K.S.

R COLLEGE OF ARTS AND SCIENCE FOR

WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

SCHOOL OF COMMERECE
QUESRTION BANK

FACULTY NAME Mr.S.RAJAKUMAR

CLASS III BCOM (CA) PERIOD: JUNE-DEC-2023
SUBJECT TITLE AUDITING SEMESTER ODD SEMESTER
SUBJECT CODE BATCH 2021-2024

UNIT-I

ONE MARK

1. Which country gave recognition to Auditing first in the Companies Act –

(a) America
(b) Britain
(c) India
(d) England (✓)
2. Auditing is derived from the Latin Word –
(a) Audire (✓)
(b) Auditor
(c) Order
(d) None of these
3. When the audit of Company Accounts was made compulsory in India.
(a) 1894
(b) 1914 (✓)
(c) 1947
(d) 1952
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

4. When the Chartered Accountant Act of India was made:

a) 1947
(b) 1949 (✓)
(c) 1956
(d) 1965

5. When Institute of Chartered Accountant of India established?

(a) 1 July, 1949 (✓)
(b) 1 July, 1950
(c) 1 July, 1951
(d) 1 July, 1957
6. Auditing is –
(a) An art
(b) A science
(c) Above both (a) and (b) (✓)
(d) None of these
7. Who can be an Auditor?
(a) Commerce Graduate
(b) Law Graduate
(c) Cost Accountant
(d) Chartered Accountant (✓)
8. The function of an Auditor is –
(a) To examine the arithmetical accuracy of accounts
(b) To detect and prevent the errors (c) To detect and prevent the frauds
(d) All the above (✓)
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

9. An auditor is like a ………. dog.

(a) Pet
(b) Watch (✓)
(c) Blood hand
(d) Thirsty
10. Chartered Accountants are –
(a) Amateur auditor
(b) Government auditor
(c) Professional auditor (✓)
(d) None of these.
11. An auditor should not be
(a) Tactful
(b) Honest
(c) Suspicious (✓)
(d) Patient
12. ‘Auditing Practice Committee’ is now renamed –
(a) Auditing and Assurance Standards Board (✓)
(b) Auditing Board
(c) Auditing Practices Standard Board
(d) None of these
13. Number of standards issued by Institute of Chartered Accountant of India is –
(a) 20
(b) 25
(c) 35 (✓)
(d) 40
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

14. Head office of ICAI is situated at –

(a) Mumbai
(b) Chennai
c) Delhi (✓)
(d) Kolkatta
15. International Federation of Accountants (IFAC) was set up in –
(a) 1978
(c) 1967
(b) 1977 (✓)
(d) 1957
16. Auditing Practicing Committee (APC) was set-up in –
(a) 1992
(b) 1982 (✓)
(c) 1972
(d) 1974
17. Auditing Practicing Committee (APC) was established by
(a) Central Government
(b) ICAI (✓)
(c) Chartered Accountants
(d) None of these
18. Auditing is related with –
(a) Accountancy
(b) Economics
(c) Ethics
(d) All above (✓)
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

19. Auditor examines and verifies the –

(a) Costing records and cost statements.
(b) Financial records (✓)
(c) Correspondence records
(d) Managers records
20. Under which Act Audit is compulsory
(a) Partnership Act, 1932
(b) Indian Companies Act, 1956 (✓)
(c) Both (a) and (b)
(d) None of the above
21. Prevention of fraud is……….. Object of auditing.
(a) Primacy
(b) Subsidiary (✓)
(c) Social
(d) None of these
22. Where Book-keeping ends, there……….
(a) Auditing begins
(b) Accountancy begins (✓)
(c) Investigation begins
(d) None of these
23. Auditing beings where……….
(a) Book-keeping ends
(b) Accountancy ends (✓)
(c) Investigation ends
(d) Vouching ends
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

24. In an Auditor the knowledge of Book-keeping and Accountancy is –

(a) Acquired Knowledge (✓)
b) Born Qualities
(c) Original Qualities
(d) All the above
25. To examine the books of accounts is the ………. object of auditing –
(a) Primary (✓)
(b) Social
(c) Subsidiary
(d) None of these
26. Auditing is mandatory for –
(a) Religious trusts
(b) Joint stock companies
(c) Co-operative societies
(d) All of the above (✓)
27. Main types of errors are –
(a) 4
(b) 5 (✓)
(c) 3
(d) 2
28. Which of the following is a type of fraud?
(a) Misappropriation of cash
(b) Manipulation of accounts
(c) Misappropriation of
(d) All of these (✓)
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

