D. All of the above
Ans: D

40. In case of public or private companies having outstanding loans or

borrowings from bank or public financial institutions exceeding Rs----------
Cr at any time during preceding financial year shall require to appoint internal
auditor to conduct internal audit of books of accounts
A. 50
B. 100
C. 150
D. 200

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Ans: B

41. The first section of the auditor’s report shall include –

A. Auditor’s Opinion.
B. Introductory paragraph.
C. Basis of opinion.
D. None of the above
Ans: A

42. Auditor’s opinion in his report shall be followed by paragraph as per SA 700.
A. Key Audit Matters.
B. Reasons for Modification in opinion
C. Basis of Opinion.
D. None of the above
Ans: B

43. Qualified opinion is issued when the auditor concludes that misstatements are
–
A. Material but not Pervasive.
B. Material and Pervasive.
C. Immaterial but Pervasive.
D. Immaterial and not pervasive.
Ans: A

44. While doing the audit of X Ltd. (a listed company), it was identified that the
depreciation on fixed assets has been undercharged by an amount of
Rs.70000. Suggest the opinion to be issued by the auditor on such misstated
financial statements.
A. Disclaimer of Opinion.
B. Adverse Opinion.
C. Clear Opinion.
D. Qualified Opinion.
Ans: D

45. Audit documentation is also known as –

A. Work papers.
B. Both A & B.

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C. Working papers.
D. Working File
Ans: C

46. As per SA-200 “Overall Objectives of the Independent Auditor,” in

conducting an audit of financial statements, the overall objectives of the
auditor are:
A. To report on the financial statements
B. To obtain reasonable assurance
C. Both (a) and (b) above
D. None of the above
Ans: C

47. Working papers should be preserved for –

A. Minimum 7 years.
B. Maximum 9 years.
C. Minimum 5 years.
D. Minimum 10 years
Ans: A

48. Permanent audit file is the one that –

A. Contains matters of current period.
B. Contains matters of continuing importance.
C. Is preserved permanently.
D. None of the above
Ans: A

49. Current audit file is the one that –

A. Contains matters of continuing importance.
B. Is preserved for less than 1 year.
C. Contains matters of current period.
D. None of the above
Ans: C

50. Can the working papers be served to the management?

A. Yes. It has to be served to management.
B. Yes, but at auditor’s discretion
C. No. SA 230 prohibits that.

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D. No. IT will be decided by the branch auditor
Ans: B

51. Audit documentation provides evidence that the audit complies with –
A. Standards on Auditing.
B. Companies Act, 2013.
C. Chartered Accountants’ Act, 1949
D. All of the above
Ans: A

52. The relationship between the materiality and audit risk is –

A. No relation.
B. Direct relationship
C. Inverse relationship.
D. Cannot say.
Ans: C

53. Material is determined at –

A. Planning stage, but may be revised at later stage depending on further
information gathered
B. Planning stage
C. After the assessment of risk
D. None of the above
Ans: A

54. Appointment of auditor shall be intimated in .................

A. Form ADT 1
B. Form ADT 2
C. Form ADT 3
D. Form ADT 4
Ans: A

55. An auditor whether individual or firm , against whom final order has been
passed by NCLT under section 140(5) of Companies Act , 2013 shall not be
eligible to be appointed as an auditor of any company for a period of from the
date of passing of the order
A. 2 years
B. 3 years

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C. 7 years
D. 5 years
Ans: D

56. In case of government companies auditor is appointed for-------- at time

A. One year
B. Two year
C. Three year
D. Five year
Ans: A
57. If a relative acquires security exceeding Rs 1 Lakh, then auditor shall take
corrective action within days of such acquisition so as to maintain the limit of
Rs 1 Lakh.
A. 120
B. 30
C. 90
D. 60
Ans: A

58. With reference to disqualification of appointment of auditor Business

relationship means any transaction entered into for a commercial purpose,
except commercial transaction which are in nature of professional services
permitted to be rendered by an auditor or audit firm under the ........ rules or
regulations made there under
A. Companies Act, 2013
B. Chartered Accountants Act , 1949
C. Both (a) and (b)
D. Income-tax Act, 1961
Ans: B

