Sindh Public Service Commission (SPSC), Audit Officer (BPS-17) Mcqs
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===(SPSC), Audit Officer (BPS-17) Mcqs===
1. A voucher may be:
a) Payment bill.
b) Wages Sheet.
c) Bank Receipt.
d) All of the above. (✓✓✓)
2. The Object of vouching is to ensure the following:
a) Availability of complete evidence.
b) Authorization.
c) Correct Allocation.
d) All of the given options (✓✓✓)
3. End product of every audit is:
a) Income Statement.
b) Fund flow Statement.
c) Cash Flow Statement.
d) Audit report. (✓✓✓)
4. If the Auditor after completion of the audit concludes that the financial statements give a true and fair view, such opinion of the auditor is termed as:
a) Unqualified opinion. (✓✓✓)
b) Qualified opinion.
c) Adverse opinion.
d) Disclaimer opinion.
5. The Auditor is representative of:
a) Government Employee.
b) Customer.
c) Director.
d) Share holders. (✓✓✓)
6. After how many days the first auditor can be appointed by the authority:
a) Within 60 days. (✓✓✓)
b) Within 90 days.
c) Within 100 days.
d) None of the above.
7. Remuneration of the auditor will be fixed by:
a) Share holders.
b) Directors.
c) Authority (SECP)
d) All of the above. (✓✓✓)
8. According to the provisions of the company ordinance 1984, as amended in 2001, the auditor of a Public Limited Company should be:
a) ICMA.
b) Chartered Accountant. (✓✓✓)
c) ACCA.
d) DCMA.
9. The Investigator may be appointed by:
a) Share holders.
b) Owners.
c) Creditors.
d) All of the above. (✓✓✓)
10. Rights, duties and liabilities of an auditor are laid down in the:
a) Partnership Act 1932.
b) Company Ordinance 1984 as amended in 2001.
c) Income Tax Ordinance 2001.
d) Custom Act 1971. (✓✓✓)
11. Contingent liabilities are shown in:
a) Balance Sheet.
b) Profit and Loss Account.
c) Notes attached to the balance sheet (✓✓✓)
d) None of the above.
12. The following can be appointed as auditor:
a) Creditor of the Company. (✓✓✓)
b) Debtor of the Company.
c) Share holder of the Company.
d) Director of the Company.
13. Vouching involves:
a) Checking of voucher.
b) Checking of transactions.
c) Reconciliation of (a) & (b).
d) All of the above (✓✓✓)
14. The change in the voucher should be confirmed by:
a) The person changing it.
b) The person Junior to him.
c) The person Senior to him.
d) The debtors or creditors. (✓✓✓)
15. Vouching is said to be:
a) Essence of auditing.
b) First step in auditing.
c) Last step in auditing.
d) All of the given options. (✓✓✓)
16. Verification ensures the:
a) Existence of assets/liabilities.
b) Valuation of assets/liabilities.
c) Ownership of assets/llabilities.
d) All of the given options. (✓✓✓)
17. The first auditor can be appointed by:
a) The director. (✓✓✓)
b) The Shareholders.
c) The Security and Exchange Commnission of Pakistan
d) None of the given options.
18. The retiring auditor can be re-appointed If:
a) Directors desire so.
b) Members desire so. (✓✓✓)
c) Creditors desire so.
d) Debtors desire so.
19. Prior notice is necessary for
a) Removing old auditor.
b) Appointing new auditor. (✓✓✓)
c) Re-appointment of old auditor.
d) Appointing statutory auditor.
20. The auditor can be removed by the:
a) Directors of the Company.
b) Creditors of the Company.
c) Debtors of the Company.
d) Members of the Company. (✓✓✓)
21. Income Statement and receipt and Payment Statement are:
3) One and the same.
b) Differ with each others. (✓✓✓)
c) Part of each other.
d) None of the given option.
22. Statuary report is needed by:
a) Private Limited Company.
b) Public Limited Company. (✓✓✓)
C) Both Private and Public Companies.
d) Partnership Business.
23. Prospectus report contains Progress of the Company in the:
a) Past 5 years. (✓✓✓)
b) Past 3 years.
c) Past 2 years.
d) Future 5 years.
24. Auditors quality their report when:
a) They agree with the management.
b) They discover irregularities.
c) They suspect irregularities.
d) They disagree with the management. (✓✓✓)
25. A qualified report is:
a) Favorable for management. (✓✓✓)
b) Favorable for business.
c) Against the business.
d) Against the members
26. The main object of an audit of Financial Statements Is:
a) Expression of opinion.
b) Dotection of fraud and error.
c) Both A & B (✓✓✓)
d) Depends on the type of audit.
