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

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. 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

3. 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

4. When an auditor is proposed for removal from office, which one of the following is he NOT permitted to do?

   A. Circulate representations to members
   B. Apply to the court to have the proposal removed
   C. Speak at the AGM/EGM where the removal is proposed
   D. Receive notification of the AGM/EGM where the removal is proposed

5. 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

6. 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

7. 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.

8. 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

9. 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

10. 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.