59. Identify the correct one:

As per section 139 of Companies Act 2013, every Company shall at the first
annual general meeting , appoint an individual or firm as an auditors as an
auditor who shall hold office from:
A. from the conclusion of that meeting till the conclusion of its fifth annual
general meeting
B. from the conclusion of that meeting till the conclusion of its seventh
annual general meeting
C. from the conclusion of that meeting till the conclusion of its sixth annual

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general meeting
D. None of the above
Ans: C

60. Identify the correct one:

A. Company shall inform the auditor concerned of his or its appointment, and
also file a notice of such appointment with the registrar within fifteen days
of the meeting in which the auditor is appointed
B. Company shall inform the auditor concerned of his or its appointment,
and also file a notice of such appointment with the registrar within seven
days of the meeting in which the auditor is appointed
C. Company shall inform the auditor concerned of his or its appointment,
and also file a notice of such appointment with the registrar within thirty
days of the meeting in which the auditor is appointed
D. None of the above
Ans: A

61. In the case of a government company auditor shall be appointed within from
the commencement of the financial year
A. period of 180 days
B. period of 30 days
C. period of 60 days
D. period of 120 day
Ans: A

62. In the case of government company the auditor, till what period shall hold the
office?
A. till the conclusion of the annual general meeting
B. till the conclusion of the third annual general meeting
C. till the conclusion of the fifth annual general meeting
D. till the conclusion of the sixth annual general meeting
Ans: A

63. In the case, other than a Government company shall appoint the first auditor
of a company in the case of failure of the Board to appoint such auditor within
90days of .............
A. Shareholders ; after completion of 30 days given to the board
B. Central Government ; after completion of 30 days given to the board
C. Central Government from the date of registration.

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D. shareholders - from the date of registration
Ans: D

64. Casual vacancy (other than resignation) in the office of an auditor of a non-
government company be filled by the board of directors within.................
A. 30 days
B. 90 days
C. 60 days
D. None of the above
Ans: A

65. Auditor appointed in casual vacancy shall hold the office till ..........
A. Till the conclusion of the fifth annual general meeting
B. Till the conclusion of the next annual general meeting
C. Till the conclusion of the sixth annual general meeting
D. Till the unexpired term of the original Auditor
Ans: A

66. Under section 143(3), auditor has duty to report on internal financial controls
of the company. However, this requirement shall not apply to
A. A listed company
B. A foreign company
C. One Person Company
D. A Public Company
67. If Comptroller and Auditor –General of India does not fill the casual vacancy
within the said period the Shall fill the vacancy within next.................
A. Board of directors;90 days
B. Board of directors; 60 days
C. Board of directors;30 days
D. Shareholders; 30days
Ans: C

68. Where at any annual general meeting, no auditor is appointed or re-appointed

, the existing
A. continue to be auditor of the company
B. recommend the new auditor of the company
C. retire from office of auditor of the company

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D. none of the above
Ans: A

69. The books of account of every company relating to a period of not less than---
----- immediately preceding a financial year.
A. Six financial years
B. Eight financial years
C. Seven financial years
D. All financial years since existence
Ans: B

70. Which of the following companies are required to appoint internal auditor to
conduct internal audit of books of accounts of the companies?
A. Listed company
B. Unlisted public company having paid up share capital of Rs.50 Cr or more
during preceding financial year
C. Unlisted public company having outstanding deposits of Rs.25Cr or more
at any time during preceding financial year
D. All of the above
Ans: D

71. In case of public or private companies having turnover of Rs Cr or more

during preceding financial year shall require to appoint internal auditor to
conduct internal audit of books of accounts
A. 50
B. 100
C. 150
D. 200
Ans: D

72. Under section 140(4), the retiring auditor is entitled to

A. Make a representation against his removal
B. Request the company to circulate the representation to members
C. Personally communicate the members on one to one basis
D. Both (a) and (b)
Ans: D

73. As per Companies Act ,2013, NCLT can remove auditor of company...........

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A. Suo motu
B. On application from central Government
C. On application from any person concerned
D. Either (a) or (b) or (c)
Ans: D

74. When auditor resigns, he should file to Registrar of Companies

A. Form ADT 3
B. Form ADT 1
C. Form ADT 2
D. Form ADT 4
Ans: A

75. If auditor, in the course of performing his duties as auditor has reasons to
believe that an offence involving fraud is being or has been committed against
he shall immediately report the matter to authority
A. Company by its officer
B. Company by its employee
C. Company by outsider
D. Both (a) and (b)
Ans: D

