A. Equity shares or debentures of the company
B. Equity shares carrying voting of the company
C. Shares carrying voting rights of the company
D. Security carrying voting rights of the company
✅ The correct answer is option D.
SSC
1382. 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.
1383. Which of the following statement is not true?
A. A partnership firm can be appointed as a statutory auditor of limited company
B. Appointment can be made in the name of the firm
C. Majority of the partners should be practicing in India
D. All partners should be chartered accountants
✅ The correct answer is option C.
1384. 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.
1385. Which of the following sections deal with qualifications of the auditor ?
A. Section 226 (1) and section 226(2)
B. Section 224 (1) and section 224 (2)
C. Section 226 (3) and section 226(4)
D. Section 224(3) & Sec.224
✅ The correct answer is option A.
1386. 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.
1387. Who is responsible for the appointment of statutory auditor of a limited company?
A. Directors of the company
B. Members of the company
C. The Central Government
D. All of the above
✅ The correct answer is option B.
1388. Which of the following factors would least likely affect the quantity and content of an auditor’s working papers
A. The assessed level of control risk
B. The possibility of peer review
C. The nature of auditor’s report
D. The content of management representation letter
✅ The correct answer is option D.
1389. The nature, timing and extent of substantive procedures is related to assessed level of control risk
A. Randomly
B. Disproportionately
C. Directly
D. Inversely
✅ The correct answer is option C.
1390. For what minimum period should audit working papers be retained by audit firm?
A. For the time period the entity remains a client of the audit firm.
B. For a period of ten years
C. For a period auditor opines them to be useful in servicing the client
D. For the period the audit firm is in existence.
✅ The correct answer is option C.