Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Auditing and EthicsTotal Number of Question: 40Time: 41 MinutesPlease check your email after completion of test for result.All the best... Name Phone No Email State 1. Which of the following is not a purpose of auditing? To detect fraud To express an opinion on financial statements To verify the authenticity of the financial statements To increase profits None 2. Which of the following is the primary objective of an audit? Detection of fraud Expression of opinion on financial statements Preparation of accounts To verify payment of taxes None 3. Which of the following is an ethical requirement for an auditor? Being independent Having a financial stake in the client's company Focusing on maximizing client profit Disclosing client secrets without permission None 4. Which of the following is considered a non-assurance service? Audit Review Compilation Tax advice None 5. The standard for auditing a company’s financial statements is provided by: ICAI Code of Ethics Companies Act, 2013 SA 100 International Auditing Standards None 6. Who is responsible for ensuring the adequacy of internal controls in an organization? Auditor Management Board of Directors Both B and C None 7. What does ‘materiality’ refer to in auditing? The level of misstatement that would influence users of the financial statements The cost of the audit The availability of audit evidence The auditor's independence None 8. The auditor's report includes: Financial Statements Management’s opinion on financial statements Auditor’s opinion on financial statements Client’s future projections None 9. Which of the following is a threat to auditor independence? Familiarity threat Advocacy threat Self-interest threat All of the above None 10. What is the main focus of forensic auditing? Financial statement accuracy Tax optimization Fraud detection and prevention Increasing profitability None 11. Which of the following is required for the appointment of an auditor in a company? Approval of shareholders Recommendation by the audit committee Consent from the outgoing auditor All of the above None 12. Which of the following is not a part of the audit risk model? Inherent risk Control risk Detection risk Performance risk None 13. Which of the following is not a responsibility of the auditor? Detect fraud Express an opinion on financial statements Verify the authenticity of every transaction Evaluate the effectiveness of internal controls None 14. What does SA 315 focus on? Identifying and assessing risks of material misstatement Auditor’s report Audit sampling techniques Internal controls None 15. Which of the following ethical principles is emphasized by the ICAI Code of Ethics? Independence Professional competence Confidentiality All of the above None 16. What does the term "audit evidence" refer to? Information obtained during the audit process The auditor’s opinion The financial statements The client’s internal control systems None 17. Which of the following is a basic principle of auditing? Independence Confidentiality Integrity All of the above None 18. An auditor's report should be addressed to: The shareholders of the company The management of the company The board of directors The regulatory authorities None 19. The principle of auditor independence is intended to: Increase the auditor’s fee Maintain objectivity and impartiality in the audit process Ensure timely audit completion None of the above None 20. Which of the following is an example of a ‘self-interest threat’ to auditor independence? The auditor has a financial interest in the client The auditor has been working with the same client for many years The auditor promotes the client’s services The auditor discusses audit findings with the management None 21. In an audit, what is the purpose of performing a risk assessment? To determine the efficiency of management To increase the scope of audit procedures To identify areas that may contain material misstatements To reduce audit fees None 22. The auditor must evaluate the sufficiency and appropriateness of audit evidence based on: Management’s judgment The audit risk model The client’s internal controls The amount of evidence available None 23. Which of the following would be considered a violation of professional ethics by an auditor? Accepting a gift from a client Providing tax advisory services to the client Auditing the financial statements of a related party All of the above None 24. What does the term "material misstatement" refer to? Any error in the financial statements Errors or omissions that could affect users' decisions Errors that are caused by fraud only Any discrepancies between financial statements and tax filings None 25. Under which of the following circumstances can an auditor issue a qualified opinion? When there is a material misstatement in the financial statements When there is an inability to obtain sufficient audit evidence When the financial statements are free of any misstatements When the client refuses to cooperate with the audit process None 26. Which of the following is the primary duty of an internal auditor? To express an opinion on the financial statements To assist in the prevention and detection of fraud To provide tax advice To liaise with the external auditor None 27. Which of the following is not an element of professional skepticism? A questioning mind A critical assessment of audit evidence Acceptance of management representations without verification A willingness to seek out contrary evidence None 28. Which document is typically included in the auditor’s working papers? Financial statements Management’s internal controls Auditor’s report Audit plan and procedures performed None 29. The auditor's duty to maintain confidentiality continues: Only during the audit engagement During the audit and after the audit engagement ends Only while auditing a company Only while auditing public companies None 30. Which of the following is not a circumstance where an auditor is required to disclose information without client consent? Legal requirement Public interest Ethical obligation A request from management None 31. Which of the following best describes the purpose of an engagement letter? To confirm the terms of the audit engagement To determine the audit fees To agree on the scope of services provided Both A and C None 32. Which of the following is not a characteristic of audit evidence? Sufficiency Appropriateness Complexity Relevance None 33. What is the role of the audit committee in a company? To oversee the internal audit process To manage the company’s accounting function To hire the auditor All of the above None 34. Which of the following can result in an auditor being disqualified from conducting an audit? Lack of independence Conflict of interest Failure to meet professional competence standards All of the above None 35. Which of the following is the responsibility of the auditor in relation to fraud? Detecting fraud Reporting all fraud immediately to authorities Identifying fraud risk factors and assessing the risk of fraud Investigating all instances of fraud None 36. Which section of the Companies Act, 2013 deals with the appointment and removal of auditors? Section 139 Section 140 Section 141 Section 143 None 37. Which of the following best describes the term "audit evidence"? The information that the auditor obtains to support the audit opinion The management's representation of financial statements The internal audit reports The auditor’s personal judgment None 38. What is the main purpose of the internal control system? To detect fraud To ensure accuracy and reliability of financial reporting To minimize audit fees To influence management decisions None 39. An auditor is required to report on: The truth and fairness of financial statements The completeness of tax returns The future prospects of the company The company’s operational efficiency None 40. Under which condition would an auditor issue an adverse opinion? The financial statements are materially misstated and cannot be relied upon There is insufficient evidence to form an opinion The financial statements are free from material misstatements There is uncertainty about the company’s going concern status None 1 out of 4 Great job on taking the INCOC Test! 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