76. Auditor shall report fraud to company to central government in………….if

amount involved in fraud is Rs 1 crore or more
A. Form ADT 4
B. Form ADT 2
C. Form ADT 3
D. Form ADT 1
Ans: A

77. In case of partnership firm as auditor of company, audit report shall be signed
by:
A. Any CA partner of the firm
B. Any partner of the partnership firm
C. Any CA employee of the firm
D. All CA partner of the firm

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Ans: A

78. An individual is disqualified for appointment as auditor of Co

A. If he is holding security of co having total face value exceeding Rs.
1,000/-
B. If he is holding security of co having total face value exceeding Rs. 1 Lakh
C. If he is holding any security of company, irrespective of face value of
security
D. None of these
Ans: A

79. An individual is disqualified for appointment as auditor of co if

A. His father is holding security of co having total face value of Rs 1 Lakh
B. His sister’s husband is holding security of co having total face value
exceeding Rs. 1 Lakh
C. His father is holding security of co having total face value exceeding Rs. 1
Lakh
D. His step daughter is holding security of co having total face value
exceeding Rs. 1 Lakh
Ans: C

80. An individual is disqualified for appointment as auditor of co if he is

indebtedness to co
A. Exceeding Rs. 5,00,000
B. Exceeding Rs. 1,00,000
C. Rs. 5,00,000
D. Any amount
Ans: C

81. Audit of which of the following companies is excluded from ceiling limit of
audit
A. Dormant Companies
B. Government Companies
C. Private Limited Company having paid up share capital Rs 100 Crore or
more
D. Audit of Public Companies
Ans: A

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82. A person shall not be appointed as auditor of co if he has been convicted by

court for an offence involving fraud and a period of……………years has not
been elapsed since such conviction
A. 5 Years
B. 7 Years
C. 8 Years
D. 10 Years
Ans: D

83. Audit of private limited company is exempted from ceiling on number of

audits if its
A. Paid up share capital is less than 20 crore
B. Paid up share capital is less than Rs. 50 crore
C. Paid up share capital is less than Rs. 10 crore
D. Paid up share capital is less than Rs. 100 crore
Ans: C

84. Rotation of auditor is not applicable on

A. Dormant Company
B. One Person Company
C. Small Company
D. Both (b) and (c)
Ans: A

85. Rotation of auditor is applicable on unlisted public company if

A. Its paid up share capital is more than Rs 10 Crore
B. Its paid up share capital is equal to or more than Rs 10 Crore
C. Its paid up share capital is more than Rs. 50 Crore
D. Its paid up share capital is equal to or more than Rs 50 Crore.
Ans: A

86. A break in the term for continuous period of…………..years shall be

considered as fulfilling the requirement of rotation
A. 1 Year
B. 3 Years
C. 10 Years

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D. 5 Years
Ans: D
87. As on date of appointment no audit firm having a common partner or partners
to audit firm, whose tenure has expired in a company, shall be appointed as
auditor of the same company for a period of………..years
A. 1
B. 5
C. 7
D. 10
Ans: B

88. Which of the following services is not prohibited for auditor of company
A. Internal Audit
B. Tax Audit
C. Book-keeping
D. Actuarial Service
Ans: B

89. Which of the following is prohibited service for auditor of company

A. Tax Audit
B. Income Tax Representative
C. Tax Consultant
D. None of these
Ans: D

90. In case of resignation by auditor, ADT-3 shall be filed by auditor

within……days of resignation
A. 7
B. 10
C. 15
D. 30
Ans: D

91. Auditor’s right to access to books of account and vouchers of company

extends to all the books
A. Kept at registered office

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B. Kept at any other place
C. Kept at registered office or at any other place
D. He is not entitled to such a right
Ans: C

92. Reporting on fraud is made by auditor to Audit committee/BOD

A. Within 20 days of his knowledge of fraud
B. Within 15 days of his knowledge of fraud
C. Within 45 days of his knowledge of fraud
D. Within 2 days of his knowledge of fraud
Ans: D

93. The auditor should comply with Auditing Standards. It is……….. of the
auditor
A. Right
B. Duty
C. Moral responsibility
D. None of these
Ans: B

Ans: C

94. …………. Audit ensures that transactions entered into by the client are not
against public interest
A. Propriety audit
B. Efficiency audit
C. Social audit
D. None of the above
Ans:

