A
Which Standard on Auditing lays down the overall objectives of an independent auditor and explains the conduct of an audit in accordance with SAs?
A. SA 210
B. SA 200
C. SA 220
D. SA 230
Answer: B. SA 200
An Engagement Letter is generally issued:
A. After completion of the audit.
B. Before the audit begins.
C. Along with the audit report.
D. After preparation of financial statements.
Answer: B. Before the audit begins.
Professional skepticism requires the auditor to:
A. Assume management is dishonest.
B. Assume management is always truthful.
C. Maintain a questioning mind throughout the audit.
D. Avoid relying on any audit evidence.
Answer: C Maintain a questioning mind throughout the audit.
Which Standard on Auditing specifically deals with agreeing on the terms of an audit engagement?
A. SA 210
B. SA 240
C. SA 250
D. SA 300
Answer: A. SA 210
The term "audit" is derived from the ______ word "Audire," which means to hear
A. Greek
B.Latin
C. Persian
D. Avestan
Answer: B.Latin
Who is widely recognized as the "Father of Accounting" for his contribution to the documentation of the double-entry bookkeeping system in 1494?
A. Benedetto Cotrugli
B. Luca Pacioli
C. Francesco Datini
D. Leonardo Fibonacci
Answer: B. Luca Pacioli
Which risk can be directly reduced by the auditor through better audit procedures?
A. Inherent Risk
B. Business Risk
C. Detection Risk
D. Control Risk
Answer: C. Detection Risk
Materiality is mainly discussed under which Standard on Auditing?
A. SA 315
B. SA 320
C. SA 330
D. SA 450
Answer: B. SA 320
Who became India's first woman Chartered Accountant?
A. Shanti Lal Shah
B. R. Sivabhogam
C. Prema Jayakumar
D. Naina Lal Kidwai
Answer: B. R. Sivabhogam
Which ethical principle requires an auditor to avoid bias and conflicts of interest?
A. Integrity
B. Confidentiality
C. Objectivity
D. Professional Competence
Answer: C. Objectivity
Which one of the following is least likely to influence materiality?
A. Nature of the item.
B. Size of the misstatement.
C. Needs of users of financial statements.
D. Auditor's favourite accounting software.
Answer: D Auditor's favourite accounting software.
Who was the first Indian Chartered Accountant to qualify after the Chartered Accountants Act, 1949 came into force?
A. Gopaldas Padamsey Kapadia
B. R. K. M. Lall
C. G. P. Kapadia
D. T. N. Manoharan
Answer: C. G. P. Kapadia
Which one of the following is the fundamental principle that requires an auditor to possess and maintain professional knowledge and skill?
A. Integrity
B. Objectivity
C. Professional Competence and Due Care
D. Confidentiality
Answer: C. Professional Competence and Due Care
Which of the following situations represents the highest level of Inherent Risk?
A. Cash transactions in a retail store.
B. Fixed deposits in a nationalized bank.
C. Land purchased 20 years ago.
D. Government securities held to maturity.
Answer: A. Cash transactions in a retail store.
Which SA requires the auditor to identify and assess the risks of material misstatement?
A. SA 240
B. SA 250
C. SA 315
D. SA 520
Answer: C. SA 315
Which statement is correct regarding Audit Planning and Audit Programme?
A. Audit Programme is prepared before the Audit Plan.
B. Audit Strategy provides the broad direction, while the Audit Programme contains detailed procedures.
C. Audit Strategy and Audit Programme mean the same thing.
D. Audit Plan is prepared after the audit report.
Answer: B. Audit Strategy provides the broad direction, while the Audit Programme contains detailed procedures.
Which of the following best reflects the principle of "Objectivity" under the ICAI Code of Ethics?
A. Maintaining secrecy of all client information, even when disclosure is legally required.
B. Performing only those assignments in which the auditor possesses adequate knowledge and skill.
C. Avoiding bias, conflict of interest, or undue influence while forming professional judgments.
D. Completing an audit within the agreed budget regardless of audit evidence obtained.
Answer: C. Avoiding bias, conflict of interest, or undue influence while forming professional judgments.
Which COSO component ensures that employees receive relevant information in time to perform their responsibilities?
A. Monitoring
B. Information and Communication
C. Risk Assessment
D. Control Activities
Answer: B Information and Communication
Which of the following best explains why absolute assurance cannot be provided in an audit?
A. Auditors do not examine every transaction.
B. Financial statements are always inaccurate.
C. Companies do not maintain records.
D. Internal controls eliminate all risks.
Answer: A Auditors do not examine every transaction.
In which year was the Institute of Chartered Accountants of India (ICAI) established?
A. 1947
B. 1948
C. 1949
D. 1950
Answer: C. 1949
Which of the following best distinguishes auditing from accounting?
A. Accounting verifies financial statements, whereas auditing prepares them.
B. Accounting records financial transactions, whereas auditing examines and expresses an opinion on them.
C. Accounting is mandatory, whereas auditing is optional in all cases.
D. Accounting is governed only by Companies Act, whereas auditing is governed only by Income Tax Act.
Answer: B
Approximately in which century is the Arthashastra believed to have been written?
A. 8th Century CE
B. 4th Century BCE
C. 2nd Century CE
D. 10th Century CE
Answer: B 4th Century BCE
The word "Ethics" is derived from the Greek word:
A. Ethnos (Nation)
B. Ethos Custom)
C. Ethica (Law)
D. Etheon (Justice)
Answer: B. Ethos Custom
The word "Salary" is derived from the Latin word Salarium, which originally referred to:
A. Gold
B. Salt Allowance
C. Tax
D. Trade
Answer: B. Salt Allowance
Which country is regarded as the birthplace of modern auditing?
A. France
B. England
C. Italy
D. Germany
Answer: B England