29. Which of the following is a misappropriation of cash?

(a) Cash sales not being fully accounted for
b) Teaming and lading
(c) Omitting the entry of sale of scrap
(d) All of these (✓)
30. Which of the following is a misappropriation of Goods?
(a) Pilfer away goods from stock
(b) Using goods for personal purposes
(c) Use of commercial car for personal purposes
(d) Both above (a) and (b) (✓)
31. Allocation of labourers in the construction of personal building engaged in the construction
of official building is………….
(a) Embezzlement of property
(b) Embezzlement of labour (✓)
(c) Embezzlement of facilities
(d) None of these.
32. Domestic use of official sopha is –
(a) Embezzlement of Goods
(b) Embezzlement of Labour
(c) Embezzlement of Property (✓)
(d) None of these.
33. Domestic use of official telephone is –
(a) Embezzlement of labour
(b) Embezzlement of property
(c) Embezzlement of facility (✓)
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(d) None of these

34. Which is the essential quality of an audit programme –
(a) Division in
(b) Fixing responsibilities
(c) Review
(d) Flexibility (✓)
35. An audit programme must be –
(a) Flexible
(b) Detailed
(c) Clear-cut
(d) All of these (✓)
36. Audit programme should be –
(A) Written (✓)
(b) Verbal
(c) Brief
(d) None of these
37.Use of working papers are necessary as it is –
(a) A statutory requirement
(b) Helps to inspect the work of assistants
(c) Essential for the owner of the concern
(d) Beneficial for auditor (✓)
38. The auditor obtains the working papers –
(a) In the course of the audit (✓)
(b) Before starting audit
(c) After completing audit
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(d) None of these

39. Audit working papers are the property of –

(a) Owner of the business
(b) Auditor (✓)
(c) Managers
(d) None of these
40. For which of the following purpose, auditor keeps working papers –
(a) To use them as reference
(b) As a proof of his work
(c) For future guidance
(d) All of these (✓)

5MARKS

1. Difference between internal and independent audit?

2. Express an audit programme? State its advantages?
3. Illustrate the contents of an audit note book?
4. Define fraud? Explain the types of fraud?
5. Explain about on the basis of periodicity?
6. List out the detection and prevention of errors?

10MARKS

1. Define auditing and explain the objectives of an audit?

2. Describe an auditing and its advantage and disadvantage of auditing?
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

3. Explain the different kinds of audit.

4. Difference between accountancy and auditing?
5. State the format of audit programme.
6. Define working paper? Explain the classification of working paper and its merits.

UNIT-II

ONE MARK

1. Under the Internal Check System –

(a) Responsibilities of employees are determined
(b) Work of an employees is checked automatically by other employee
(c) Division of work among employees
(d) All above (✓)
2. Internal check is important for –
(a) Small organization
(b) Big organisation (✓)
(c) Small and big both organizations
(d) None of these
3. Object of internal check is –
(a) Early detection of frauds
(b) To enhance efficiency of employees
(c) To put moral pressure on employees
(d) All the above (✓)
4. Which of the following is based on the principle of division of work?
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(a) Internal control

(b) Internal checking (✓)
(c) Internal audit
(d) None of these
5. The process of distribution of work among employees according to their ability is known as –
a) Internal audit
(b) Internal control
(c) Internal check (✓)
(d) None of these

6. An internal auditor is –
(a) Outsider person
(b) Insider person (✓)
(c) Outsider and insider person both
(d) None of these
7. The scope of work of Internal Audit is decided by the –
(a) Shareholders
(b) Management (✓)
(c) Government
(d) Law
8. Internal checking is –
(a) Synonymous of Internal Audit
(b)Work of one auditor is checked by other senior auditor
(C) A system where work of one employee is checked automatically by otheremployee (✓)
(d) None of these done by
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

9. Internal audit of a business concern is –

(a) Employees of the organisation (✓)
(b) Registered auditors
(c) Elected persons among members of management
(d) Representative of directors
10. Who appoint Internal Auditor?
(a) Management (✓)
(b) Shareholders
(c) Government
(d) Stock Exchange.

