Auditing Mcqs

The independent auditor’s primary responsibility is to______________?

A. the directors
B. the company’s creditors (payables)
C. the company’s bank
D. the holders

Assuming that it is not the first appointment of the auditor, who is responsible for the appointment of the auditor?

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

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

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

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

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

A. The auditor should express an oion on financial statements.
B. His oion 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. International Accounting Standards Board
B. International Federation of Accountants
C. International Standards Board
D. Auditing Practices Board

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

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

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

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

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

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 holders
D. Report suspected fraud and money laundering to the authorities