Concealment of shortage by delaying the recording of cash receipts is known

as_____________?
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A. Embezzlement
B. Misappropriation
C. Lapping
D. None of these

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

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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

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

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A. Are responsible for ensuring that the company complies with the law
B. Are responsible for ensuring that the company pays its tax by the due date
C. Safeguard the company’s assets and manage them on behalf of the shareholders
D. Report suspected fraud and money laundering to the authorities

Why do auditors concentrate their efforts on material items in accounts?

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A. Because they are easier to audit

B. Because it reduces the audit time
C. Because the risk to the accounts of their being incorrectly stated is greater
D. Because the directors have asked for it

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

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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

International auditing standards are issued by the______________?

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A. International Accounting Standards Board

B. Financial Accounting Standards Board
C. International Standards Board
D. Auditing Practices Board

Which of the following is not true about opinion on financial statements?

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A. The auditor should express an opinion on financial statements.

B. His opinion is no guarantee to future viability of business
C. He is responsible for detection and prevention of frauds and errors in financial
statements
D. He should examine whether recognised accounting principle have been consistently

A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of____________?

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A. Error of omission
B. Error of commission
C. Compensating error
D. Error of principle

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

Which one of the following is NOT a duty of the auditor?

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A. Duty to report to the company’s bankers

B. Duty to report to the members
C. Duty to sign the audit report
D. Duty to report on any violation of law

Assuming that it is not the first appointment of the auditor, who is responsible for the
appointment of the auditor?
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A. The shareholders in a general meeting

B. The managing director
C. The board of directors in a board meeting
D. The audit committee