UNIT I

1. The chartered Accountants Act is in ------a)1956 b)1959 c)1949 d)1950 2. Auditor is an ------of a shareholder a)Owner b)Agent c)Employer d) Educator 3. ------begins where accounting ends a)Bookkeeping b)Auditing c) Internal check d)Internal Control 4. ------audit is compulsory for joint stock companies a)Statutory b)Final c)Continuous d)Partial 5. Auditing refers to ______a) Preparation and checking of account b) Examination of accounts of business units only c) Examination of accounts of professional accountants d) Checking of vouchers 6. Main object of auditing is ______a) Detection of errors b) To find out whether P&L a/c & B/S show true and fair state affairs c) Detection of frauds d) Detection and prevention of frauds and errors. 7. Auditing is compulsory for ______a) Small scale business enterprises b) All partnership firms c) All joint stock companies d)All proprietary concerns 8. Interim audit refers to ______a) Examination of accounts continuously b) Examination of accounts intermittently c) Audit work to find out and check interim profits of a company d) Carrying on audit for bonus purposes at the end of the year 9. A continuous audit is specially needed for ______a) Any trading concern b) Smaller concerns c) Banking companies d) Any manufacturing companies 10. Internal auditor has to submit report to______a) Shareholders b) Government c) Company Law board d) Management 11. Auditor should be dutiful like a ______a) A watch dog b) A blood hound c) A detective d) An insurer 12. Auditor, in general is an ______a) Employee of the company b) Agent of the company c) Agent of the shareholders d) None of the above 13. Management audit means ______a) Audit undertaken on behalf of the management b) Evaluating performance of various management processes and functions c) Audit undertaken on behalf of Govt. to punish management d) Compulsory audit 14. Misappropriation of goods may be checked by______a) Proper supervision over stock b) Checking of employees c) Punishment of employees d) Directors 15. Errors of omission are______a) Technical errors b) Error of principle c) Compensating errors d) None of the above 16. ------audit is more suitable for small business houses

a). Continuous b)Annual c).Partial d) Social

17. Audit working papers are ------

a) Important information about audit b).Appointment letters regarding audit c).Letter of notice d).Rough work of company 18. ------is a written plan containing details with regard to the conduct of a particular audit a)Audit Note book b)Audit programme c)Audit files d)Audit Working papers