11. Who will be responsible for errors in report if external auditor relies on the work of internal
auditor?
(a) External Auditor (✓)
(b) Internal auditor
(c) Management
(d) Shareholder
12. Internal check refers to –
(a) Checking of records by the cashier
(b) Checking of accounts by the internal auditor
(c) Checking of work of one person by another automatically (✓)
(d) Managerial control internally over the subordinates
13. The object of internal audit is –
(a) To prevent errors and frauds
(b) To detect errors and frauds
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(c) To improve financial control

(d) All of the above (✓)
14. In comparison to the independent auditor, an internal auditor is more likely to be concerned
with –
(a) Cost accounting system
(b) Internal control system (✓)
(c) Legal compliance
(d) Accounting system
15. Internal auditing can best be described as –
(a) An accounting function
(b) A line management function
(c) A function which improved the credibility of financial statement (✓)
(d) An internal control function

16. Internal audit proves helpful in

(a)Preventing errors and frauds(✓)
(b)Broader than internal check
(c)Same as internal control
(d)Does not related with internal control
17. In which of the following detailed checking is done
(a)Internal audit (✓)
(b)Interim audit
(c)Final audit
(d) All of these
18. Comptroller and auditor general of India submits its audit report to
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(a)President (✓)
(b)Prime Minister
(c)Finance Minister
(d)None of these
19. Existence of internal audit system does not reduce the desirability of
(a)Annual Audit (✓)
(b)Interim Audit
(c)Statutory Audit
(d)Continuous Audit
20. To sell the business which types of audit is carried on
(a)Periodical Audit
(b)Continuous Audit
(c)Interim Audit (✓)
(d)None of these
21. Which of the following is a feature of continuous audit?
(a)Highly expensive (✓)
(b)Uninterrupted work
(c)Test checking
(d)All of the above
22. Continuous audit is beneficial for
(a)Banks
(b)Railway
(c)Electric Companies
(d)All of these (✓)
23. Internal audit means
a) Audit undertaken to ascertain truth and fairness of state of affairs
b) Audit undertaken internally to evaluate management functions
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

c) Audit undertaken by employees of the organization to check financial

irregularities
d) Audit by independent auditor to improve internal affairs
24. The objective of internal control is to
a) Efficient conduct of business
b) Safeguarding assets
c) Preventing and detecting fraud and other unlawful acts
d) All of these
25. Internal auditor has to submit report to
a) Shareholders
b) Government
c) Company Law board
d) Board of directors
26. The objective of internal audit is
a) Proper control
b) Perfect accounting system
c) Asset protection
d) All of the above
27. Internal audit is also known as
a) Corporate audit
b) Business audit
c) Social audit
d) None of these
28. Internal audit is done
a) Before external audit
b) After external audit
c) Parallel to external audit
d) Vertical to external audit
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

29. Internal audit is undertaken

a) By independent auditor
b) Statutorily appointed auditor
c) By a person appointed by the management
d) By a government auditor
30. Objective of internal audit includes
a) Proper control
b) Perfect accounting system
c) Asset protection
d) All of the above
31. Internal auditor of a company must be
a) Cost accountant
b) Chartered accountant \
c) ICWA
d) Need not possess any professional qualification
32. Internal auditor is appointed by
a) Management
b) Shareholders
c) Government
d) Statutory body
33. Internal audit is
a) An independent audit
b) Objective assurance audit
c) Consulting activity designed audit
d) All of these
34. An internal audit department ____
a) is the independent department
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

b) is the Non-independent department

c) is the inter-dependent department
d) None of these
35. Meaning of Interim Audit:
a) Audit of 12 months
b) Audit for more than 12 months.
c) Audit for less than 12 months.
d) Audit for long period.
36. Internal Audit is conducted by:
a) Employees of an Organization.
b) Customers
c) Government
d) Employees of other Organization

