MCQOPTIONS
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MCQOPTIONS
This section includes 999 Mcqs, each offering curated multiple-choice questions to sharpen your Engineering Mechanics knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
If the monthly accounts of some Treasuries or Public Works Divisions are excluded from the Accounts of a State Government, it affects this objective |
| A. | Existence |
| B. | Disclosure |
| C. | Completeness |
| D. | Occurrence |
| Answer» D. Occurrence | |
| 2. |
Transaction audit essentially seeks to address the following issues of risks to:i Regularityii Performanceiii Proprietyiv Financial Control |
| A. | All of the above |
| B. | (i), (ii) & (iii) only |
| C. | (i), (iii) & (iv) only |
| D. | (i), (ii) & (iv) only |
| Answer» D. (i), (ii) & (iv) only | |
| 3. |
In the context of Government Accounts in India, the key feeder systems aslo include State Bank of India or any other public sector bank transacting Government Business on behalf of Reserve Bank of India |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» B. FALSE | |
| 4. |
If the financial statements properly present receipts and payments or give a true and fair viewand have been prepared in accordance with relevant accounting requirements, the auditor |
| A. | does not give any opinion |
| B. | gives a qualified opinion |
| C. | gives an unqualifie |
| D. | opinion |
| Answer» D. opinion | |
| 5. |
The extent of audit procedures and the the level of assurance required are |
| A. | Directly related |
| B. | Indirectly related |
| C. | none |
| D. | all |
| Answer» B. Indirectly related | |
| 6. |
This is a technique that creates an equation to reveal how one variable is related to one or more other variables. |
| A. | Comparison across components |
| B. | Predictive Analysis |
| C. | Regression analysis |
| D. | Economic analysis |
| Answer» D. Economic analysis | |
| 7. |
The primary responsibility for safeguarding the audited entity’s funds and assets and to preventfrauds or errors lies with its |
| A. | employees |
| B. | internal auditor |
| C. | management |
| D. | statutory auditor |
| Answer» D. statutory auditor | |
| 8. |
When you are finding out the inventory-turnover ratio, you are doing |
| A. | Comparison across components |
| B. | Comparison involving a single component |
| C. | Regression analysis |
| D. | Economic analysis |
| Answer» B. Comparison involving a single component | |
| 9. |
The International Standards of Auditing (ISAs) have been developed by |
| A. | The International Federation of Accountants |
| B. | The International Auditing Practices Committee |
| C. | The Internationa Auditing & Accounting Standards Board |
| D. | The INTOSAI |
| Answer» B. The International Auditing Practices Committee | |
| 10. |
Misclassification of revenue expenditure resulting in a saving in a grant when in fact there has been an excess is an example of. |
| A. | Materiality by value |
| B. | Materiality by context |
| C. | Materiality by nature |
| D. | all |
| Answer» C. Materiality by nature | |
| 11. |
If some item of revenue expenditure is misclassified as capital expenditure, it can be said that this objective is not met |
| A. | Existence |
| B. | Disclosure |
| C. | Completeness |
| D. | Occurrence |
| Answer» C. Completeness | |
| 12. |
A financial audit is intended to give |
| A. | Qualified Assurance |
| B. | Absolute Assurance |
| C. | Positive Assurance |
| D. | None of these |
| Answer» E. | |
| 13. |
The following types of financial statements are audited in respect of Union, State and UT Governmentsi Finance Accountsii Appropriation Accountsiii Balance Sheetiv Statements of Expenditure |
| A. | (i) & (ii) only |
| B. | (i) to (iii) only |
| C. | (i) & (iii) only |
| D. | All of the above |
| Answer» B. (i) to (iii) only | |
| 14. |
If the desired overall assurance from audit is 95%, the inherent risk is 40% and the control risk is 50%, what would be the desired assurance from substantive tests |
| A. | 90% |
| B. | 95% |
| C. | 99% |
| D. | 75% |
| Answer» E. | |
| 15. |
The three components of Audit Risk as per the risk model are |
| A. | Inherent Risk, Control Risk, Mitigation Risk |
| B. | Inherent Risk, Control Risk, Litigation Risk |
| C. | Inherent Risk, Control Risk, Detection Risk |
| D. | None of these |
| Answer» D. None of these | |
| 16. |
The acid test for good documentation is |
| A. | when it is appreciated by the higher authorities |
