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Q11. The process of auditing begins where __________ ends.
1. Accounting
2. Inventory valuation
3. Selling
4. Purchase and expenditure
Answer: 1. Accounting
Q12. When the work of one clerk is automatically checked by another, it is known as ___________.
1. Internal audit
2. Internal check
3. Internal control
4. None of the above
Answer: 2. Internal check
Q13. The owners of a corporate entity are referred to as __________________.
1. Debtors
2. Shareholders
3. Debenture holders
4. None of the above
Answer: 2. Shareholders
Q14. The main objective of investigation is to _______________.
1. To prevent fraud and errors
2. To discover fraud and errors
3. To verify financials
4. All of the above
Answer: 4. All of the above
Q15. The system of internal control and internal check are _______________.
1. One and the same
2. Different from each other
3. Internal controls include an internal check system
4. None of the above
Answer: 3. Internal controls include an internal check system
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Q16. Which of the following is correct? An Auditor is a ___________.
1. Bloodhound
2. Watchman
3. Watchdog
4. Foolish dog
Answer: 3. Watchdog
Q17. A special audit is usually needed for a/an ____________.
1. Trading company
2. Manufacturing company
3. Processing company
4. Inefficient company
Answer: 4. Inefficient company
Q18. What is expected of a company’s auditor? He is expected to give _______________.
1. A factual position of the client’s accounts
2. A critical review of the client’s accounts
3. An expert opinion on the books of account
4. Financial assistance to the client
Answer: 3. An expert opinion on the books of account
Q19. In a joint stock company, auditors are appointed by ______________.
1. The management
2. The Board of Directors
3. Election at the annual general meeting
4. None of the above
Answer: 3. Election at the annual general meeting
Q20. The auditor of a company can be removed by ________________.
1. The management
2. Passing a resolution in the general meeting
3. Passing a resolution by the Board of Directors
4. None of the above
Answer: 2. Passing a resolution in the general meeting
Q21. If a vacancy is caused by the resignation of the auditor, it is to be filled by ________________.
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1. The Central Government
2. The Board of Directors subject to approval in a general meeting
3. Convening a general meeting
4. The Managing Director
Answer: 2. The Board of Directors subject to approval in a general meeting
Q22. Which of the following best describes the term “Auditing in-depth”?
1. Conducting an audit of each and every item
2. Conducting an intensive audit of each and every item
3. Conducting an audit of a few selected items
4. Conducting an intensive audit of a few selected items
Answer: 4. Conducting an intensive audit of a few selected items
Q23. A concurrent audit is considered to be a part of ___________________.
1. Internal check system
2. Internal audit system
3. Final audit
4. Continuous audit
Answer: 2. Internal audit system
Q24. The term “Auditing in-depth” is synonymous with which of the following terms?
1. Completed audit
2. Final audit
3. Complete audit
4. Detailed audit
Answer: 4. Detailed audit
Q25. A balance sheet audit involves _________________.
1. Verification of assets
2. Verification of liabilities
3. Verification of income and expense accounts wherever appropriate
4. All of the above
Answer: 4. All of the above
Q26. In relation to continuous audit, which of the following statements are incorrect?
1. It is conducted at regular intervals.
2. It can be expensive.