5MARKS
1. Describe the objectives of internal control?
2. Explain the advantage of internal check system.
3. List out the area of internal control.
4. State the essential characteristics of a good system of internal check.
5. Suggest a sound internal control system sale and regard sales.
6. List out the 4 things involves in the internal control system and objectives of internal
control system.
10MARKS
1. State the definition, meaning and objectives of internal control?
2. Explain the elements or principles of internal control.
3. Discuss the advantages and disadvantage of internal control system?
4. Suggest a sound internal control system as regard cash receipt and cash payment in cash
book
5. Explain the internal check system to wages and regard wages.
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

6. Suggests a sound internal control system as regard credit purchase of a company.

UNIT-III

ONE MARK

1. Vouching means testing the truth of the items appearing in the books of original entry”. This is
defined by –
(a) D. Paula
(b) J.R. Batliboi (✓)
(c) Arthur Holmes
(d) R.G. Williams
2. “Vouching is the examination and authentication of underlying evidence which is in support
of the accuracy of a transaction”. This definition is given by –
(a) Arthur Holmes (✓)
(b) J.R. Batliboi
(c) Arnold A. Irish
(d) None of these
3. Vouching is –
(a) Examination of Assets
(b) Verification of Assets
(c) Examination of Entries (✓)
(d) None of these
4. Under vouching checking is done of –
(a) Books of original entry (✓)
(b) Final books of accounts
(c) Balance sheets
(d) None of the above
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

5. Vouching is related with –

(a) Cash receipts
(b) Cash payments
(c) Credit transactions
(d) All of the above (✓)
6. “Vouching is the essence of Auditing”. This statement of –
(a) Spicer and Pegla
(b) R.B. Bose (✓)
(c) R.A. Irish
(d) J.R. Batliboi
7. “Vouching is a technical term”. This statement is of –
(a) R.A. Irish (✓)
(b) Lankaster
(c) J.R. Batliboi
(d) De Paula
8. Back bone of auditing is said to –
(a) The vouching (✓)
(b) The valuation
(c) The verification
(d) The internal audit
9. Vouching includes –
(a) Routine check (✓)
(b) Test check
(c) Internal check
(d) All the above
10. Main object of vouching is –
(a) To prove truthness of transactions
(b) To obtain information regarding the transactions related to business
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(c) Authorisation of transactions

(d) All above (✓)
12. Work of vouching is done by –
(a) Junior clerks
(b) Senior clerks (✓)
(c) Management
(d) None of these
13. Routine check and vouching both are –
(a) Synonymous
(b) Complimentary to each other (✓)
(c) Opposite
(d) None of above
14. Vouching is –
(a) Essence of Auditing
(b) Soul of Auditing
(c) Backbone of Auditing
(d) All of these (✓)
15. Which of the following is correct –
(a) Auditing is the backbone of vouching
(b) Vouching is backbone of auditing (✓)
(c) Vouching is the backbone of accounting
(d) All above
16. Vouching implies –
(a) Inspection of receipts
(b) Examination of vouchers to check authenticity of record (✓)
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(c) Surprise checking of accounting records

(d) Examination of various assets
17. “A voucher may be defined as any documentary evidence by which the accuracy of book
entries may be substantiated”. This is defined by –
(a) Joseph Lankaster (✓)
(b) R.A. Irish
(c ) J.R. Batliboi
(d) Arthur Holmes

18. A voucher may be a receipt, an invoice, an agreement, a requisition slip, or in short, any
suitable written evidence which confirms a written transaction”. This is defined by –
(a) Joseph Lankaster
(b) R.A. Irish (✓)
(c) J.R. Batliboi
(d) Arthur Holmes
19. Vouchers should be concerned with –
(a) Previous year
(b) Current year
(c) Audit period (✓)
(d) None of these
20. Amount should be written on voucher in –
(a) Words
(b) Digits
(c) Both (a) and (b) (✓)
(d) Secret words
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

21 Voucher is a –
(a) Receipt issued to a customer for cash received
(b) Invoice received from suppliers
(c) Document in support of an entry made in the books of accounts (✓)
(d) All above
22. Voucher related to payment should be signed by –
(a) Manager
(b) Accountant
(c) Responsible and authorised official (✓)
(d) All above

