Types of Auditing MCQs
Multiple Choice Questions and Answers
In this page, you will get Types of Auditing MCQs which are useful for B. Com and Various Professional Exams Like CA/CMA and CS.
We update this page frequently to add new questions. Chapter wise Auditing MCQs are also included in this post.
Introduction to Auditing
Auditing is a systematic examination of the books and records of a business or other organization, in order to ascertain or verify and report upon the facts regarding its financial operation and the result thereof.
Various Types of Audit
Types of Auditing MCQs
Multiple Choice Questions and Answers
Choose the Correct
Alternative
1. When audit is conducted
at regular intervals or irregular intervals throughout the year, it is called:
a) Statutory Audit.
b) Internal Audit.
c) Interim Audit.
d) Continuous Audit.
Ans: d) Continuous Audit.
2. Audit at the end of the
year is known as:
a) Periodical audit.
b) Standard audit.
c) Efficiency audit.
d) Operational audit.
Ans: a) Periodical audit.
3. An audit, which is
conducted between two annual audits is known as:
a) Periodical audit.
b) Standard audit.
c) Interim audit.
d) Operational audit.
Ans: c) Interim audit.
4. The audit which is not
a statutory requirement, but is conducted at the desire of owners, is known as:
a) Private audit.
b) Balance sheet audit.
c) Operational Audit.
d) Efficiency audit.
Ans: a) Private audit.
[Private audit is conducted mainly by Sole
traders, firms, BOI etc]
5. Audit of government
offices and departments is known as:
a) Tax audit.
b) Periodical audit.
c) Government audit.
d) Efficiency audit.
Ans: c) Government audit.
6. Government audit is
conducted by the department maintained by government of India is known as:
a) Cost and Audit Department.
b) Accounts and Audit Department.
c) Tax and Audit Department.
d) GST and Audit Department.
Ans: b) Accounts and Audit
Department.
7. Accounts and audit
department is headed by:
a) Ministry of finance.
b) Home Minister.
c) Comptroller and Auditor General of India.
d) Prime Minister.
Ans: c) Comptroller and Auditor
General of India.
8. Audit of accounts by
the staff of the business is known as:
a) Statutory Audit.
b) Internal Audit.
c) Interim Audit.
d) Continuous Audit.
Ans: b) Internal Audit.
9. Audit is Compulsory
for:
a) Companies.
b) Trust and Co-operative societies.
c) Companies formed under Special Act of Parliament.
d) All of the above.
Ans: d) All of the above.
10. Statutory audit is
also known as:
a) Compulsory audit.
b) Financial Audit.
c) Financial statements audit.
d) All of the above.
Ans: d) All of the above.
Also Read: Chapterwise Auditing MCQs
👉 Introduction to Auditing MCQS
11. Continuous audit is
suitable for organisations where:
a) Business is very large and large numbers of transactions are
needed to be checked.
b) Audited statements are required immediately after the close of
financial year.
c) Banks
d) All of the above.
Ans: d) All of the above.
12. Early detection of
frauds and errors are possible in which type of audit?
a) Statutory Audit.
b) Internal Audit.
c) Interim Audit.
d) Continuous Audit.
Ans: d) Continuous Audit.
13. Management audit is
also known as:
a) Efficiency audit.
b) Performance audit.
c) Propriety audit.
d) Standard audit.
Ans: a) Efficiency audit.
14. Management audit
involves:
a) Examination of organisational structure.
b) Review the performance of each functions and department of the
management.
c) To help various levels of management in the effective discharge
of their duties.
d) All of the above.
Ans: d) All of the above.
15. Cost audit is
compulsory for:
a) Companies Specified under Table A and B.
b) Companies engaged in production of goods and services (regulated
sector) and annual turnover is more than Rs. 25 crores for a single product.
c) Companies engaged in production of goods and services
(non-regulated sector) and annual turnover is more than Rs. 35 crores for a
single product.
d) Overall turnover of the companies from all its products and
services should be equal to or more than 35 Crore in the immediately preceding
financial year.
e) All of the above.
Ans: e) All of the above.
16. Cost audit is not
applicable to:
a) Companies operating in SEZ.
b) Companies whose revenue from export is more than 75%.
c) Trading entities.
d) All of the above.
Ans: d) All of the above.
17. Audit conducted to
know whether or not books of accounts are maintained as per the Companies Act’
2013:
a) Performance audit.
b) Balance Sheet audit.
c) Secretarial audit.
d) Tax audit.
Ans: c) Secretarial audit.
18. Audit in depth is:
a) Sample Checking.
b) Complete checking.
Ans: a) Sample Checking.
19. Which audit is
conducted to declare interim dividend?
a) Internal audit.
b) Interim audit.
c) Balance sheet audit.
d) Periodical audit.
Ans: b) Interim audit.
20. Audit conducted to
check whether the various activities of the organisation are carried out
efficiently is known as:
a) Internal audit.
b) Interim audit.
c) Balance sheet audit.
d) Performance audit.
Ans: d) Performance audit.
21. External audit is done
by mcq
a) Management
b) Shareholders
c) Independent Auditor
d) Internal Auditor
Ans: c) Independent Auditor
22. Which is not a
continuous audit technique?
a) Internal audit
b) Periodical Audit
c) Cost audit
d) Management Audit
Ans: b) Periodical Audit
23. Propriety
audit refers to
a) Verification of accounts.
b) Examination accounts of propriety
concerns.
c) Enquiry against
justification and necessity of expresses.
d) Audit of Govt. companies.
Ans: c) Enquiry against justification and necessity
of expresses.
24. Errors and frauds already committed can be
discovered under the system of
a) Internal audit,
internal check, internal control
b) External check
c) Statutory audit
d) Interim audit
Ans: a) Internal audit, internal check, internal control
Types of Auditing MCQs
Multiple Choice Questions and Answers
State whether the
following statements are true or false
21. The term “Internal audit” and “Interim audit” convey the same
meaning. False
22. Periodical audit is an external audit undertaken by an independent
auditor. True
23. An internal auditor within the organisation undertakes interim
audit. True
24. Internal audit may be done by independent
auditor. True
25. Scope of duties and responsibilities of internal auditor is
determined by the Companies Act’ 2013. False, Management
26. Compulsory audit is conducted by a practicing chartered
accountant. True
27. Continuous
audit is expensive and not suitable for small organisation. True
28. Continuous audit is suitable for all types of
institutions. False, suitable for small organisations
29. Environmental audit is a process to review the effectiveness of
environmental management. True
30. A successful energy management programme begins with a thorough
energy audit. True
31. The Branch Auditor shall
prepare report on the Accounts of the Branch examined by him and send it to
Audit Committee. False
32. Internal audit is conducted by the
staff of the entity or by an independent professional appointed for that
purpose. True
Types of Auditing MCQs
Multiple Choice Questions and Answers
Fill in the blanks
33. Final audit is
less expensive and suitable particularly for small-scale business concerns.
(Final audit/Continuous audit)
34. Continuous audit is
compulsory for a banking organisation. (Periodical audit/Continuous audit)
35. Internal audit facilitates the
work of final audit. (Hampers/facilitates)
36. Internal audit ascertains
the degree of compliance with predetermined policies, plans and
procedures. (Interim audit/Internal audit)
37. Balance sheet audit means
verification of items appearing in the position statement. (Management/Balance
sheet audit)
38. Periodical Audit is
suitable for small business organisations. (Periodical audit/Continuous audit)
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