An auditor is like a_______________?

Related Mcqs:

1. Assuming that it is not the first appointment of the auditor, who is responsible for the appointment of the auditor?

   A. The shareholders in a general meeting
   B. The managing director
   C. The board of directors in a board meeting
   D. The audit committee

2. The term of the auditor ship of first auditor would be from the date of appointment till________?

   A. the conclusion of statutory meeting
   B. the conclusion of first annual general meeting
   C. the conclusion of next annual general meeting
   D. the date of removal

3. The auditor has serious concern about the going concern of the company. It is dependent on company’s obtaining a working capital loan from a bank which has been applied for. The management of the company has made full disclosure of these facts in the notes to the balance sheet. The auditor is satisfied with the level of disclosure. He should issue___________?

   A. unqualified opinion
   B. unqualified opinion with reference to notes to the accounts
   C. qualified opinion
   D. disclaimer of opinion

4. The independent auditor’s primary responsibility is to______________?

   A. the directors
   B. the company’s creditors (payables)
   C. the company’s bank
   D. the shareholders

5. How long is the auditor’s term of office?

   A. Until the audit is complete
   B. Until the financial statements are complete
   C. Until the next AGM (Annual General Meeting)
   D. Until the directors remove them

6. 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.

7. When applying analytical procedures, an auditor could develop independent estimate of an account balance to compare it to­___________?

   A. client’s unedited account balance
   B. client’s unedited account balance adjusted for trends in the industry
   C. Prior year audited balance
   D. Prior year audited balance adjusted for trends in the industry

8. 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

9. The auditor has a right to­___________?

   A. Obtain information and explanation
   B. Obtain information and explanation from the employees and officers
   C. Obtain information and explanation necessary for the purpose of audit
   D. Both B. and C.

10. The client changed method of depreciation from straight line to written down value method. This has been disclosed as a note to the financial statements. It has an immaterial effect on the current financial statements. It is expected, however, that the change will have a significant effect on future periods. Which of the following option should the auditor express?

    A. Unqualified opinion
    B. Qualified opinion
    C. Disclaimer of opinion
    D. Adverse opinion