95. ……………… Audit focusses on testing and surprise checks are also
involved
A. 100% of transaction
B. Partial testing
C. Both a & b
D. None of the above
Ans:

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96. Of the company appoints the Cost Accountants or firm of cost accountants
and his remuneration will be fixed by in the prescribed manner.
A. Members.; Board of directors
B. Board of directors ; Members.
C. Board of directors ; nomination and remuneration committee.
D. Members; nomination and remuneration committee
Ans: B

97. Notice of appointment of cost auditor shall be filed with REGISTRAR in

……with fees, within ……of meeting.
A. FORM CRA 2; 15 DAYS.
B. FORM CRA 1; 15 DAYS.
C. FORM CRA 2; 30 DAYS.
D. FORM CRA 1; 30 DAYS.
Ans:

98. Appointment of cost auditor shall be filed with REGISTRAR in ……with

fees ,within ……of meeting
A. 90 days
B. 120 days
C. 60 days
D. 180 days
Ans: C

99. The BOD shall submit full information & explanation to every reservation or
qualification in cost audit report within …………..in……………………
A. 30 Days ; Form CRA 3
B. 60 Days ; Form CRA 3
C. 60 Days ; Form CRA 4
D. 30 Days ; Form CRA 4
Ans: D

100. Cost auditor is required to submit his report to:-

A. Members.
B. Central government.
C. BOD.
D. ROC.

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Ans: C

101. Cost audit will not be applicable to those companies

A. Whose revenue from exports in Forex exceeds 75% of total revenue
B. Which is operating from SEZ
C. Which is engaged in generation of electricity for captive consumption
through captive generation plant.
D. All of these
Ans: D

102. Cost auditor of company shall be appointed by BoD within………..days from

commencement of FY
A. 180
B. 60
C. 120
D. 30
Ans: D

103. Intimation of appointment of cost auditor is filed by Co to CG in the form

A. ADT-1
B. CRA-4
C. CRA-2
D. CRA-3
Ans: C

104. Any casual vacancy in the office of cost auditor of company is filed by
A. BOD within 1 month
B. BOD within 30 days
C. CG within 30 days
D. CAG within 60 days
Ans: B

105. Cost Auditor performs cost audit in accordance with

A. Standards on Auditing
B. Basic principles of cost audit
C. Cost Audit Standards
D. Standards on Related Services

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Ans: C

106. Cost audit report shall be submitted in Form

A. CRA-1
B. CRA-4
C. CRA-3
D. CRA-2
Ans: B

107. Cost audit report shall be submitted by Cost auditor to BOD within……….
days from closure of FY
A. 90
B. 120
C. 150
D. 180
Ans: D

108. Independence comprises

A. Independence by mind
B. Independence in appearance
C. Both (a) and (b)
D. None of these
Ans: C

109. Which of the following is not code of ethics

A. Objectivity
B. Integrity
C. Communication skills
D. Professional competence and due care.
Ans: C

110. As per SA-200 “Overall Objectives of the Independent Auditor”, in

conducting an audit of financial statements, the overall objectives of the
auditor are:
A. To obtain reasonable assurance
B. To report on the financial statements
C. Both (a)and (b) above

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D. to obtain absolute assurance.
Ans: C

111. The auditor’s _________ safeguards the auditor’s ability to form an audit
opinion without being affected by any influences.
A. Objectivity
B. independence
C. Confidentiality
D. Integrity
Ans: B

112. Planning is ______ process of an audit that often begins shortly after (or in
connection with) the completion of the previous audit and continues until the
completion of the current audit engagement:
A. continuous
B. discrete
C. neither continuous nor discreet
D. strategic
Ans: A

113. Which of the following is more scientific:

A. Statistical
B. Non- statistical
C. both (a) and (b)
D. none of the above
Ans: A

114. Auditor’s judgment as to sufficiency may be affected by the factors such as:
A. Materiality
B. Risk of material misstatement
C. Size and characteristics of the population.
D. All of the above
Ans: D
115. unlisted public limited company is required to appoint an internal auditor
according to the provisions of Companies Act, 2013 only when during the
preceding financial year, the paid up share capital of the company would be:
A. Less than or equal to `50 crore.