| B. | when it results in good quality audit observations |
| C. | when it results in giving a clean chit to the entity observed |
| D. | that an experienced auditor with no previous connection with the audit should be able, without difficulty, to ascertain the evidence gathered and understand and support the conclusions reached. |
| Answer» E. | |
| 17. |
These are performed if the audit team has not identified risks that could lead to material misstatement and no reliance is planned to be placed on controls. |
| A. | Focused Subtantive Procedures |
| B. | Standard Substantive Procedures |
| C. | Minimum Substantive Procedures |
| D. | all |
| Answer» C. Minimum Substantive Procedures | |
| 18. |
what are the audit procedures commonly used to obtain audit assurance? |
| A. | Analytical Procedures |
| B. | Systems Based Audit |
| C. | Direct Substantive Testing |
| D. | All of the above |
| Answer» E. | |
| 19. |
Extrapolation of sampling results to the population is possible in the case of Judgmental Sampling. |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» C. none | |
| 20. |
This financial audit objective directly tests for potential overstatement of assets and liabilities |
| A. | Existence |
| B. | Ownership |
| C. | Completeness |
| D. | None of these |
| Answer» B. Ownership | |
| 21. |
Which method of sampling is expected to produce representative samples? |
| A. | Block Selection |
| B. | Judgmental Sampling |
| C. | Random Sampling |
| D. | Convenient Sampling |
| Answer» D. Convenient Sampling | |
| 22. |
Financial (attest) audit includes an evaluation of Compliance with applicable statutes and regulations |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» B. FALSE | |
| 23. |
The audit of financial statements of Government Companies conducted by the C&AG is called |
| A. | Financial Audit |
| B. | Supplementary Audit |
| C. | Attest Audit |
| D. | Compliance Audit |
| Answer» C. Attest Audit | |
| 24. |
For accounts prepared on cash basis, in respect of gross receipts/expenditure, materiality percentage would be |
| A. | For very sensitive accounts - 1 %, sensitive accounts - 1% to 2% and non sensitive accounts - 5% |
| B. | For very sensitive accounts - 1/2 %, sensitive accounts - 1/2% to 2% and non sensitive accounts - 2% |
| C. | For very sensitive accounts - 2 %, sensitive accounts - 5% and non sensitive accounts - 8% |
| D. | none of these |
| Answer» C. For very sensitive accounts - 2 %, sensitive accounts - 5% and non sensitive accounts - 8% | |
| 25. |
Sampling interval is calculated in this kind of sampling |
| A. | Simple Random Sampling |
| B. | Systematic Sampling |
| C. | Stratified Sampling |
| D. | All of the above |
| Answer» C. Stratified Sampling | |
| 26. |
The document that presents an analysis of the main audit areas and a summary of the keyplanning decisions is called |
| A. | Audit memorandun |
| B. | Audit execution memorandum |
| C. | Audit Note |
| D. | Audit Planning memorandum |
| Answer» E. | |
| 27. |
Which of these broad characteristics of audit working papers applies particularly to photocpies |
| A. | Clarity and conciseness |
| B. | Legibility and neatness |
| C. | Completeness |
| D. | Accuracy |
| Answer» C. Completeness | |
| 28. |
A material but not fundamental uncertainty would lead to |
| A. | disclaimer |
| B. | qualified opinion |
| C. | unqualified opinion |
| D. | adverse opinion |
| Answer» C. unqualified opinion | |
| 29. |
Which of the following is not a part of analytical procedures? |
| A. | System Analysis |
| B. | Economic Analysis |
| C. | Regression Analysis |
| D. | Predictive Analysis |
| Answer» C. Regression Analysis | |
| 30. |
Which of these standards regulate the condut of the auditor |
| A. | General Standards |
| B. | Field Audit Standards |
| C. | Field Standards |
| D. | Reporting Standards |
| Answer» B. Field Audit Standards | |
| 31. |
The process for identifying material risk factors has ____ key stages |
| A. | Four |
| B. | Five |
| C. | Six |
| D. | Seven |
| Answer» D. Seven | |
| 32. |
The materiality thresholds depend on the ____ of accounts and their _____. |
| A. | Basis, Sensitivity |
| B. | Sensitivity, relativity |
| C. | Basis, accountablity |
| D. | Basis, Value |
| Answer» B. Sensitivity, relativity | |
| 33. |
Which of these is the correct set of general financial audit objectives for income & expenditure account |
| A. | Completeness, Occurrence, Measurement, Disclosure, Regularity |
| B. | Completeness, Occurrence, Measurement, Disclosure, Existence |
