193. Purchase returns should be vouched with the help of
A. Bought notes
B. Credit notes
C. Goods inward book
D. Cash book
✅ The correct answer is option B.
194. Payment for building purchased should be vouched with the help of
A. Title Deed
B. Correspondence with the brokers
C. Building Account
D. Cash book
✅ The correct answer is option A.
196. Payment for wage should be vouched with the help of
A. Piece Work Statement.
B. Wage sheets
C. Minutes book
D. Bank pass book.
✅ The correct answer is option B.
198. Knowledge of the entity’s business does not help the auditor to
A. Reduce inherent risk
B. Identify problem areas
C. Evaluate reasonableness of estimates
D. Evaluate appropriates of GAAP.
✅ The correct answer is option A.
200. The current file of the auditor’s working papers, generally, should include
A. A flowchart of the internal controls
B. Organisation charts
C. A copy of financial statements
D. Copies of bond and debentures
✅ The correct answer is option C.
202. Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor?
A. The working papers may be obtained by third parties when they appear to be relevant to issues raised in litigation
B. The safe custody of working papers is the responsibility of client, if kept at his premises
C. The working papers must be retained by an audit firm for a period of 10 years
D. Successor auditors may have access to working papers of the predecessor auditors. The approval of client is not required.
✅ The correct answer is option A.
178. The auditor has a right to
A. Obtain information and explanation
B. Obtain information and explanation from the employees and officers
C. Obtain information and explanation necessary for the purpose of audit
D. Both (b) and (c)
✅ The correct answer is option D.
180. Who out of the following cannot be appointed as a statutory auditor of the company?
A. Erstwhile director
B. Internal auditor
C. Relative of a director
D. Only (b) and (c)
✅ The correct answer is option B.
181. The retiring auditor does not have a right to___
A. make written representations
B. get his representations circulated.
C. be heard at the meeting
D. speak as a member of the company
✅ The correct answer is option D.
182. Which of the following statements is not correct regarding removal of first auditor before expiry of the term?
A. He is removed at a general meeting
B. The shareholders are authorized to do so
C. The approval of the Central Government is required for such removal
D. The provisions for such removal are contained in section 224(7)
✅ The correct answer is option C.