19. Which of the following persons is qualified to be a company auditor? a) An employee of the company b) A body corporate c) A person who is indebted to the company for an amount exceeding Rs. 1000 d) A practicing chartered accountant 20. Partial auditing is usually done by a. Sole trading concern b. Joint stock company c. Govt. department d. Partnership concern UNIT II 21. Internal audit means ______a) Audit undertaken to ascertain truth and fairness of state of affairs b) Audit undertaken internally to evaluate management functions c) Audit undertaken by employees of the organization to check financial irregularities d) Audit by independent auditor to improve internal affairs 22. Internal audit is ______a) Compulsory for a company with paid-up capital of Rs. 25 lakh and above b) Voluntary for a company c) Not necessary for a company d) Necessary for a company 23. Internal audit is undertaken ______a) By independent auditor b) Statutorily appointed auditor c) By a person appointed by the management d) By Government auditor 24. The object of internal check is to a) Control wastage of resources b) Prevent errors and frauds c) Verify the cash receipts and payments d) Facilitate quick decision by the management 25. Internal check is a part of ______a) Internal audit b)Internal accounting c)External audit d)Internal control 26. Internal check is carried on by ______a) Special staff b) Internal auditor c) Accountant d) Employee of the company 27. Internal check is suitable for ______a) Larger concerns b) b)Smaller concerns c) Petty shop- keepers d) None of the above 28. The scope of work of internal audit is decided by the ______a) Share holders b) Management c) To improve financial control d) All of the above 29. Test checking is done when there is an effective system of ------a. Internal control b. Internal audit c. Internal check d. Internal management 30. Test checking refers to______a) Testing of accounting records b) Testing of honesty of employees c) Intensive checking of a selected number of transactions d) Checking of all transactions recorded 31. Test checking should not be applied to______a) Sales book b) Purchase book c) Bank reconciliation statement d) Bills book 32. The examinations of financial transactions with supporting evidences is called______a. Verification b. Vouching c. Auditing d. Investigation 33. Vouching implies______a) Inspection of receipts b) Examination of vouchers to check authenticity of records c) Surprise checking of accounting records d) Examining the various assets 34. Process of checking the evidence of the entries called ______. (a) Verification (b) Observation (c) Vouching (d) Inspection 35. Payment for goods purchased should be vouched with the help of ______a) Creditors statement b) Correspondence with suppliers c) Cash memos d) Ledger accounts 36. Payment for wages should be vouched with the help of ______a) Piece work statement b)Wage sheets c) Minute book d)Bank pass book 37. Receipt from debtors should be vouched with the help of______a) Counterfoil Receipts cash book b) Suppliers statement c) Sales Deeds d) General Ledger 38. Receipt from sale of investment should be vouched with the help of______a) Brokers Budget Notes b)Brokers Sold Notes c)Minute Book d)Inventory of investment 39. Purchases returns should be vouched with the help of______a) Bought Notes b)Credit Notes c)Goods inward Book d)Cash Book 40. Serial number of vouchers should be ______. (a) Colored (b) Continuous. (c) Even number (d) Odd number. UNIT III 41. Investigation is conducted______a. Regularly b.Quarterly c) As and when required d) fortnightly 42. Investigation is required when______a. Fraud is suspected in business b. On acquisition of running business c. All of them 43. Investigation of books of accounts and records is ______a. Not legally compulsory b. Compulsory c. Compulsory as per companies act d. Compulsory as Income Tax Act 44. Investigation is carries on behalf of ______a. Manager b. Employee c. Client d. On behalf of owner and third parties 45. Examination of accounting records undertaken for a special purpose is called______a. Auditing b. Internal check c. Investigation d. Internal control 46. The prime importance of investigation on behalf of an individual or firm intending to purchase an existing business is to ______a. Ascertain value of asset b. Ascertain the earning capacity of the concern c. Estimation of value of good will d. Extend of liabilities 47. The main objects of investigation is ______. a) to discover errors and frauds. b) to prevent errors and frauds. c) to verify statements. d) all the above. 48. Investigation is conducted by ______a) Cost Accountant b) Company Secretary c) Chartered Accountant d) Any person 49. Investigation implies systematic, critical and special examination of the records of a business for a______a) General purpose b) Unspecified purpose c) Specific purpose d) None of the above 50. Investigation seeks ______a) Conclusive evidence b) Corroborative evidence c) Both (a) and (b) above d) Persuasive evidence 51. ______is conducted even though the accounts have been audited. a) Investigation b) Auditing c) Verification d) Valuation 52. Under which of the following circumstances inspectors are appointed under companies act by central government. a) Company having share capital if at least 200 members or 1/10 th of total voting power to government b) Company having share capital if at least 250 members or 1/5 th of total voting power to government c) Company having share capital if at least 100 members / 1/10 th of total voting power to government d) Company having share capital if at least 200 members / 1/5th of total voting power to government 53. Choose from the following circumstance the registrar of joint stock company may apply to the central government for the appointment of Investigator a) If company fails to send any information required to furnish b) Document filed disclose an unsatisfactory state of affairs c) Affairs of the company have been carried on fraudulently. d) All of the above 54. Special resolution means ------a. 1/3 majority b. 2/3 majority c. ½ majority 55. Ordinary resolution means ------a. 1/3 majority b. 2/3 majority c. More than ½ 56. If inspector has no legal power to examine any person he may apply to ______which may order that person to appear before inspector a) Managing Director b) Court c) Registrar of company d) Secretary 57. If Central Government appoints an auditor he will be designated as ______a) Company Auditor b) Special Auditor c) Firm of auditors d) General Auditor 58. If any person refuses to furnish information to special auditor within prescribed time, he is punishable with a fine up to ______a) 5000 rupees b) 10000 rupees c) 7500 rupees d) 2500 rupees 59. The expenses incidental to special audit including remuneration of special auditor shall be determined by ______a) Central government b) Shareholders c) Court d) Managing director 60. 