Auditing - Practice Test | ExamPrepSheets

[#361] Which of the following statements is not correct about materiality?

(A) Materiality is a relative concept

(B) Materiality judgments involve both quantitative and qualitative judgments

(C) Auditor's consideration of materiality is influenced by the auditor's perception of the needs of an informed decision maker who will rely on the financial statements

(D) At the planning state, the auditor considers materiality at the financial statement level only

Correct Answer

(D) At the planning state, the auditor considers materiality at the financial statement level only

[#362] An auditor conducts a surprise check on the pay day, i.e., the day wages and salaries are paid. The primary purpose of this audit procedure is to

(A) Ensure there are no ghost workers

(B) Ensure the casual workers employed are authorized by the supervisor

(C) Test procedures for distributing paycheques

(D) Obtain an understanding of the internal control system

Correct Answer

(C) Test procedures for distributing paycheques

[#363] The management of a company, to which AS3 is not applicable, does not include statement of cash flows in its annual report. The auditor should express:

(A) Unqualified opinion

(B) Qualified opinion

(C) Adverse opinion

(D) Any of these depending upon materiality and pervasiveness and adequacy of disclosure

Correct Answer

(A) Unqualified opinion

[#364] Who is qualified to be a company auditor?

(A) Employee of the company

(B) Body corporate

(C) Person indebted to the company for an amount exceeding Rs. 1,000

(D) Chartered accountant

Correct Answer

(D) Chartered accountant

[#365] Statement I: Safety audit is a risk management tools. Statement II: Management audit is a part of traditional auditing.

(A) Statement I is correct

(B) Statement II is correct

(C) Both statements are correct

(D) Both statements are incorrect

Correct Answer

(A) Statement I is correct

Auditing - Study Mode

[#361] Which of the following statements is not correct about materiality?

Correct Answer

[#362] An auditor conducts a surprise check on the pay day, i.e., the day wages and salaries are paid. The primary purpose of this audit procedure is to

Correct Answer

[#363] The management of a company, to which AS3 is not applicable, does not include statement of cash flows in its annual report. The auditor should express:

Correct Answer

[#364] Who is qualified to be a company auditor?

Correct Answer

[#365] Statement I: Safety audit is a risk management tools. Statement II: Management audit is a part of traditional auditing.

Correct Answer