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B. More than or equal to ` 50 crore.
C. Less than or equal to ` 100 crore.
D. More than or equal to ` 100 crore.
Ans: B

116. Bright and Smart Private Limited will be required, according to the provisions
of Companies Act, 2013 to appoint an internal auditor only if the turnover
during the preceding financial year would be:
A. Less than or equal to ` 200 crore.
B. More than or equal to ` 200 crore.
C. Less than or equal to ` 150 crore.
D. More than or equal to ` 150 crore.
Ans: B

117. The susceptibility of an assertion about a class of transaction, account balance

or disclosure to a misstatement that could be material, either individually or
when aggregated with other misstatements, before consideration of any
related controls is
A. Control Risk
B. Inherent Risk
C. Detection Risk
D. Audit Risk
Ans: B

118. Substantive Analytical Procedures are generally more applicable to:

A. Large volumes of transactions.
B. Transactions predictable over time.
C. Both a and b
D. None of a and b
Ans: C

119. Which of the following is not an analytical procedure?

A. Tracing of purchases recurred in the purchase book to purchase invoices.
B. Comparing aggregate wages paid to number of employees
C. Comparing the actual costs with standard costs
D. All of them are analytical procedures

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Ans: A

120. Mr. A is acting as a Statutory Auditor of Ram Ltd, for last 5 years. Ram Ltd is
unlisted and has no public borrowings. Rotation of auditor will be required for
Ram Ltd, if
A. Its paid up share capital is more than ` 10 crore
B. Its paid up share capital is equal to or more than ` 10 crore
C. Its paid up share capital is less than ` 50 crore
D. Its paid up share capital is equal to or more than ` 50 crore
Ans: B

121. Direct confirmation procedures are performed during audit of accounts

receivable balances to address the following balance sheet assertion:
A. Rights and obligations
B. Existence
C. Valuation
D. Completeness
Ans:

122. Which of the following is not a type of modified opinion:

A. negative opinion.
B. qualified opinion
C. adverse opinion
D. disclaimer of opinion
Ans: A

123. The auditor shall express _______opinion when the auditor, having obtained
sufficient appropriate audit evidence, concludes that misstatements,
individually or in the aggregate, are both material and pervasive to the
financial statements.
A. Adverse
B. Qualified
C. Disclaimer
D. unmodified opinion with key audit matter paragraph.
Ans: A

124. Section 139(1) of the Companies Act, 2013 provides that every company
shall, at the first annual general meeting appoint an individual or a firm as an

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auditor who shall hold office from the conclusion of that meeting
A. till the conclusion of its sixth annual general meeting and thereafter till the
conclusion of every sixth meeting.
B. till the conclusion of its sixth annual general meeting only.
C. till the conclusion of its sixth annual general meeting and thereafter till the
conclusion of every fifth meeting.
D. till the conclusion of its fifth annual general meeting and thereafter till the
conclusion of every fifth meeting.
Ans: A

125. ……………. Audit involves examination of techniques of propriety audit,

regularity investigative
A. Social audit
B. Forensic audit
C. Government audit
D. All of the above
Ans: B

126. Social audit is a process of determining whether the reported expenditure

reflects the actual money spent towards
A. Social responsibility
B. Environmental Responsibility
C. Economic Responsibility
D. All of the above
Ans: D

127. According to the Central Co-operatives Societies Act, of the profits of a

co-operative society should be transferred to a Reserve Fund before
distribution of dividend or payment of bonus to its members.
A. 20%
B. 25%
C. 30%
D. 35%
Ans: B

128. Internal audit involve

A. Examination of financial records

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B. Focusing on risk management Areas
C. Reviews whether proper operating standards have been established
D. All of the above
Ans: D
129. Environmental Audit checks
A. Checks whether compliance with various laws relating to pollution are
complied
B. It identifies the environmental impact of its activities and improves its
environmental performance
C. What corrective actions to be taken to control pollution
D. All of the above
Ans: D

130. ………………….. audit provides an appraisal of whether the department is

operating in conformity with prescribed standards and procedure laid down
by management
A. Management audit
B. Internal audit
C. Operational audit
D. All of the above
Ans: B

131. …………… audit is an organizational function that evaluate assets

safeguarding date integrity, system effectiveness and efficiency in computer
based information system
A. Information system audit
B. Efficiency audit
C. Effectiveness Audit
D. All of the above
Ans: A

132. …………….. audit critically examines the financial statement and verifies
each assertion in the financial statement
A. Balance sheet
B. Internal audit
C. Both a & b
D. None of the above
Ans: B