60.The Auditor appointed to conduct investigation, he should get instructions in writing regarding ______a) Scope of Enquiry b) Object of enquiry c) Time limit to submit report d) All of the above UNIT IV 61. Verification refers to ______a) Examination of journal and ledger b) Examination of vouchers related to assets c) Examining the physical existence and valuation of assets d) Calculation of value of assets 62. The Object of verification of assets______a) Physical verification of assets b) Checking value of assets c) Examining the authority of their acquisition d) All of the above 63. ______means proving the truth or confirmation . a. Verification b. Valuation c. Vouching d.Auditing 64. Stock should be valued at______a) Cost b) Market price c) Cost price or market price whichever is lower d) Cost less depreciation 65. Valuation of Fixed Assets is based on the concept a) Going concern b) Conservation c) Money measurement d) Dual aspect 66. Valuation means______a) Calculating value of assets b) Checking the value of assets c) Checking the physical existence of assets d) Examining the authenticity of assets 67. Fixed assets are valued at______a) Cost b) Market price c) Cost price or market price whichever is less d) Cost less depreciation 68. Floating assets are valued at a) Cost b) Market price c) Cost price or market price whichever is less d) Cost less depreciation 69. Outstanding expenses should be verified with the help of ______a) Cash book b) Balance book c) Journal proper d) None of the above 70. Book debts should be verified with the help of______a) Balance sheet b) Amount received from Debtors c) Debtors schedule d) Certificate from the management 71. Investments in hand should be verified with the help of______a) Schedule of investments b) Balance sheet c) Inspection of securities d) Certificate from the bank 72. Charging excessive provision for depreciation results in a. Less profit b. More profit c. No change in profit d. No change in loss 73. Dividend cannot be paid out of ______a) Capital profit b) Capital receipts c) Revenue receipts d) None of the above 74. Capital profit imply profit earned______a) Through business transaction b) From capital c) From sale of fixed assets d) From sale of current assets 75. Capital profits______a) Can be paid by way of dividends b) Cannot paid by way of dividends c) Can be paid by way of dividend under certain conditions d) None of the above 76. A company auditor should see that the dividend should be paid______a) After charging depreciation b) Without charging depreciation c) Out of capital d) None of the above 77. The asset which may or may not arise in future is ______a. Contingent asset b. Fixed asset c. Intangible asset d. Current Asset 78. ______is a part of profit which is set aside for any known or unknown contingency. a. Reserve b. Provision c. Depreciation d. Contingency fund 79. Verification of assets involves a critical examination of a. Ownership b. Existence c. All of these 80. ______are those fixed assets which cannot be seen or touched or felt. a).Intangible asset b) Wasting asset c) Fixed asset d) Floating asset UNIT V 81. Section 139(6) of the Companies Act, 2013 provides that first auditor of a company is appointed by the ______a) Shareholders b) Central Govt. c) Company Law Board d) Board of Directors 82. The first auditor of a company will hold office ______a) For a period of one year b) Till holding of statutory meeting c) Till the conclusion of first annual general meeting d) Till a new auditor is appointed 83. If no auditors are appointed or re-appointed at the annual general meeting, ______may appoint a person to fill the vacancy a) Board of directors b) company in general meeting c) Central Government d) Comptroller and Auditor General of India (C&AG) 84. The auditor appointed in the casual vacancy holds office till the conclusion of the next___ a) Annual general meeting b) Board meeting c) Extraordinary general meeting d) Financial year. 85. In case the Board of Directors fails to appoint the first auditors within one month of its incorporation the ------may appoint the first auditors. a) Chairman of the company b) Managing dorectors c) Company in general meeting d) Central government 86. An auditor in a casual vacancy is appointed by the ______a) Board of Directors b) Shareholders c) Central Government d) Company Law board 87. Examples of casual vacancy are vacancy arising due to ______a) Resignation of the auditor b) Death of the auditor c) Disqualification of an auditor d) All of the above 88. If an auditor is not appointed at annual general meeting, he is appointed by the ______a) The Central Government b) Board of Directors c) Shareholders d) Company Law board 89. A vacancy caused by resignation of the auditor is filled by______a) Board of Directors b) At the general meeting of shareholders c) By the Central Government d) By the Company Law board 90. The auditor of a compay shall have right of access , at all times, to the books, accounts and vouchers of the company,whether kept at the______a) Regisered office of the company b) Head office of the company c) Corporate office of the company d) Anywhere 91. A government Co. auditor may be appointed by the ______a) C & A – G b) Shareholders c) Central Government d) None of the above 92. Remuneration of a company auditor is fixed by the______a) Shareholders b) Board of Directors c) Central Government d) Appointing authority 93. A company auditor, in general has to submit his report to ______a) Shareholders b) Board of Directors c) Central Government d) C & A – G 94. Share premium account should be shown in the Balance sheet under______a) Paid-up capital b) Subscribed capital c) Reserves & surplus d) Reserved capital 95. Amount of share premium may be utilized for ______a) Payment of dividend b) Writing of preliminary expenses c) Routine expenses d) Purchase of fixed assets 96. ------is the medium through which an auditor expresses his opinion on the financial statements a)Auditors observation b)Auditors comments c)Auditors views d)Auditors report 97. In his report, the auditor gives his______a) Judgment b) Opinion c) Guarantee to correctness of accounts d) True state of affairs 98. The auditor’s opinion may be of the following types______a)Unqualified opinion b)Adverse opinion c)Qualified opinion, d)Disclimer of opinion e) Any of the above 99. Civil liability of an auditor implies liability for ______a) Misappropriation of cash b) Misappropriation of goods c) Fraud d) Misfeasance 100. The meeting held by the company with in a period of not less than one month and not more than 6 months is called ______a. Statutory b. Annual c. General d. Interim meeting UNIT I 1. What is audit. Audit is an examination of the books, accounts and vouchers of a business 2. What is audit programme ? The written plans prepared by an auditor to conduct the audit more efficiently and effectively. 3. Tell about audit working papers Audit working papers are used to document the information gathered during an audit. 4. What is audit note book Audit note book contains information regarding day-to-day work performed by the audit staff on any particular date. 5. What is Book Keeping? Book•Keeping is the art of recording the business transactions in the books of original entry. 6. Who is an Auditor ? The person who checks the accuracy of the books of accounts and expresses an opinion on the financial statements of the business concern is called as an Auditor. 7. What is an Error? Errors are unintentional mistakes in the books of accounts. 8. What is Fraud? Fraud is False representation or entries made intentionally in the books to defraud somebody. 9. What is External Audit ? Audit which is undertaken by an individual person who is appointed by the shareholders and not by the management is External Audit. 10. What is Interim Audit ? Audit conducted in between two annual audits is called as Interim audit

