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By Auditing Mcqs No Comments

The degree of effectiveness of an internal control system depends on:

A. The design of the internal control system and the implementation of the controls
B. The design of the internal controls and the implementation of the control system
C. The implementation of the controls and the correctness of the accounting records
D. The design of the internal control system and the correctness of the accounting records

Related Mcqs:

  1. Which of the following affects audit effectiveness?

    A. Risk of over reliance
    B. Risk of incorrect rejection
    C. Risk of incorrect acceptance
    D. Both A and C

  2. Internal audit is undertaken:

    A. By independent auditor
    B. Statutorily appointed auditor
    C. By a person appointed by the management
    D. By a government auditor

  3. The scope of internal audit is decided by the___________?

    A. Shareholders
    B. Management
    C. Government
    D. Law

  4. Internal check is carried on by___________?

    A. Staff specially appointed for the purpose
    B. Internal auditor
    C. Supervisor of the staff
    D. Members of the staff

  5. Process of verifying the documentary evidences of transactions are known as___________?

    A. Auditing
    B. Testing
    C. Vouching
    D. Verification

  6. 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

  7. Lapping is also known as___________?

    A. Teeming and lading
    B. Looping
    C. Embezzlement
    D. Hacking

  8. Which of the following statements is most closely associated with analytical procedure applied at substantive stage?

    A. It helps to study relationship among balance sheet accounts
    B. It helps to discover material misstatements in the financial statements
    C. It helps to identify possible oversights
    D. It helps to accumulate evidence supporting the validity of a specific account balance

  9. Which of the following documents is not relevant for vouching cash sales?

    A. Daily cash sales summary
    B. Salesmen’s summary
    C. Monthly statements sent to customers
    D. Bank statement

  10. Which of the following statements is INCORRECT?

    A. An auditor may serve on the board of directors of an audit client.
    B. An auditor who is an immediate family member of the director of an audit client must not be assigned to the audit team.
    C. Purchasing goods from an audit client on normal commercial terms does not create a threat to the auditor’s independence.
    D. An auditor who was recently a director of an audit client must not be assigned to the audit team for that client.

The correct answer to the question: "The degree of effectiveness of an internal control system depends on:" is "The design of the internal control system and the implementation of the controls ".

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