27. Depreciation does not arise from:
a) Effusion of time.
b) Use.
c) Obsolescence through technology.
d) Remarket expectation. (✓✓✓)
28. A Sale of Rs.50,000 to A was entered as a sale to B. This is an example of:
a) Error of omission.
b) Error of commission. (✓✓✓)
c) Compensating error.
d) Error of principle.
29. In case the directors fail to appoint first auditor (s), the shareholders shall appoint them at.......... by passing a resolution:
a) A general meeting. (✓✓✓)
b) First annual general meeting.
c) Statutory meeting.
d) Annual general meeting.
30. The risk of management fraud increases in the presence of:
a) Frequent changes in supplies.
b) Improved internal control system
c) Substantial increases in sales.
d) Management incentive system based on Sales done in a quarter (✓✓✓)
31. Audit of banks is an example of:
a) Statutory audit.
b) Balance Sheet audit.
C) Internal audit.
d) All of the above. (✓✓✓)
32. Audit programmed is prepared by:
a) The auditor.
b) The client.
c) The audit assistants. (✓✓✓)
d) The auditor and his audit assistants.
33. To test whether sales have been recorded, the auditor should draw a sample from a file of:
a) Purchase orders.
b) Sales Orders.
c) Sales invoices. (✓✓✓)
d) Bill of lading.
34. Which of the following best describes the primary purpose of audit programme preparation?
a) To detect errors or fraud.
b) To comply with GAAP.
c) To gather sufficient appropriate evidence.
d) To assess audit risk. (✓✓✓)
35. 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 given options.
36. Allowance for doubtful accounts would be listed on the balance sheet under the caption:
a) Investment.
b) Plant Assets.
c) Current Assets. (✓✓✓)
d) Owner's equity.
37. An Auditor should study and evaluate internal control to:
a) Determine whether assets are safeguarded.
b) Suggest improvements in internal control.
c) Plan audit procedures. (✓✓✓)
d) Express the opinion.
38. Tests of controls are not concerned with:
a) Existence of controls.
b) Effectiveness of controls.
c) Continuing of controls.
d) Designing of controls. (✓✓✓)
39. Audit in department is synonymous for:
a) Complete audit.
b) Continuous audit. (✓✓✓)
c) Final audit.
d) Detailed audit
40. In determining the level of materiality for an audit, what should not be considered?
a) Prior year's errors.
b) The auditor's remuneration. (✓✓✓)
c) Adjusted interim financial statements.
d) Prior year's financial statements.
41. Which of the following affects audit effectiveness?
a) Risk of over reliance.
b) Risk of incorrect rejection.
C) Risk of incorrect acceptance.
d) Both (a) & (c). (✓✓✓)
42. If the cost of goods sold = Rs. 80,000/- Gross profit Margin = 20 % of sales. Calculate the Gross Profit margin:
a) Rs.64,000/-
b) Rs.48,000/-
c) Rs.16,000/-
d) Rs.20,000/- (✓✓✓)
43. Which of the following assets is least likely to be subjected to lien?
a) Free hold land.
b) Plant and Machinery.
c) Leasehold property. (✓✓✓)
d) Motor vehicles
44. The Auditor should examine subsequent realization of revenue such as dividends, Interest, commission etc., to:
a) Identify cases of unrecorded severe: (✓✓✓)
b) Ensure proper disclosure in the balance sheet.
c) Recomputed accrued income on the date of balance sheet.
d) Any of the given options.
45. Which one of the following cost would not be termed as product cost?
a) Direct Material.
b) Direct Labour.
c) Administrative Salaries. (✓✓✓)
d) Plant Supervisor's Salary.
46. Which of the following is a revenue reserve?
a) Capital redemption reserve.
b) Security premium account.
c) Debenture redemption reserve. (✓✓✓)
d) Capital reserve.
47. The most difficult type of misstatement to detect fraud is based on:
a) Related party purchases.
b) The related party sales.
c) The restatement of sales.
d) Omission of a sales transaction from bearing recorded. (✓✓✓)
48. Balance sheet audit includes verification of:
a) Assets.
b) Liabilities.
c) Income and expenses accounts where appropriate
d) All of the above. (✓✓✓)
49. In case the auditor gives a disclaimer of opinion in the audit report, which of the following paragraph (s) of a standard unqualified audit report are modified?
a) Scope paragraph.
b) Opinion paragraph.
c) Scope and opinion paragraph. (✓✓✓)
d) Introductory, Scope and opinion paragraph.
50. For vouching of which item, the auditor is most likely to examine cost records?
a) Commission earned.
b) Bad debts recorded.
c) Credit sales.
d) Sale of Scrap. (✓✓✓)
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