23. Which of the following should be in vouchers –

(a) Date
(b) Amount
(c) Signature
(d) All above (✓)
24. Which of the following is termed as backbone of Auditing?
(a) Vouching (✓)
(b) Verification
(c) Valuation
(d) Internal Audit
25. Which one of the following is true –
(a) Entry can be made without a voucher
(b) Comparing the voucher with entries is not essential
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(c) There should be no entry without vouchers and no voucher without entry (✓)
(d) None of these
26. Under vouching checking is done of –
(a) Books of original entry (✓)
(b) Final books of accounts
(c) Balance sheet
(d) All above
27. Examination of vouchers come under the scope of……..
(a) Routine checking
(b) Vouching (✓)
(c) Auditing
(d) None of these
28. Addition of books come under the scope of……….
(a) Routine checking (✓)
(b) Vouching
(c) Auditing
(d) None of these
29. Best option of payment is –
(a) Cash
(b) Cheque (✓)
(c) Bill
(d) All above
30. “Vouching is the backbone of auditing”, this statement is related to the suit –
(a) London and General Bank, 1895
(b) Armitage vs. Brewar and Knott, 1932 (✓)
(c) Mackson and Robinson Incorporation, Marrie Land,
(d) None of these
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

5MARKS

1. Show the concept of vouching-in-depth.

2. Explain the role of auditor in detecting the frauds.
3. Distinguish between vouching and verification.
4. Describe the objectives of vouching.
5. Illustrate the points to be considered while vouching?

10MARKS

1. As an auditor of a company how will you verify the following assets.

(i) Goodwill
(ii) Patent rights and
(iii) Furniture and fixtures.
2. Express the vouching in credit side of cash book?
3. Express the vouching in and value various assets?
4. As an auditor how would you verify and value of assets and liabilities? (any 5)
5. List out the features of a good voucher?
UNIT-IV

ONE MARK

1. Under which section a company auditor is appointed –

(a) 224 (✓)
(b) 228
(c) 233
(d) 251
2. First auditor of a company is appointed by –
(a) Government
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(b) Board of Directors (✓)

(c) Shareholders
(d) Company Secretary
3. By whom the special audit of a company is get done –
(a) Directors of the company
(b) Shareholders
(c) Central Government (✓)
(d) Creditors
4. Government may order for special audit under –
(a) Section 227
(b) Section 233A (✓)
(c) Section 233B
(d) Section 224
5. In annual general meeting, the auditor is appointed by –
(a) Board of directors
(b) Creditors
(c) Shareholders (✓)
(d) Central Government
6. Under which section of the Act, the branch auditor is appointed –
(a) Section 224
(b) Section 225
(c) Section 228 (✓)
(d) Section 231
7. An auditor of a company is appointed for a period of –
(a) One year (✓)
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(b) Two years

(c) Three year
(d) Five years
8. The company shall intimate to the auditor appointed stating that he has been appointed as
auditor of the company within –
(a) 30 days
(b) 20 days
(c) 14 days
(d) 7 days (✓)
9. The auditor shall inform the Registrar of the company in writing about his acceptance of
appointment within –
(a) 7 days
(b) 14 days
(c) 20 days
(d) 30 days (✓)
10. Which section of the Companies Act state the qualifications and disqualifications of
company –
(a) Section 226 (✓)
(b) Section 225
(c) Section 224
(d) None of these
11. Which of the following is not eligible to become an auditor of a company –
(a) A body corporate
(b) An officer or employee of the company
(c) A person who is indebted to the company for an amount exceeding Rs. 1,000
(d) All above (✓)
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

12. Before commencing audit work of a company, the auditor should see –
(a) Legality of appointment
(b) Nature of business
(c) Statutory document
d) All above (✓)
13. Tenure of appointment of an auditor is –
(a) Five years
(b) For indefinite period
(c) From the conclusion of one annual general meeting to the factual conclusion of the
next annual general meeting (✓)
(d) None of these
14. Generally who is appointed as an auditor in the annual general meeting of a company –
(a) Retiring auditor (✓)
(b) New auditor
(c) A body corporate
(d) Officer of a company
15. Auditors in Government companies are appointed by –
(a) Government
(b) Comptroller and Auditor General of India (✓)
(c) President
(d) Prime Minister

16. Before commencing the audit work, a company auditor should –

(a) Examine the appointment
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(b) Examine the statutory records

