05-02-2010, 04:56 AM
ACC311- Fundamentals of Auditing
FINALTERM EXAMINATION
Spring 2009
ACC311- Fundamentals of Auditing (Session - 1)
Marks: 81
Question No: 1 ( Marks: 1 ) - Please choose one
Which one of the following is an objective of the internal audit?
To report on financial statements
To check accounting system and internal control are operating efficiently
To determine the accuracy of financial statement values and disclosures
To establish a control system in the company
Question No: 2 ( Marks: 1 ) - Please choose one
Which one of the following statements is NOT correct in respect of the internal auditor?
The scope of audit performed by internal auditors is primarily in respect of financial
report audits
An internal auditor does not require a license to practice
Internal auditors are usually employed by companies and government units
Primary responsibility of the internal auditor is to the board of directors
Question No: 3 ( Marks: 1 ) - Please choose one
After how many days the Securities and Exchange Commission
may appoint the auditors, if the
Directors of a company could not appoint the auditors to fill casual vacancy? (Companies Ordinance,
1984)
30 days
60 days
80 days
120 days
Question No: 4 ( Marks: 1 ) - Please choose one
Suppose that during audit of a company, an auditor accepted the schedule of bad debts furnished
by the client, though it was apparent that debts were not recoverable. The auditor shall be held
liable for which one of the following liabilities?
Liability for negligence
Liability for misfeasance
Criminal liability
Personal liability
Question No: 5 ( Marks: 1 ) - Please choose one
The books of accounts of a company should be kept at which one of the following offices?
(Companies Ordinance, 1984)
Registered office of the company
Accounts office of the company
Record office of the company
Registrar office
Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following is one of the most fundamental and effective internal controls?
Increased use of computers for recording accounting transactions
Increased reliance on internal auditors to monitor accounting systems
Segregation of incompatible duties across several people
Having internal auditors report only to the Board of Directors
Question No: 7 ( Marks: 1 ) - Please choose one
Which of the following is NOT a major component of an internal control system?
Risk assessment
Staffing
Control procedures/activities
Information and communication system
Question No: 8 ( Marks: 1 ) - Please choose one
An audit firm audited a Leather Manufacturing company and presented its report addressed to the
management. They found significant material misstatements in the company s internal controls
system. They strongly recommended that there should be sufficient controls in existence to ensure
management can effectively control the business operations. In your opinion, auditors are
emphasizing on which one of the following categories of SOAP MAPS?
Authorization
Management and Monitoring
Arithmetic and Accounting
Segregation of duties
Question No: 9 ( Marks: 1 ) - Please choose one
Which of the following statements best describes the purpose of an internal control questionnaire
(ICQ)?
An internal control questionnaire is a series of questions regarding accounting and control
policies and procedures that the auditor considers necessary to prevent all misstatements in the
financial report
An internal control questionnaire is a series of questions regarding accounting and control
policies and procedures that the auditor considers necessary to prevent material misstatements in
the financial report
An internal control questionnaire is a series of questions regarding accounting and control
policies and procedures that the auditor considers necessary to detect material misstatements in
the financial report
An internal control questionnaire is a series of questions prepared by the entity about the
entity's accounting and control policies and procedures for which the entity seeks guidance on
from the auditor in order to detect material misstatements in the financial report
Question No: 10 ( Marks: 1 ) - Please choose one
A Beverages company is being audited by an audit firm. Audit procedures are being undertaken
in all of its departments. During this, the audit team has to spend more time on physical
FINALTERM EXAMINATION
Spring 2009
ACC311- Fundamentals of Auditing (Session - 1)
Marks: 81
Question No: 1 ( Marks: 1 ) - Please choose one
Which one of the following is an objective of the internal audit?
To report on financial statements
To check accounting system and internal control are operating efficiently
To determine the accuracy of financial statement values and disclosures
To establish a control system in the company
Question No: 2 ( Marks: 1 ) - Please choose one
Which one of the following statements is NOT correct in respect of the internal auditor?
The scope of audit performed by internal auditors is primarily in respect of financial
report audits
An internal auditor does not require a license to practice
Internal auditors are usually employed by companies and government units
Primary responsibility of the internal auditor is to the board of directors
Question No: 3 ( Marks: 1 ) - Please choose one
After how many days the Securities and Exchange Commission
may appoint the auditors, if the
Directors of a company could not appoint the auditors to fill casual vacancy? (Companies Ordinance,
1984)
30 days
60 days
80 days
120 days
Question No: 4 ( Marks: 1 ) - Please choose one
Suppose that during audit of a company, an auditor accepted the schedule of bad debts furnished
by the client, though it was apparent that debts were not recoverable. The auditor shall be held
liable for which one of the following liabilities?
Liability for negligence
Liability for misfeasance
Criminal liability
Personal liability
Question No: 5 ( Marks: 1 ) - Please choose one
The books of accounts of a company should be kept at which one of the following offices?
(Companies Ordinance, 1984)
Registered office of the company
Accounts office of the company
Record office of the company
Registrar office
Question No: 6 ( Marks: 1 ) - Please choose one
Which of the following is one of the most fundamental and effective internal controls?
Increased use of computers for recording accounting transactions
Increased reliance on internal auditors to monitor accounting systems
Segregation of incompatible duties across several people
Having internal auditors report only to the Board of Directors
Question No: 7 ( Marks: 1 ) - Please choose one
Which of the following is NOT a major component of an internal control system?
Risk assessment
Staffing
Control procedures/activities
Information and communication system
Question No: 8 ( Marks: 1 ) - Please choose one
An audit firm audited a Leather Manufacturing company and presented its report addressed to the
management. They found significant material misstatements in the company s internal controls
system. They strongly recommended that there should be sufficient controls in existence to ensure
management can effectively control the business operations. In your opinion, auditors are
emphasizing on which one of the following categories of SOAP MAPS?
Authorization
Management and Monitoring
Arithmetic and Accounting
Segregation of duties
Question No: 9 ( Marks: 1 ) - Please choose one
Which of the following statements best describes the purpose of an internal control questionnaire
(ICQ)?
An internal control questionnaire is a series of questions regarding accounting and control
policies and procedures that the auditor considers necessary to prevent all misstatements in the
financial report
An internal control questionnaire is a series of questions regarding accounting and control
policies and procedures that the auditor considers necessary to prevent material misstatements in
the financial report
An internal control questionnaire is a series of questions regarding accounting and control
policies and procedures that the auditor considers necessary to detect material misstatements in
the financial report
An internal control questionnaire is a series of questions prepared by the entity about the
entity's accounting and control policies and procedures for which the entity seeks guidance on
from the auditor in order to detect material misstatements in the financial report
Question No: 10 ( Marks: 1 ) - Please choose one
A Beverages company is being audited by an audit firm. Audit procedures are being undertaken
in all of its departments. During this, the audit team has to spend more time on physical