A. Establish physical barriers over investment securities
B. Maintain files of authorized signatures
C. Segregate investment approval from accounting and from custody of securities
D. All of the above
✅ The correct answer is option D.
Auditing MCQs
When auditing prepaid insurance, an auditor discovers that the insurance policy bond on building is not available for inspection. This may indicate__
A. No insurance has been undertaken for building
B. Lien on building
C. Insurance premium has not been paid
D. Insurance premium paid but not recorded
✅ The correct answer is option B.
While verifying intangible assets, an auditor would recomputed amortization charges and determines whether amortization period is reasonable. The auditor tries to establish ….by doing it
A. Valuation
B. Existence
C. Disclosure
D. Possession
✅ The correct answer is option A.
An auditor is held liable under C.A Act 1949 for
A. negligence
B. misfeasance
C. Professional misconduct
D. breach of contract.
✅ The correct answer is option C.
The performance of tests of control is documented in
A. Audit programme
B. Flow charts
C. Working papers
D. Any of the above
✅ The correct answer is option C.
An auditor is held criminally liable for
A. Loss to his client
B. Neglect of his duty
C. Offence against statutory provisions
D. Frauds
✅ The correct answer is option C.
A flow chart, made by the auditor, of an entity’s internal control system is a graphic representation that depicts the auditor’s.
A. Understanding of the system
B. Understanding of fraud risk factors
C. Documentation of assessment of control risk
D. Both (a) and (c)
✅ The correct answer is option A.
Civil liability of an auditor implies liability for
A. misappropriation of cash
B. misappropriation of goods
C. fraud
D. misfeasance
✅ The correct answer is option D.
An auditor assesses control risk because it
A. Affects the audit risk
B. Affects the level of detection risk that auditor may accept
C. Helps him to fix materiality level for each financial assertion
D. Is directly related to inherent risk
✅ The correct answer is option B.
………… means “proving the truth or confirmation”
A. Vouching
B. Verification
C. Inspection
D. Auditing
✅ The correct answer is option B.