ACC311-OLD MIDTERM PAPER

ACC311-MIDTERM PAPER SOLVED BY AHSAN


Question:
Which one of the following persons are responsible for the preparation of Audit
Engagement later?
Options: Auditor Client
Company registrar

Company secretary

Question:
Who is responsible for designing and preparing the financial statements?
Options: Auditor Management
Accountant



Company secretary




Question:
Which one of the following is the method of assessing the internal control system of an
entity?
Options:

Audit procedures Audit evidence Compliance audit Technical analysis



Question:
The purpose of engagement letter includes the following EXCEPT:
Options:



To defines the auditorâ™s responsibilities clearly

To minimize misunderstandings between the client and auditors

To educate the cliet

To help the auditor in preparing audit report



Question:
A manufacturing company wants to hire external auditors who examine the activities
operations procedures and processes of each department of the company. The company follows the local and international laws rules ad regulations and also has set standards for the efficiency and effectiveness. The company shall have to provide the access of all kind of operational information that will be required to the auditors as audit evidences. Considering the above situation select the most suitable type of audit which the company should opt?
Options:

Compliance audit Operational audit Technology audit Financial audit


Question:
Which one of the following is considered as the formal opinion or disclaimer thereof
issued by an independent auditor as a result of audit or evaluation performed on a legal entity?
Options:

Financial report Financial statement Director’s report Auditor's report






Question:
Which of the following statements is true?

Options:

The auditing profession is unregulated

The auditing profession is regulated only by its own professional body


Outside bodies sometimes become involved in the regulation of the audit profession


The auditing profession is regulated only by the government



Question:
Which one of the following primary assertions is satisfied when an auditor ensures that
there are no unrecorded assets liabilities transactions or events or undisclosed items in the
client’s financial records?
Options: Valuation Completeness Existence
Rights and obligations



Question:
Internal control is primarily established within a company to do which of the following?
Options:

To prevent fraud in the company affairs

To provide reasonable assurance that the company's ob jectives will be achieved

To catch all errors that may occur in the company

To aid in the effective auditing of the company



Fixation of remuneration of auditors can be determined by the following authorities
EXCEPT: (Companies Ordinance 1984)
Options:

Directors

Company secretary Commission Members


Question:
A leather goods manufacturing company has started its operations in year 2001. After
five years of conducting successful business it has become a listed company recently. Now the company is required to hire its first auditors but neither the directors nor the members could appoint the auditors during the past 4 months since the incorporation of


the company. Select among the following authorities who can appoint the auditors in this situation? (Companies Ordinance 1984)
Options:

Company secretary Company registrar Commission
Institute of Chartered Accountants of Pakistan (ICAP)



Question:
A company has hired auditors who have performed the audit process in accordance with
the auditing standards but they fail to present its report. According to the Company law
1984 the auditors shall be liable for which one of the following liabilities?
Options:

Criminal liability Liability for misfeasance Liability for negligence Accounting liability




Question:
DBMSes & Databa ses are same things.

Options:        false        true



Question:
Audit sampling conducted
Options:

On selected number of items

On Whole population On specific no of items All of the given options


Question:
Advantages of Audit Sampling
Options:

Economical


Time Saving

More Practical

All of the given options



Question:
Which of the following is the component of audit risk?
Options:

Inherent risk Control risk Detection risk
All of the given options




Question:
Which of the following is not needed to be verified at the time of verification of Equity?
Options:

Share capital’s classification

Movement in share capital

Preliminary expenses are properly write off

Movements in reserves

*
Question:
Which of the following is needed to be verified at the time of verification of Account
Balances?
Options:

Look over any significant reconciling items of an unusual nature

Inspect about outstanding stale cheques

Acquire direct bank confirmation

All of the given options




Question:
Tolerable error and sample size have

Options:

Homogeneous characteristics

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