Which one of the following statements is correct ? (A) Internal audit and Management audit are the same (B) Internal audit and statutory audit are the same (C) Internal audit is compulsory in all cases (D) Statutory audit of company accounts is compulsory

Which one of the following statements is correct ? (A) Internal audit and Management audit are the same (B) Internal audit and statutory audit are the same (C) Internal audit is compulsory in all cases (D) Statutory audit of company accounts is compulsory  
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Answer: Statutory audit of company accounts is compulsory
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Which one of the following statements is correct ? (A) Audit of an educational institution is compulsory if it is run by a charitable trust (B) A club is treated as a commercial establishment (C) The accounts of a charitable trust can be audited by any person who belongs to accountancy profession (D) Audit of a charitable trust is not compulsory under law

Description : Which one of the following statements is correct ? (A) Audit of an educational institution is compulsory if it is run by a charitable trust (B) A club is treated as a commercial establishment ( ... who belongs to accountancy profession (D) Audit of a charitable trust is not compulsory under law

Last Answer : Answer: Audit of an educational institution is compulsory if it is run by a charitable trust Free

Internal Auditor is appointed by the– (A) Management (B) Shareholders (C) Government (D) Statutory Auditor

Description : Internal Auditor is appointed by the– (A) Management (B) Shareholders (C) Government (D) Statutory Auditor

Last Answer : Answer: Management

Auditing of accounts is compulsory for– (A) Sole proprietary business (B) Partnership firms (C) Joint Stock Companies (D) None of the above

Description : Auditing of accounts is compulsory for– (A) Sole proprietary business (B) Partnership firms (C) Joint Stock Companies (D) None of the above

Last Answer : Answer: Sole proprietory business

Liability of a Company Secretary is– (A) Contractual only (B) Statutory only (C) Civil only (D) Both contractual and statutory

Description : Liability of a Company Secretary is– (A) Contractual only (B) Statutory only (C) Civil only (D) Both contractual and statutory

Last Answer : Answer: Both contractual and statutory

Reserve Bank of India is a– (A) Government Company (B) Departmental Organisation (C) Statutory Corporation (D) None of the above

Description : Reserve Bank of India is a– (A) Government Company (B) Departmental Organisation (C) Statutory Corporation (D) None of the above

Last Answer : Answer: Government Company

A meeting of the shareholders held only once during the life time of the company is known as– (A) Meeting of the Directors (B) Meeting of the Creditors (C) Extraordinary General Meeting (D) Statutory Meeting

Description : A meeting of the shareholders held only once during the life time of the company is known as– (A) Meeting of the Directors (B) Meeting of the Creditors (C) Extraordinary General Meeting (D) Statutory Meeting

Last Answer : Answer: Statutory Meeting

Which of these must hold a Statutory Meeting ? (A) Public Limited Company (B) Private Company (C) Unlimited Company (D) All of these

Description : Which of these must hold a Statutory Meeting ? (A) Public Limited Company (B) Private Company (C) Unlimited Company (D) All of these

Last Answer : Answer: Public Limited Company

The first auditor of a company appointed, holds office– (A) For a period of one year (B) For that period till new auditor is appointed (C) Till the conclusion of first Annual General Meeting (D) Till the holding of statutory meeting of the company

Description : The first auditor of a company appointed, holds office– (A) For a period of one year (B) For that period till new auditor is appointed (C) Till the conclusion of first Annual General Meeting (D) Till the holding of statutory meeting of the company

Last Answer : Answer: Till the conclusion of first Annual General Meeting

A company limited by shares has to call the statutory meeting within a period of not less than one month and not more than six months. This period is counted with reference to which one of the following ? (A) The date of incorporation (B) The date at which the company is entitled to commence business (C) The date of actual receipt of certificate of incorporation (D) The date of actual commencement of business

Description : A company limited by shares has to call the statutory meeting within a period of not less than one month and not more than six months. This period is counted with reference to which one of ... date of actual receipt of certificate of incorporation (D) The date of actual commencement of business

Last Answer : Answer: The date at which the company is entitled to commence business

Appointment of full time Company Secretary is compulsory in all those companies, whose paidup share capital is– (A) Rs. 50 lakhs or more (B) Rs. 1 crore or more (C) Rs. 2 crores or more (D) Rs. 3 crores of more

Description : Appointment of full time Company Secretary is compulsory in all those companies, whose paidup share capital is– (A) Rs. 50 lakhs or more (B) Rs. 1 crore or more (C) Rs. 2 crores or more (D) Rs. 3 crores of more

Last Answer : Answer: Rs. 2 crores or more

Internal activity of a company is going to be performed according to established regulations. This assumption is provided as a right by– (A) Doctrine of Indoor Management (B) Doctrine of Constructive Notice (C) Doctrine of Ultravires (D) Doctrine of Intravires

Description : Internal activity of a company is going to be performed according to established regulations. This assumption is provided as a right by– (A) Doctrine of Indoor Management (B) Doctrine of Constructive Notice (C) Doctrine of Ultravires (D) Doctrine of Intravires

Last Answer : Answer: Doctrine of Indoor Management

Which is a document containing a rules and regulations for the internal management of the company?

