____________ is a systematic examination of the books and records or a business?

Related Mcqs:

1. The basic assumption underlying the use of analytical procedures is:____________?

   A. It helps the auditor to study relationship among elements of financial information
   B. Relationship among data exist and continue in the absence of known condition to the contrary
   C. Analytical procedures will not be able to detect unusual relationships
   D. None of the above.

2. The fundamental objective of the audit of a company is to_____________?

   A. Protect the interests of the minority shareholders
   B. Detect and prevent errors and fraud
   C. Assess the effectiveness of the company’s performance
   D. Attest to the credibility of the company’s accounts

3. Which one of the following is NOT considered to be part of planning?

   A. Background i.e. industry
   B. Previous year’s audit i.e. any qualifications in the report
   C. Considering the work to be done by the client staff e.g. internal audit
   D. Considering whether the financial statements show a true and fair view

4. Audit in depth is synonymous for____________?

   A. Complete audit
   B. Completed audit
   C. Final audit
   D. Detailed audit

5. Verification refers to_________?

   A. Examining the physical existence and valuation of assets.
   B. Examining the journal and ledger
   C. Examination of vouchers related to assets.
   D. None of the above.

6. The auditor’s permanent working paper file should not normally, include__________?

   A. Extracts from client’s bank statements
   B. Past year’s financial statements
   C. Attorney’s letters
   D. Debt agreements

7. In Pakistan, balance sheet audit is synonymous to___________?

   A. Annual audit
   B. Continuous audit
   C. Detailed audit
   D. Statutory audit

8. What is the primary objective of analytical procedures used in the overall review stage of an audit?

   A. To help to corroborate the conclusions drawn from individual components of financial statements
   B. To reduce specific detection risk
   C. To direct attention to potential risk areas
   D. To satisfy doubts when questions arise about a client’s ability to continue

9. Who out of the following cannot be appointed as a statutory auditor of the company?

   A. Erstwhile director
   B. Internal auditor
   C. Relative of a director
   D. Only (B. and (C.

10. What is meant by negative assurance?

    A. The auditor cannot give an opinion due to lack of evidence.
    B. The client’s financial statements were found to be materially misstated.
    C. The auditor could not conduct any tests due to lack of controls.
    D. The auditor did not find anything to indicate that a material misstatement exists.