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133. Constraints on the scope of audit of financial statements that impair the
auditors ability to express
A. Unqualified opinion
B. Qualified opinion
C. Disclaimer of opinion
D. Active Opinion
Ans: A

134. ………………….. measures the business events in monetary terms, records

them, and communicates the results through financial statement
A. Accounting
B. Auditing
C. Internal control
D. All of the above
Ans: A

135. Which quality is required to conduct an audit

A. Technical Knowledge
B. Human Qualities
C. Both of the above
D. None of the above
Ans: B

136. ……………. Audit focuses on goals, strategies and risk management

processes
A. Operational audit
B. Internal audit
C. Statutory audit
D. Management audit
Ans: D
137. Operational audit is
A. Process based & business focus
B. Transaction based & financial accounts focus
C. Financial based
D. None of the above
Ans: A

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138. Shareholding is a cooperative society by a member maximum of total No. of
shares of the society or such number of shares which in value exceed
Rs…………….
A. 20%,
B. 25%,
C. 30%,
D. 10%,
Ans: B

139. Subject to byelaws, a cooperative society can accept loans from

A. Members
B. Non- members
C. Both a & b
D. Banks
Ans: C

140. Secretarial Audit is covered under section

A. Section 204
B. Section 148
C. Section 139
D. None of the above
Ans: A

141. Audit certificate is addressed to

A. Shareholders
B. To a particular person
C. Both a & b
D. None
Ans: C

142. Audit certificate guarantees …………… certificate of figures

A. Absolute
B. Reasonable
C. No
D. None of the above
Ans: B

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143. …………….. is a written confirmation of the Information stated therein
A. Audit report
B. Audit certificate
C. Audit Note Book
D. Audit working paper
Ans: B

144. Materiality may be determined

A. Aggregate
B. Individually
C. Both
D. None of the above
Ans: C

145. Surprise check are useful in the following area

A. Verification of cash and Investments
B. Verification of stores and stocks
C. Verification of books and prime entry
D. All of the above.
Ans: D

146. ………….. audit ensures the economical execution of various schemes and
policies
A. Efficiency Audit
B. Economic audit
C. Effectiveness audit
D. Both
Ans: A

147. Any casual vacancy in a govt. company is filled by the CAG of India within
days.
A. 15
B. 30
C. 45
D. 60
Ans: B

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148. The amendments that gave the local self-governance in India the constitutio
nal protection are and .
A. 53 and 54
B. 63 and 64
C. 73 and 74
D. 83 and 84
Ans: C

149. Which of the following is not a content of audit report as per CARO?
A. Inventory
B. Acceptance of deposit
C. Recruitment of employees
D. Repayment of loan
Ans: C

150. No audit firm shall be appointed or reappointed as auditor for more than two
terms of consecutive years.
A. 3
B. 5
C. 7
D. 10
Ans: B

151. Each qualified chartered accountant not in full time employment can be the
auditor of at most companies.
A. 10
B. 15
C. 20
D. 30
Ans: C

152. Which of the following is not a content of audit report?

A. Signature of the auditor
B. Date of the report
C. Attachment of audit evidences
D. Auditor’s address
Ans: C

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153. An auditor shall submit a unmodified report when .

A. The financial statements exhibit true and fair view
B. The financial statements are partially correct
C. The financial statements are in complete
D. The financial statements are unavailable
Ans: A

154. Cost Audit is covered under

A. Section 204
B. Section 148
C. Section 139
D. None of the above
Ans: B

155. An Audit Committee should have a minimum of number of directors.

A. 4
B. 3
C. 5
D. 6
Ans: B

156. Which of the following is not a part of rural self-governance system in India?
A. Gram Panchayat
B. Gram Parishad
C. Panchayat Samiti
D. Zilla Parishad
Ans: B
157. A cost auditor submits his report along with reservations and observations in
Form No.
A. CRA1
B. CRA2
C. CRA3
D. CRA4
Ans: C

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158. SA 210 Stands for
A. audit planning
B. audit working paper
C. audit documentation
D. agreeing the terms of audit engagement
Ans: D

159. Audit is derived from French word which mean

A. Audiable
B. auditing
C. Audire
D. checking
Ans: C

160. Which of the following is not a part of urban self-governance system in India?
A. Municipal Corporation
B. Town Panchayat
C. Municipality
D. Municipal Society
Ans: D

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