(c) Study the previous
(d) All the above (✓)
17. In how many companies an auditor can work having less than 25 lac as share capital –
(a) 20 (✓)
(b) 10
(c) 15
(d) 30
18, In how many companies an auditor can work having 25 lac or more as share capital,
(a) 20
(b) 10 (✓)
(c) 15
(d) 30
20, To remove an auditor before the expiry of his term, the necessary thing is –
(a) Prior permission of State Government
(b) Prior permission of Central Government
(c) Passing resolution in the General Meeting
(d) Both (b) and (c) above (✓)
21, Under which section of the Companies Act the remuneration of the auditor has been
discussed –
(a) 224
(b) 224 (✓)
(c) 225
(d) 226
22, The remuneration of an auditor is fixed by –
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(a) Central Government

(b) Board of Directors
(c) General Meeting
(d) Appointing authority (✓)
23, In which form an auditor gets his remuneration –
(a) Salary
(b) Fees (✓)
(c) Fixed percentage of profit
(d) None of these

24, Which of the following is a disqualification for auditor?

(a) An officer of the company (✓)
(b) Relative of the director of the company
(c) Receiving remuneration for his services
(d) Have a lien on books of accounts
25. A chartered accountant is not disqualified as an auditor of a company if he is a –
(a) Employee of that company
(b) Managing director of that company
(c) Have 6% shareholding of that company
(d) Indebted to the company for an amount of Rs. 1,000 (✓)
26. If auditor is not appointed by the Company in its general meeting then –
(a) Audit will not take place in that year
(b) Retiring auditor automatically will continue his work
(c) Director will appoint the director
(d) Central Government will appoint the director (✓)
27, First auditor hold his office for –
(a) One year
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(b) Any period until the appointment of new auditor is

(c) Until the conclusion of the first annual general meeting (✓)
(d) None of above
28, Central Government may appoint special auditor when –
a) Sound business principles are not followed by a company
(b) Possibility of danger to the business by the management of the company
(c) Solvency position of company is suspectable
(d) All above (✓)

29, which of the following may be appointed as a statutory auditor –

(a) A partner of company’s employee
(b) An employee of a company’s director
(c) A partner of the director of that company
(d) Non-related person with that company (✓)
30, By whom Internal Auditor can be removed from his post?
(a) Management (✓)
(b) Statutory Auditor
(c) Shareholders
(d) Debenture holders

5MARKS

1. Explain the appointment of Auditor?

2. Describe the Liabilities of an auditor?
3. State the procedure for appointment of auditor in casual vacancy.
4. List out the qualifications of an auditor?
5. Discuss the powers of an auditor?
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

10MARKS

1. Illustrate the powers and duties of an auditor?

2. Describe the duties of an auditor?
3. Explain eligibility, qualifications and disqualifications of Auditor.
4. Discuss the rights of a company auditor.
5. Explain the provisions regarding appointment of auditor.

UNIT-V

ONE MARK

1. Under which Act, Banking Companies an India –

(a) Banking Regulation Act, 1949 (✓)
(b) Banking Regulation Act, 1969
(c) Banking Companies Act, 1970
(d) None of above
2. Which section of the Banking Regulation Act is related with audit of annual accounts –
(a) Section 25
(b) Section 30 (✓)
(c) Section 27
(d) None of these
3. In banking companies –
(a) Intensive audit is taken place
(b) Auditor examine each transaction in detail
(c) Auditor mínutely check the assets and liabilities shown in balance sheet (✓)
(d) None of these
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

4. For aided educational institutions, audit is –

(a) Compulsory (✓)
(b) Necessary
(c) Statutory
(d) None of these
5. Non-trading institutions prepare –
(a) Trading Account
(b) Profit and Loss Account
(c) P/L Appropriation Account
(d) Income and Expenditure Account (✓)
6. According to which of the following Act, final accounts of Insurance Companies are
prepared?
(a) Insurance Companies Act, 1938
(b) Companies Act, 1956
(c) Both above (a) and (b) (✓)
(d) None of these
7. Accounts of Insurance Companies are prepared according to which sections of Insurance
Companies Act, 1938 –
(a) Section 10-29 (✓)
(b) Section
(c) Section 30
(d) None of above
8. Minimum percentage of provision for a Insurance Company is –
(a) 20%
(b) 25%
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(c) 40% (✓)

