hitechpathshala

Q. 1

The persons with responsibility for overseeing the strategic direction of the entity and obligations related to the accountability of the entity are :

management

Those charged with governance

audit committee

board of directors

Q. 2

The Auditor of a Sole Proprietor Concern is appointed by

CAG

Bank

Sole Proprietor himself

District Administration

Q. 3

. Which of the following is Incorrect:

An auditor conducting an audit in accordance with SAs is responsible for obtaining absolute assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error.

As described in SA 200, owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements will not be detected, even though the audit is properly planned and performed in accordance with the SAs.

The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not detecting one resulting from error.

The risk of the auditor not detecting a material misstatement resulting from management fraud is greater than for employee fraud.

Q. 4

With respect to auditing, which of the following statement is correct:

Audited financial statements are absolutely free from all material misstatement due to fraud or error

An audit is an official investigation into alleged wrongdoing and auditor has specific legal powers to conduct investigation

The auditor can obtain only a reasonable assurance about whether the financial statement as a whole are free from material misstatement and report on it.

An auditor’s opinion is an assurance as the future viability of the enterprise or the efficiency or effectiveness of the management.

Q. 5

The matter of difficulty, time, or cost involved is :

not in itself a valid basis for the auditor to omit an audit procedure for which there is no alternative.

in itself a valid basis for the auditor to omit an audit procedure for which there is no alternative

not in itself a valid basis for the auditor to omit an audit procedure for which alternative exists.

not in itself a valid basis for the auditor to omit an audit procedure.

Q. 6

Determining a percentage to be applied to a chosen benchmark (in relation to materiality) involves the exercise of

Independence

Professional Judgement

Professional skepticism

All of the above

Q. 7

Which of the following is the responsibility of the auditor:

Preparation and presentation of the financial statements in accordance with applicable financial reporting

Design, implementation and maintenance of internal controls

Express an opinion on the Financial Statements

To obtain limited assurance.

Q. 8

The persons with responsibility for overseeing the strategic direction of the entity and obligations related to the accountability of the entity are

Management

those charged with governance

audit committee

board of directors

Q. 9

M/s KYC & Co. is a reputed Audit firm in Mumbai. They are appointed as Statutory Auditors of Blessed Ltd. Which of the below is the responsibility of M/s KYC & Co.

Preparation of financial statements

Designing, implementation and maintenance of internal control system

Reporting on true and fair view of financial statements

Compliance with the applicable law and regulation.

AUDIT CH-1

Marks: 9