UNIT II

11. Why internal audit is conducted? Internal audit evaluate and improve the effectiveness of governance, risk management and control processes. 12. Find the meaning of internal check. The work of one employee is automatically checked against the work of another for detection of errors and irregularities. 13. Show the meaning of voucher Voucher is a documentary evidence in support of a transaction. It may be receipt or invoice or bill etc., 14. Tell the meaning of Vouching? The process of examining the documentary evidence to ascertain the accuracy and authenticity of entries in the books of accounts by the auditor is called as‘Vouching’. 15. What is Auditing in Computerised Environment? Auditing in a computerised environment is EDP (Electronic Data Processing) audit which is processing of data by the computer and its program in an environment involving electronic communication. 16. What are the two types of Voucher ? a) Primary Voucher b) Collateral Voucher 17. What is the main objective of Vouching trading transaction? To detect misappropriation of goods 18. What are the Books and Documents to be Vouched in case of credit purchase a) Purchase Invoice, (b) Purchase Book, (c) Suppliers ledger account, (d) Gatekeepers Goods Inward Book. 19. Which is a relevant voucher for vouching of ‘Sales Return’? Debit Note issued by opposite party 20. What are the documents to be vouched in wage payment? Attendance register, Time or piece records, Leave register, Overtime register, Wage sheet, Bank statement, Register of casual labourers.