(d) 10%
9. Cost Audit is started in –
(a) 1913
(b) 1935 (✓)
(c) 1949
(d) 1965
10. Cost audit is helpful for an institution in –
(a) Price determination
(b) Cost control
(c) Cost control
(d) All above (✓)

11. Cost Audit is compulsory in –

(a) Retail business
(b) Manufacturing concern (✓)
(c) Mines
(d) None of these
12. The cost auditor shall submit his report to –
(a) Shareholders
(b) Central Government (✓)
(c) Board of Directors
(d) Any of the above
13. Cost audit is beneficial for –
(a) Business organisation
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(b) Labourers
(c) Government
(d) All above (✓)
14. Qualification of cost auditor is –
(a) Chartered Accountant
(b) Cost and Works Accountant (✓)
(c) Commerce Graduate
(d) All above
15. Cost auditor is appointed by –
(a) General meeting
(b) Board of directors
(c) Permission of Central Government
(d) Both (a) and (c) above (✓)
16. Main object of Cost Audit is –
(a) Checking of accuracy of total cost and per unit cost of production (✓)
(b) Determining total cost
(c) Determining tender price
(d) All above
17. Cost Audit report is to be furnished –
(a) Within 90 days of the end of the relevant year
(b) Within 180 days of the end of the relevant financial year (✓)
(c) Within 30 days of the date on which the relevant records are made
(d) At least 21 days before the date of annual general meeting of the company
18. Tax audit is compulsory under section –
(a) 44 AA
(b) 44 AB (✓)
(c) 44 AC
(d) 44 AD
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

19. Management audit is a –

(a) New Concept (✓)
(b) Traditional concept
(c) Medival Period Concept
(d) None of above
20. Where management audit is first used?
(a) Japan
(b) America (✓)
(c) India
(d) None of these
21. Qualification of Management Auditor is –
(a) Chartered Accountant
(b) Commerce Graduate
(c) No Prescribed Qualification (✓)
(d) M.B.A.
22. Objective of Management audit is –
(a) Make management more efficient
(b) Detecting shortcomings of management operation
(c) Making cordial relations with employees
(d) All above (✓)
23. Under management audit, which of the following is examined –
(a) Work of employees
(b) Work of auditor
(c) Work of top authorities (✓)
(d) None of these
24. For manufacturing concerns, cost audit is –
(a) Voluntary
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(b) Compulsory (✓)

(c) Statutory
(d) None of these
25. Cost auditor furnish his report to –
(a) Shareholders
(b) Central Government (✓)
(c) Board of Directors
(d) Any of above
26. Management audit is get done by –
(a) Statutory auditor
(b) Government auditor
(c) Cost auditor
(d) None of these (✓)
27. Which of the following section of Companies Act related with cost audit –
(a) Section 233(B) (✓)
(b) Section 100
(c) Section 150
(d) None of these
28. Management Audit is –
(a) Compulsory
(b) Voluntary (✓)
(c) Statutory
(d) None of these
29. What is essential for measuring efficiency of management?
(a) Social Audit
(b) Cost Audit
(c) Tax Audit
 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(d) Management Audit (✓)

30. In management audit, evaluation is being done of the –
(a) Cost accounts
(b) Financial accounts
(c) Managerial functions and policies (✓)
(d) Assets and liabilities

5MARKS

1. Draft a audit programme for hospital?

2. Explain the Specialized Audit for the club?
3. State a note on Electronic Data Processing Audit.
4. Explain the features of audit of a charitable institutions.

10MARKS

1. Discuss about the audit of Hospital.

2. Show the special features of an educational institution?
3. Draft a programme for the audit of Hotel.
4. Explain in detail the important points to be considered while auditing the accounts of
Cinema theatres.

Subject Incharge Course Coordinator HOD

 K.S.R COLLEGE OF ARTS AND SCIENCE FOR
WOMEN
An ISO Certified Institution, Affiliated to Periyar University, Salem
Recognized under Section 2(f) and 12(B) of the UGC Act 1956
K.S.R Kalvi Nagar, Tiruchengode

(Mr.S.RAJAKUMAR) ( Mr.T.KUIMAR ) (Mr.O.Obulikrishnan)