251. Stock should be valued at
A. Cost
B. Market price
C. Cost or Market price whichever is lower.
D. Cost less depreciation.
✅ The correct answer is option C.
Auditing
252. The scope of internal audit is decided by the :
A. Shareholders
B. Management
C. Government
D. Law
✅ The correct answer is option B.
253. Internal audit is undertaken
A. By independent auditor
B. Statutorily appointed auditor
C. By a person appointed by the management
D. By a government auditor
✅ The correct answer is option C.
254. Which of the following is not a limitation of audit as per AAS4?
A. Objectivity of auditor’s judgment
B. Selective testing
C. Persuasiveness of evidence
D. Limitations of internal control system.
✅ The correct answer is option A.
255. As per AAS4, if auditor detects an error then –
A. He should inform the management.
B. He should communicate it to the management if it is material
C. The auditor should ensure financial statements are adjusted for detected errors.
D. Both (b) and (c)
✅ The correct answer is option D.
256. Which of the following statements is not true?
A. Management fraud is more difficult to detect than employee fraud
B. Internal control system reduces the possibility of occurrence of employee fraud and management fraud
C. The auditor’s responsibility for detection and prevention of errors and frauds is similar.
D. All statements are correct.
✅ The correct answer is option B.
257. Audit of banks is an example of –
A. Statutory audit
B. Balance sheet audit
C. Concurrent audit
D. All of the above
✅ The correct answer is option D.
258. In India, balance sheet audit is synonymous to
A. Annual audit
B. Continuous audit
C. Detailed audit
D. Statutory audit
✅ The correct answer is option A.
259. Concurrent audit is a part of
A. Internal check system
B. Continuous audit
C. Internal audit system
D. None
✅ The correct answer is option C.