Senior Auditor MCQs

By: Prof. Fazal Rehman Shamil

Senior Auditor FPSC Solved MCQs.

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

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

(B). His opinion is no guarantee to the future viability of the business

(C). He is responsible for the detection and prevention of frauds and errors in financial statements

(D). He should examine whether the recognized accounting principle has been consistently

 

A sale Rs. 50.000 to Shahid was entered as a sale to Saddam. This is an example of

(A). Error of commission

(B). Error of omission

(C). Error of compensating

(D). Error of principle

 

The main object of an audit is

(A). Expression of opinion

(B). Detection and Prevention of fraud and error

(C). Both A and B

(D). Depends on the type of audit.

 

The title of A/6sued by Council of ICAI is

(A). Objective and Scope of the Financial Statements

(B). Objective and Scope of the Audit of Financial Statements

(C). Objective and Scope of Business of an Entity

(D). Objective and Scope of Financial Statements Audit

 

How many principles are listed in AAS] which govern an auditor’s profession / Obligation?

(A). Nine

(B). Fourteen

(C). Seven

(D). Eight

 

Both auditing and accounting are concerned with financial statements Which of the following

(A). Auditing uses the theory of evidence to verify the financial information made available by Accountancy

(B). Auditing lends credibility dimension and quality dimension to the financial statements prepared by the accountant.

(C). The auditor should have through knowledge of accounting concepts and convention to enable him to express an opinion on financial statements

(D). All of the above.

 

The risk of management fraud increases in the presence of :

(A). Frequent changes in supplies

(B). The improved internal control system

(C). substantial increases in sales

(D). Management incentive system based on sales done in a quarter

 

Auditing standards differ from audit procedures in that procedures relate

(A). Audit assumptions

(B). Acts to be performed

(C). Quality criterion

(D). Methods of work

 

As per AAS4 if the auditor detects an error then

(A). He should inform the management. B. He should communicate it to the management if it is material

(B). The Auditor should ensure financial statements are adjusted for deducted errors. D. Both B and C are right

 

Which of the following is not a limitation of audit as per AAS4?

(A). The objectivity of auditor’s judgment —

(B). Select testing

(C). persuasiveness of evidence

(D). Limitations of the internal control system.

 

The process of allocating the cost of a tangible fixed asset over its useful life is called.

(A). Depletion

(B). Amortization

(C). Allocation of cost

(D). Depreciation

 

Expenditure for a plant asset that benefits more than one accounting period

(A). Plant expenditure

(B). Direct expenditure

(C). Indirect expenditure

(D). Capital Expenditure

 

The expense resulting from the using up of a natural resource

(A). Depletion

(B). Amortization

(C). Write of expense

(D). Depreciation

 

From the given particulars, what id the depreciation rate under the straight-line method of depreciation:

Cost of Asset = Rs. 2,000 Residual Value = Rs. 400 Useful Life = 4 years

(A). 20 %

(B). 30%

(C). 25%

(D). 33%

 

The periodic write-off of the cost of an intangible asset is called

(A). Depletion

(B). Amortization

(C). Allocation of cost

(D). Depreciation

 

The amount that an asset is expected to be worth at the end of its productive life is called

(A). Sales price

(B). Cost price

(C). Depreciable amount

(D). Salvage value

 

The estimated value of an asset after the expiry of its useful life is called as:

(A). Written Down value

(B). Salvage value

(C). Accumulated depreciation

(D). Sales value

 

All characteristics of debenture except which one?

(A). Liability

(B). Preference in payment

(C). Fixed interest

(D). Received dividend

 

Acknowledgment of debt is called

(A). Debenture

(B). Bond

(C). Share

(D). Both A and B

 

If debenture issued to the vendor then debit to

(A). Cash

(B). Goods

(C). Asset

(D). Vendor’s name

 

Own debenture purchase from open market for

(A). Investment

(B). Immediate cancellation

(C). Both A and B

(D). None of these

 

If interest include in the purchasing price of debenture then interest called

(A). Simple interest

(B). Compound interest

(C). Cum interest

(D). Ex-interest

 

Provision for tax is a

(A). Current asset

(B). Fixed Assets

(C). Current Liability

(D). long term liability

 

Incorporation certificate issued by

(A). Registrar

(B). Stock exchange

(C). SECP

(D). None of the above

 

Balance Sheet shows

(A). Equivalency

(B). Financial result

(C). Financial position

(D). All of the above

 

Show how net profit has been distributed in

(A). Trading Accounting

(B). Profit and loss account

(C). Retained earnings statement

(D). Balance sheet

 

Preliminary expense written off is a

(A). Direct expense

(B). Indirect expenses

(C). Differed cost

(D).Balance sheet

 

In shareholder may include

(A). Promoters

(B). Directors

(C). Underwriters

(D). All of the above

 

In the source of bonus include

(A). General reserve

(B). Retained earnings

(C). Directors

(D). All of the above

 

An option to buy a share at a specific price during the specified period is called

(A). Right

(B). Share

(C). Bonus

(D). None of the above

 

Right share always issued on

(A). Market price B. Premium

(B). Discount

(C). Per value

 

On the basis of the residual reserve test after the proposed bonus issue the residual reserve should be at least

(A). 15%

(B). 20%

(C). 25%

(D). 30%

 

Entry for the declaration of bonus

(A). Bonus to shareholder Dr __share capital Cr

(B). Cash Dr __share capital Cr

(C). Accounts receivable Dr __share capital Cr

(D).source of bonus Dr __bonus to shareholder Dr

 

No. of bonus share to issued calculated as:-

(A). No. of bonus share * issued price

(B). Issued capital

(C). Issued capital *

(D).None of the above

 

Fpsc Senior Auditor past papers MCQs from FPSC Senior Auditor exam 2017.