Internal audit is undertaken:

Related Mcqs:

1. ______the audit risks_______the materiality and_________the audit effort.

   A. Lower, Higher, Lower
   B. Lower, Lower, Higher
   C. Higher, Lower, Lower
   D. Lower, Higher, Higher

2. In an audit of financial statements, substantive tests are audit procedures that __________?

   A. May be eliminated for an account balance under certain conditions
   B. Are designed to discover significant subsequent events
   C. Will increase proportionately when the auditor decreases the assessed level of control risk
   D. May be test of transactions, test of balance and analytical procedures

3. For what minimum period should audit working papers be retained by audit firm?

   A. For the time period the entity remains a client of the audit firm.
   B. For a period of ten years
   C. For a period auditor opines them to be useful in servicing the client
   D. For the period the audit firm is in existence.

4. _______the audit risk,_______the materiality and _______the audit effort?

   A. Lower, Higher, Lower
   B. Lower, Lower, Higher
   C. Higher, Lower, Lower
   D. Lower, Higher, Higher

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

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

6. Concurrent audit is a part of____________?

   A. Internal check system
   B. Continuous audit
   C. Internal audit system
   D. None of these

7. Which of the following statements is, generally, correct about the reliability of audit evidence?

   A. To be reliable, evidence should conclusive rather than persuasive
   B. Effective internal control system provides reliable audit evidence
   C. Evidence obtained from outside sources routed through the client
   D. All are correct.

8. 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

9. When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the_____________?

   A. Amount of known misstatement is documented in working papers
   B. Estimates of the total likely misstatement is less than materiality level
   C. Estimate of the total likely misstatement is more than materially level
   D. Estimates of the total likely misstatement cannot be made

10. Which of the following statements is not true about continuous audit?

    A. It is conducted at regular interval
    B. It may be carried out on daily basis
    C. It is needed when the organization has a good internal control system
    D. It is expensive