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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.
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3. It might be carried out on a daily basis.

4. It is required when the company has a good internal control system in place.

Answer: 4. It is required when the company has a good internal control system in place.

Q27. Which of the following is not a component of EPA?

1. Efficiency audit
2. Effectiveness audit
3. Economy audit
4. Expenditure audit

Answer: 4. Expenditure audit

Q28. At the ___________ stage, the auditor sets the materiality levels for audit purposes.

1. Completion stage
2. Planning stage
3. Final stage
4. None of the above

Answer: 2. Planning stage

Q29. While preparing for an audit plan, the auditor is needed to assess the effectiveness of accounting
systems and _______________.

1. Administrative controls
2. Internal controls
3. Compliance procedures
4. None of the above

Answer: 2. Internal controls

Q30. An audit programme is a set of __________ that are to be followed for the proper execution of
an audit. It also sets out the responsibilities of the whole audit team to carry out different tasks.

1. Working papers
2. Instructions
3. Documentation
4. None of the above

Answer: 2. Instructions

Q31. An audit programme is prepared by a senior auditor/audit staff and is documented in the
_____________________, which are the official record of planning and execution of the audit
engagement.
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1. Audit working papers

2. Audit engagement letter
3. Audit report
4. None of the above

Answer: 1. Audit working papers

Q32. Which amongst the following is not an example of corroborative evidence?

1. Confirmations obtained from debtors

2. Minutes of company meetings
3. Worksheet annexing to consolidated financial statements
4. Information obtained by the auditor through observation

Answer: 3. Worksheet annexing to consolidated financial statements

Q33. If the Board of Directors fails to appoint the first auditors of a company, then the shareholders
are required to appoint them at ____________________ by passing a resolution.

1. An annual general meeting

2. An extraordinary general meeting
3. The first annual general meeting
4. A statutory meeting

Answer: 2. An extraordinary general meeting

Q34. Which of the following statements is correct with regard to the reliability of audit evidence:

1. Evidence is more reliable if it is conclusive rather than persuasive.

2. Evidence is more reliable if the internal control system is effective.
3. Evidence is more reliable if it is obtained from outside sources rather than directly from the
client.
4. All of the above

Answer: 4. All of the above

Q35. Which of the following statements is correct with regard to audit working papers?

1. They massively document the level of independence maintained by the auditor.

2. They should not include details about the weaknesses addressed in the internal control
system.
3. They should be treated as a principal document of support for the auditor’s report.
4. They assist the auditors in monitoring the effectiveness of the company’s quality control
measures.

Answer: 3. They should be treated as a principal document of support for the auditor’s report.