Description : Which is a document containing a rules and regulations for the internal management of the company?

Last Answer : The article of association

Internal Audit is provided for in the– (A) Companies Act (B) Partnership Act (C) Both (A) and (B) (D) Neither (A) or (B)

Description : Internal Audit is provided for in the– (A) Companies Act (B) Partnership Act (C) Both (A) and (B) (D) Neither (A) or (B)

Last Answer : Answer: Neither (A) or (B)

What does management audit imply ? (A) Complete audit (B) Detailed audit (C) Efficiency audit (D) Interim audit

Description : What does management audit imply ? (A) Complete audit (B) Detailed audit (C) Efficiency audit (D) Interim audit

Last Answer : Answer: Efficiency audit

Members of a company may apply to which one among the following for relief under the Companies Act, 1956 in cases of oppression ? (A) Central Government (B) High Court of Judicature (C) National Company Law Tribunal (D) National Company Law Appellate Tribunal

Description : Members of a company may apply to which one among the following for relief under the Companies Act, 1956 in cases of oppression ? (A) Central Government (B) High Court of Judicature (C) National Company Law Tribunal (D) National Company Law Appellate Tribunal

Last Answer : Answer: National Company Law Tribunal

The matrix management model is based on a matrix of values between 0 and 9 for two primary variables. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Description : The matrix management model is based on a matrix of values between 0 and 9 for two primary variables. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Last Answer : Answer: Both 1 and 2

Which one of the following statements about preparation of financial statements of a limited liability company is correct ? (A) Financial statements should be prepared according to the cash basis of accounting only (B) Financial statements should be prepared according to the accrual basis of accounting only (C) Financial statements should be prepared according to either the cash basis or accrual basis of accounting (D) Financial statements should be prepared according to both the accrual and cash basis of accounting

Description : Which one of the following statements about preparation of financial statements of a limited liability company is correct ? (A) Financial statements should be prepared according to the cash basis ... Financial statements should be prepared according to both the accrual and cash basis of accounting

Last Answer : Answer: Financial statements should be prepared according to the accrual basis of accounting only

Why does a company choose to have an independent auditor report on its financial statements? a. Independent auditors will always detect management fraud. b. Independent auditors guarantee the accuracy of the financial statements. c. The company preparing the statements may have a vested interest in reporting certain results. d. An independent audit is designed to search for deficiencies in the company's internal control

Description : Why does a company choose to have an independent auditor report on its financial statements? a. Independent auditors will always detect management fraud. b. Independent auditors guarantee the accuracy ... . An independent audit is designed to search for deficiencies in the company's internal control

Last Answer : The company preparing the statements may have a vested interest in reporting certain results.

Share Premium received by a Company may be used for– (A) Payment of dividend (B) Payment of remuneration to management (C) Issue of Bonus shares (D) None of these

Description : Share Premium received by a Company may be used for– (A) Payment of dividend (B) Payment of remuneration to management (C) Issue of Bonus shares (D) None of these

Last Answer : Answer: Issue of Bonus shares

Who are entitled to take part in the control and management of business in a company?

Description : Who are entitled to take part in the control and management of business in a company?

Last Answer : The board of directors elected by the shareholders

If the goodwill raised at the time of retirement of a partner is to be written-off, then the capital accounts of the remaining partners are debited in– (A) New profit sharing ratio (B) Capital ratio (C) Old profit sharing ratio (D) Sacrificing ratio

Description : If the goodwill raised at the time of retirement of a partner is to be written-off, then the capital accounts of the remaining partners are debited in– (A) New profit sharing ratio (B) Capital ratio (C) Old profit sharing ratio (D) Sacrificing ratio

Last Answer : Answer: Old profit sharing ratio

Final accounts prepared in narrative style are in– (A) Horizontal form (B) Accounts form (C) Vertical form (D) None of the above

Description : Final accounts prepared in narrative style are in– (A) Horizontal form (B) Accounts form (C) Vertical form (D) None of the above

Last Answer : Answer: Vertical form

The goods taken by the proprietor from the shop is debited to– (A) Shop account (B) Goods account (C) Capital account (D) Drawings accounts

Description : The goods taken by the proprietor from the shop is debited to– (A) Shop account (B) Goods account (C) Capital account (D) Drawings accounts

Last Answer : Answer: Drawings accounts

Statutory cost audit are applicable only to: (a) Firm (b) Company

Description : Statutory cost audit are applicable only to: (a) Firm (b) Company

Last Answer : (b) Company

Users of financial statements demand independent audit because a. Users demand assurance that fraud does not exist. b. Management may not be objective in reporting. c. Users expect auditors to correct management errors. d. Management relies on the auditor to improve internal control.

