MCQs on Auditing (with Answers): A collection
In this post, we have provided a wide range of multiple-choice questions (MCQs) on auditing with answers.
The basic goal of auditing is to confirm the accuracy of books of account prepared by an accountant. It is a well-known phrase that “where the role of an Accountant ends, the audit begins to determine the true and fair picture of such accounts.”
Auditing is done to determine the accuracy and reliability of financial information. The primary function of auditing is to examine books of account with accompanying vouchers and documentation in order to detect and prevent errors and fraud. The auditor must also assess the efficacy of the internal control system in order to determine the scope of the audit work to be performed.
Given below are the MCQs on auditing. You may find both knowledge-based as well as application-based MCQs here.
Auditing MCQs
Q1. Which of the following details are included in an audit notebook?
- Matters requiring explanations or clarifications
- Details of work done
- Information to be used as a reference for future audits
- All of the above
Answer: 4. All of the above
Q2. Which amongst the following has a broader scope?
- Internal audit
- Internal control
- Internal check
- None of the above
Answer: 2. Internal control
Q3. An internal auditor can operate in the role of ______________.
- A temporary employee
- A permanent employee
- A daily wager
- None of the above
Answer: 2. A permanent employee
Q4. What is the main objective of vouching?
- To prepare a Balance Sheet
- To carry out routine checking
- To examine accounting vouchers
- To verify the authenticity, accuracy, and authority of all transactions
Answer: 4. To verify the authenticity, accuracy, and authority of all transactions
Q5. Valuation is the basis of which of the following processes?
- Vouching
- Marketing
- Verification
- Internal checking
Answer: 3. Verification
Q6. The first auditors in a company are appointed by whom?
- Shareholders
- Company Law Board
- Board of Directors
- Central Government
Answer: 3. Board of Directors
Q7. Which of the following best describes a range of checks and controls implemented in a business to ensure its smooth and efficient functioning?
- Internal audit
- Internal check
- Internal control
- None of the above
Answer: 3. Internal control
Q8. A voucher is related to:
- A cash receipt
- A cash payment
- A credit transaction
- All of the above
Answer: 4. All of the above
Q9. The main objective of an internal check system is to ___________.
- Prevent fraud and errors
- Detect frauds
- Help in auditing in depth
- Detect errors
Answer: 1. Prevent frauds and errors
Q10. The internal auditor in a company is appointed by whom?
- Shareholders
- Management
- Statutory bodies
- Central Government
Answer: 2. Management
Q11. The process of auditing begins where __________ ends.
- Accounting
- Inventory valuation
- Selling
- Purchase and expenditure
Answer: 1. Accounting
Q12. When the work of one clerk is automatically checked by another, it is known as ___________.
- Internal audit
- Internal check
- Internal control
- None of the above
Answer: 2. Internal check
Q13. The owners of a corporate entity are referred to as __________________.
- Debtors
- Shareholders
- Debenture holders
- None of the above
Answer: 2. Shareholders
Q14. The main objective of investigation is to _______________.
- To prevent fraud and errors
- To discover fraud and errors
- To verify financials
- All of the above
Answer: 4. All of the above
Q15. The system of internal control and internal check are _______________.
- One and the same
- Different from each other
- Internal controls include an internal check system
- None of the above
Answer: 3. Internal controls include an internal check system
MCQs on auditing continued on next page……