| C. | Completeness, Occurrence, Existence, Disclosure, Regularity |
| D. | Completeness, Ownership, Measurement, Disclosure, Regularity |
| Answer» B. Completeness, Occurrence, Measurement, Disclosure, Existence | |
| 34. |
AMLE in the context of likely errors is used in this stage of audit |
| A. | Reporting |
| B. | Evaluation of results |
| C. | Planning |
| D. | Field Audit |
| Answer» D. Field Audit | |
| 35. |
Which of the audit procedures is a form of inductive reasoning where the reasonableness of the aggregate results is inferred from the evidence of reliability of the individual details that are tested? |
| A. | Analytical Procedures |
| B. | Systems Based Audit |
| C. | Direct Substantive Testing |
| D. | All of the above |
| Answer» D. All of the above | |
| 36. |
The audit working papers contain |
| A. | the details of the audit procedures undertaken |
| B. | conclusions drawn and the implications for the audit opinion |
| C. | the record of the reasoning on all significant matters where the members of the audit teams have exercised judgment |
| D. | all of the above |
| Answer» E. | |
| 37. |
Risk assessment is primarily a part of which of these stages in the audit process? |
| A. | Planning |
| B. | Excecution |
| C. | Reporting |
| D. | Follow up |
| Answer» B. Excecution | |
| 38. |
The point where the total value of errors in an account becomes unacceptable to audit is called |
| A. | Unacceptable level |
| B. | Materiality level |
| C. | Qualifiable Level |
| D. | None of these |
| Answer» C. Qualifiable Level | |
| 39. |
Planning materiality may be taken at a lower figure than reporting materiality. |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» B. FALSE | |
| 40. |
Financial Audit of Government Companies is conducted by |
| A. | Chartered Accountants appointed by the companies |
| B. | Chartered Accountants appointed by Ministry of Company Affairs |
| C. | Chartered Accountants appointed by C&AG |
| D. | C&AG |
| Answer» D. C&AG | |
| 41. |
COBIT is |
| A. | a data extraction tool |
| B. | an IT Audit framework |
| C. | an audit documentation tool |
| D. | none of these |
| Answer» C. an audit documentation tool | |
| 42. |
The formula for calculating precision is |
| A. | (Materiality - Range of error possible) x AMLE |
| B. | (Materiality - AMLE) x Range of error possible |
| C. | (AMLE - Range of error possible) x Materiality |
| D. | None of these |
| Answer» C. (AMLE - Range of error possible) x Materiality | |
| 43. |
Transaction audit is linked to a specific assurance on an individual set of financial Statements in a particular year |
| A. | TRUE |
| B. | FALSE |
| C. | none |
| D. | all |
| Answer» C. none | |
| 44. |
The legal right to sue and recover an account receivable is the test of |
| A. | Existence |
| B. | Ownership |
| C. | Completeness |
| D. | None of these |
| Answer» C. Completeness | |
| 45. |
Materiality is classified by |
| A. | Context |
| B. | Nature |
| C. | Value |
| D. | All of these |
| Answer» E. | |
| 46. |
The Primary objective of a financial audit is to |
| A. | Examine the accounts and records |
| B. | Srutinize financial statements |
| C. | Point out overstatements and understatements of account balances |
| D. | Express an opinion on the financial statements |
| Answer» E. | |
| 47. |
The risks identified from top down review of entities and which may affect a number ofdifferent account areas are called |
| A. | Entity Risks |
| B. | Accounting Risks |
| C. | Inherent Risks |
| D. | Account Area Risks |
| Answer» B. Accounting Risks | |
| 48. |
Working papers should be restricted to matters, which are important, pertinent and useful forthe purpose. Which is the characteristic that we are talking about? |
| A. | Clarity and conciseness |
| B. | Legibility and neatness |
| C. | Relevance |
| D. | Accuracy |
| Answer» D. Accuracy | |
| 49. |
This method of sampling is also called probability proportionate to size (PPS) sampling |
| A. | Block Selection |
| B. | Random Sampling |
| C. | Stratified Sampling |
| D. | Monetary Unit Sampling |
| Answer» E. | |
| 50. |
These are performed if the audit team identifies a risk that could lead to potential material misstatement and where no reliance can be placed on mitigating controls to address the risk |
| A. | Focused Subtantive Procedures |
| B. | Standard Substantive Procedures |
| C. | Minimum Substantive Procedures |
| D. | all |
| Answer» B. Standard Substantive Procedures | |