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: Independent audit enhances
A) Tax avoidance
B) Customer retention
C) Financial transparency
D) Management authority
✅ Correct Answer: C
Explanation: Independence helps auditors provide unbiased reports, improving financial transparency.
Q: Qualified audit report reflects
A) Major fraud
B) Full compliance
C) Partial non-compliance
D) No evidence
✅ Correct Answer: C
Explanation: Qualified reports are issued when certain areas do not fully comply with standards.
Q: Audit documentation must be retained for
A) One year
B) Six months
C) Seven years
D) Until payment is made
✅ Correct Answer: C
Explanation: Audit working papers must be maintained for a standard retention period, usually seven years.
Q: Risk of material misstatement is minimized by
A) Legal action
B) Internal audit
C) Professional skepticism
D) Auditor independence
✅ Correct Answer: C
Explanation: Maintaining skepticism helps auditors objectively assess potential risks.
Q: Physical verification of inventory includes
A) Comparing books
B) Confirming suppliers
C) Reading invoices
D) Counting stock
✅ Correct Answer: D
Explanation: Actual counting is necessary to verify the existence and value of inventory.