Description : Users of financial statements demand independent audit because a. Users demand assurance that fraud does not exist. b. Management may not be objective in reporting. c. Users expect auditors to correct management errors. d. Management relies on the auditor to improve internal control.

Last Answer : Management may not be objective in reporting

The tool used by auditor to monitor and control the progress of audit work is– (A) Engagement diary (B) Audit programme (C) Audit working papers (D) Audit notes.

Description : The tool used by auditor to monitor and control the progress of audit work is– (A) Engagement diary (B) Audit programme (C) Audit working papers (D) Audit notes.

Last Answer : Answer: Audit programme

Which audit is carried out during the accounting period with some interval, it is called– (A) periodic audit (B) partial audit (C) continuous audit (D) interim audit

Description : Which audit is carried out during the accounting period with some interval, it is called– (A) periodic audit (B) partial audit (C) continuous audit (D) interim audit

Last Answer : Answer: continuous audit

Sometimes an auditor is called upon to review the operations of an enterprise for evaluating their cost-effectiveness. What is this kind of audit generally known as ? (A) Cost Audit (B) Operations Audit (C) Tax Audit (D) Independent Financial Audit

Description : Sometimes an auditor is called upon to review the operations of an enterprise for evaluating their cost-effectiveness. What is this kind of audit generally known as ? (A) Cost Audit (B) Operations Audit (C) Tax Audit (D) Independent Financial Audit

Last Answer : Answer: Cost Audit

What is a systematic evaluation of a company's activities in a given area of social interest such as environmental protection, workplace safety or community involvement, called ? (A) Social responsibility (B) Social accounting (C) Social audit (D) Social forecasting

Description : What is a systematic evaluation of a company's activities in a given area of social interest such as environmental protection, workplace safety or community involvement, called ? (A) Social responsibility (B) Social accounting (C) Social audit (D) Social forecasting

Last Answer : Answer: Social audit

Where does an auditor of a cooperative society submit the audit report ? (A) To the managing committee of the society only (B) To the Registrar of Cooperative Societies of the State concerned only (C) To the State Assembly concerned (D) To the Registrar of Cooperative Societies of the State concerned and a copy to the society

Description : Where does an auditor of a cooperative society submit the audit report ? (A) To the managing committee of the society only (B) To the Registrar of Cooperative Societies of the State concerned only (C ... (D) To the Registrar of Cooperative Societies of the State concerned and a copy to the society

Last Answer : Answer: To the Registrar of Cooperative Societies of the State concerned only

Which audit is conducted only once in a while and that also when the client desires?

Description : Which audit is conducted only once in a while and that also when the client desires?

Last Answer : Occasional audit

What is Audit?

Description : What is Audit?

Last Answer : An audit may be said to be such an examination of books, accounts and vouchers of a business, whether it is in a proper manner for the financial period.

Which one of the following statements is not correct ? (A) Business firms combine to avoid wasteful competition (B) Business combination is possible only among joint stock companies (C) Business firms may combine to take advantage of patent rights of individual firms (D) During economic depression, small firms are absorbed by financially sound large firms

Description : Which one of the following statements is not correct ? (A) Business firms combine to avoid wasteful competition (B) Business combination is possible only among joint stock companies (C) Business ... firms (D) During economic depression, small firms are absorbed by financially sound large firms

Last Answer : Answer: Business combination is possible only among joint stock companies

The scheme allows the transfer of scrip once the export obligation is complete. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Description : The scheme allows the transfer of scrip once the export obligation is complete. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Last Answer : Answer: Both 1 and 2

Legitimate power is the right to manage derived from delegation based on ownership or property rights. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Description : Legitimate power is the right to manage derived from delegation based on ownership or property rights. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2

Last Answer : Answer: Both 1 and 2

Which one of the following statements is correct ? When creditors' velocity or creditors' turnover is higher as compared to debtors' velocity, it would (A) improve liquidity (B) reduce liquidity (C) have no effect on liquidity (D) improve financial position

Description : Which one of the following statements is correct ? When creditors' velocity or creditors' turnover is higher as compared to debtors' velocity, it would (A) improve liquidity (B) reduce liquidity (C) have no effect on liquidity (D) improve financial position

Last Answer : Answer: have no effect on liquidity

Identify the correct statement. a. Accounting services do not provide attestation. b. Management consulting services provide attestation in all cases. c. An audit provides limited assurance by attesting to the fairness of the client's assertions. d. A review provides positive assurance by attesting the reliability of the client's assertions