UNIT III 21. What is investigation? An inquiry is made into the accounts of the business for special purpose it is called investigation. 22. State any one objectives of Investigation To ascertain the financial position and the earning capacity of the concern. 23. Who appoint Investigator? An investigator is appointed by the outsider. 24. How much period does investigation cover? It may cover Period extending over three to seven years. 25. When does Investigation carried on in a company? It may be conducted at any time in case of suspicion about any transaction. 26. What is the qualification of an Investigator? Even an employee preferably a chartered accountant may be appointed as investigator. 27. How is the nature of evidence obtained from Investigation Process? The nature of evidence obtained from Investigation process is conclusive. 28. What is the scope of Investigation? The Scope of the Investigation is limited as it attempts to answer only those questions that are asked in the engagement letter 29. List any one duty of Investigator a) Any loss caused by negligence on the part of director 30. Name any one power of Investigator a) Examine on oath of any officer, employee or agent of related body corporate UNIT IV 31. What is verification The verification of assets implies an inquiry into the value, ownership and title, existence and possession, the presence of any charge on the assets.” 32. What is the purpose of verification? The purpose of verification is to check existence, ownership and possession of assets. 33. What is the Purpose of valuation ? The purpose of valuation is to determine the proper values of assets as per generally accepted principles. 34. How is Fixed asset valued? The fixed assets are to be shown at cost less depreciation to date. 35. What are the methods of valuation of stock? FIFO,LIFO,Weighted average cost methods 36. Define depreciation Permanent decrease in the value of an asset through wear & tear, in use or in passage of time 37. What is reserve? A reserve is a part of profit set aside for any known or unknown contingencies, liabilities, losses or diminution in the value of an asset in future 38. What is provision? The amount set aside out of profits or other surpluses to meet specific requirements or commitments. 39. List any two deferred revenue expenditure Preliminary expenses, Discount on issue of shares, 40. Name the capital expenditure and revenue expenditure Capital Expenditure: 1) Purchase of factory and building. Revenue expenditure: 1) Cost of merchandise bought for resale UNIT V 41. Who appoints first auditor of a joint stock company? Board of Directors within 30 days of incorporation. 42. What is casual vacancy? Casual vacancy means vacancy created by an auditor who to ceases to act after being validly appointed and acceptance of appointment. 43. Tell about removal of auditor An auditor of a company may be removed by resolution of the company at a general meeting 44. State any two criminal liabilities of a company auditor · For misstatement in prospectus (Sec 63) · Penalty for non compliance by Auditor (Sec.233) 45. Tell about audit report An audit report is a written opinion of an auditor regarding an entity's financial statements. 46. Who appoints internal auditor? Management appoints internal auditor of a company 47. Who has the authority to remove the first auditor before the expiry of the term of office? The shareholder in a general meeting. 48. How much maximum number of audit assignment an auditor can accept in limited companies? 20 numbers 49. What is financial statement ? a) Trading profit and loss accounts,balance sheet b) Statement of changes in financial position c) Cash flow statements 50. What is misfeasance ? The term 'Misfeasance' means 'breach of duty or trust'. UNIT I

1. Examine the advantages of Audit Programme 2. Prepare the benefits of Audit 3. Interpret the Qualification and qualities of an auditor of a limited company 4. Predict the advantages of audit 5. Find the contents of Working papers

UNIT II

6. Write the meaning of Internal check and its criteria for good internal check 7. Assess the Duty of auditor in vouching the credit sales and purchase 8. Show the duties of auditor regarding Outstanding Assets 9. Sketch the duties of auditors regarding outstanding Liabilities 10. Relate Capital and revenue expenditure

UNIT III

11. Point out the meaning of Investigation 12. Sketch the points to keep in mind by investigator while conducting investigation. 13. Prepare the duties of Investigator 14. Intrepret the powers of Investigator 15. Prepare the computer assisted auditing technique

UNIT IV

16. Point out the importance concepts to be considered while verification of asset 17. Sketch the auditor’s position in different type of Investment 18. Interpret the different methods of valuation of stock 19. Sketch the auditors duty regarding Sinking fund 20. Predict the auditor’s duty in connection with the reserve Capital reserve and general reserve UNIT V 21. Find the different Kinds of audit report 22. Show how can an auditor be removed from a limited company 23. Predict the procedure of Audit of issue of share capital 24. Demonstrate the procedure of Audit of share transfer and transmission of shares 25. Sketch the remuneration and expenses of an Auditor UNIT I

1. Examine the Objectives of auditing 2. Classify the different types of audit 3. Determine the contents of Audit note book 4. Difference Internal audit and Statutory Audit 5. Explain about Audit Plan

UNIT II

6. Analyze the Duty of auditor in vouching the debit side of cash book 7. Analyze the Duty of auditor in vouching the Credit side of cash book 8. Determine the Duty of auditor in vouching the Trading transactions 9. Distinguish between Internal Audit and Statutory Audit 10. Outline the concept of Internal Control

UNIT III

11. Difference between Auditing and Investigation 12. Identify the Objectives of Investigations 13. Point out the provisions of Investigation under companies act 14. Outline the Auditing in computerized environment 15. Examine the powers of Investigator

UNIT IV

16. Identify the duty of auditor regarding verification and valuation of asset 17. Identify the duty of auditor regarding verification and valuation of liabilities 18. Categorize the Methods of providing depreciation 19. Compare Reserve and provision 20. Examine the object of creating Secret reserve and auditors duty with regard to secret reserve

UNIT V

21. Examine the contents of Audit report. 22. Examine how an auditor is Appointment in a limited company 23. Categorize the Rights of an auditor 24. Explain the powers of an auditor. 25. Identify the Liability of an auditor under companies act

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