Auditing MCQs
Auditing MCQs cover audits, controls, standards, planning, procedures, risks, and reporting—ideal for ACCA, CA, ICMA, B.Com, MBA, and finance exams, ensuring conceptual clarity and practical application for academic and professional success.
Q: Third-party confirmations help verify
A) Cash flow
B) Balances and agreements
C) Company policies
D) Employee details
✅ Correct Answer: B
Explanation: Confirmations validate account balances with external parties such as banks or debtors.
Q: Substantive procedures are intended to detect
A) Material misstatements
B) Control weaknesses
C) Non-compliance
D) Policy gaps
✅ Correct Answer: A
Explanation: These procedures gather evidence to detect misstatements in financial records.
Q: Audit evidence must be
A) Oral only
B) Reliable and sufficient
C) Hard copy
D) Given by client
✅ Correct Answer: B
Explanation: Valid audit conclusions depend on obtaining sufficient and appropriate audit evidence.
Q: Management representation letter is obtained to
A) Avoid legal action
B) Disclose tax payments
C) Confirm audit fees
D) Acknowledge responsibilities
✅ Correct Answer: D
Explanation: This letter confirms management’s responsibility for financial information.
Q: Going concern assumption is verified to assess
A) Business continuity
B) Tax compliance
C) Profitability
D) Legal standing
✅ Correct Answer: A
Explanation: The auditor checks whether the business can continue operations in the foreseeable future.