Description : Identify the correct statement. a. Accounting services do not provide attestation. b. Management consulting services provide attestation in all cases. c. An audit provides limited assurance by ... d. A review provides positive assurance by attesting the reliability of the client's assertions

Last Answer : Accounting services do not provide attestation

Which of the following is called Backbone of auditing ? (A) Routine checking (B) Vouching (C) Internal checks (D) Internal control

Description : Which of the following is called Backbone of auditing ? (A) Routine checking (B) Vouching (C) Internal checks (D) Internal control

Last Answer : Answer: Vouching

Which one of the following is not included in the internal check as regards purchases ? (A) Assessment of requirements (B) Placing orders (C) Despatch of goods (D) Recording and making payments

Description : Which one of the following is not included in the internal check as regards purchases ? (A) Assessment of requirements (B) Placing orders (C) Despatch of goods (D) Recording and making payments

Last Answer : Answer: Despatch of goods

Organisational change is necessitated by– (A) External environmental pressure (B) Internal strengths and weaknesses (C) Sequential changes (D) All the above

Description : Organisational change is necessitated by– (A) External environmental pressure (B) Internal strengths and weaknesses (C) Sequential changes (D) All the above

Last Answer : Answer: All the above

Which one of the following is called backbone of auditing ? (A) Routine checking (B) Vouching (C) Internal check (D) Internal control

Description : Which one of the following is called backbone of auditing ? (A) Routine checking (B) Vouching (C) Internal check (D) Internal control

Last Answer : Answer: Vouching

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of the auditor's report. b. Study and evaluate the system of internal administrative control. c. Tour the client's facilities and review the general records. d. Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management

Description : Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement? a. Prepare a rough draft of the financial statements and of ... and review the work of the predecessor auditor prior to discussing the engagement with the client management

Last Answer : Tour the client's facilities and review the general records

Unlike consulting services, in assurance services: a. There is confirmation that financial statement assertions are accurate. b. Misstated account balances are generally corrected by an independent audit. c. Ineffective internal controls may exist. d. Competing interests may exist between management and the users of statements

Description : Unlike consulting services, in assurance services: a. There is confirmation that financial statement assertions are accurate. b. Misstated account balances are generally corrected by an independent audit. ... may exist. d. Competing interests may exist between management and the users of statements

Last Answer : Competing interests may exist between management and the users of statements

The responsibility for adopting sound accounting policies, maintaining adequate internal control, and making fair representations in the financial statements rests a. With the management. b. With the independent auditor. c. Equally with management and the auditor. d. With the internal audit department.

Description : The responsibility for adopting sound accounting policies, maintaining adequate internal control, and making fair representations in the financial statements rests a. With the management. b. With the independent ... c. Equally with management and the auditor. d. With the internal audit department.

Last Answer : With the management

Internal auditing can affect the scope of the external auditor's audit of financial statements by a. Decreasing the external auditor's need to perform detailed testsb. Eliminating the need to observe thephysical inventory taking.c. Allowing the external auditor to limithis/her audit to the performance ofsubstantive test procedures.d. Limiting direct testing by the externalauditor to management assertions notdirectly tested by internal auditing.

Description : Internal auditing can affect the scope of the external auditor's audit of financial statements by a. Decreasing the external auditor's need to perform detailed tests b. Eliminating the need ... direct testing by the external auditor to management assertions not directly tested by internal auditing.

Last Answer : Decreasing the external auditor's need to perform detailed tests

Operational audits generally have been conducted by internal and COA auditors, but may be performed by certified public accountants. A primary purpose of an operational audit is to provide: a. A measure of management performance in meeting organizational goalsb. The results of internal examinations of financial and accounting matters to a company's top-level management. c. Aid to the independent-auditor, who is conducting the examination of the financial statements. d. A means of assurance that internal accounting controls are functioning as planned.

Description : Operational audits generally have been conducted by internal and COA auditors, but may be performed by certified public accountants. A primary purpose of an operational audit is to provide: ... statements. d. A means of assurance that internal accounting controls are functioning as planned

Last Answer : A measure of management performance in meeting organizational goals

The management responsibility to detect and prevent fraud and error is accomplished by a. Having an annual audit of financial statements. b. Implementing adequate quality control system. c. Implementing adequate accounting and internal control system. d. Issuing a representation letter to the auditor.

Description : The management responsibility to detect and prevent fraud and error is accomplished by a. Having an annual audit of financial statements. b. Implementing adequate quality control system. c. ... adequate accounting and internal control system. d. Issuing a representation letter to the auditor.

Last Answer : Implementing adequate accounting and internal control system

The Open Market Operations [OMOs] is an important tool of– (A) Forex management (B) Liquidity management (C) Inventory management (D) Marketing management

Description : The Open Market Operations [OMOs] is an important tool of– (A) Forex management (B) Liquidity management (C) Inventory management (D) Marketing management

Last Answer : Answer: Liquidity management