The concept of stewardship means that a company’s directors________________?

Related Mcqs:

1. 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

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 of the following is NOT the responsibility of a company’s directors?

   A. Reporting to the shareholders on the accuracy of the accounts
   B. Establishment of internal controls
   C. Keeping proper accounting records
   D. Supplying information and explanations to the auditor

4. 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

5. If a casual vacancy in the office of auditor arises by his resignation it should only be filled by the company in a_________?

   A. Board meeting
   B. extraordinary general meeting
   C. General meeting
   D. annual general meeting

6. 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.

7. Auditor of a___________company does not have right to visit foreign branches of the company?

   A. Unlimited liability
   B. Manufacturing
   C. Banking
   D. Non­profit making

8. You have been proposed as auditor of a company. What is the first step that you should take?

   A. Obtain the client’s permission to communicate with the existing auditor
   B. Obtain the existing auditor’s working papers
   C. Obtain a copy of the company’s most recent board minutes
   D. Obtain a copy of the existing auditor’s letter of engagement

9. 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

10. In determining the level of materiality for an audit, what should not be considered?

    A. Prior year’s errors
    B. The auditor’s remuneration
    C. Adjusted interim financial statements
    D. Prior year’s financial statements