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 fundamental principle of professional ethics for auditors? Integrity Objectivity Advocacy Professional Competence and Due Care None 2. The primary objective of an audit of financial statements is to: Detect fraud Express an opinion on the financial statements Verify all transactions Improve company efficiency None 3. Which of the following is an example of a compliance audit? Financial statement audit Operational audit Tax audit Internal audit None 4. The concept of 'true and fair view' in auditing refers to: Accuracy of financial statements Compliance with accounting standards Presentation of financial information without material misstatements All of the above None 5. Which of the following is NOT a type of audit evidence? Physical examination Analytical procedures Auditor's personal opinion Documentary evidence None 6. Inherent risk is: The risk that a material misstatement will not be detected by the auditor The susceptibility of an assertion to a material misstatement, assuming no related controls The risk that a material misstatement exists in the financial statements The risk that the auditor will express an inappropriate opinion None 7. The auditor's responsibility for the detection of fraud and error is: Absolute Limited to material misstatements Limited to errors only None of the above None 8. Which of the following is a threat to auditor independence? Familiarity threat Self-interest threat Intimidation threat All of the above None 9. The term 'audit risk' refers to: The risk of the auditor being sued The risk that the auditor may unknowingly fail to appropriately modify their opinion on financial statements that are materially misstated The risk of fraud occurring in the organization The risk of financial loss to the auditor None 10. Which of the following is NOT a component of audit risk? Inherent risk Control risk Detection risk Business risk None 11. The auditor's opinion that financial statements are presented fairly, in all material respects, is known as: Qualified opinion Adverse opinion Unmodified opinion Disclaimer of opinion None 12. Which of the following is a limitation of an audit? Use of sampling Inherent limitations of internal control Persuasiveness of audit evidence All of the above None 13. The primary responsibility for the prevention and detection of fraud rests with: The auditor The management and those charged with governance The internal auditor The audit committee None 14. Which of the following is NOT a type of audit opinion? Unmodified opinion Qualified opinion Conditional opinion Adverse opinion None 15. The auditor's working papers are the property of: The client The auditor The shareholders The regulatory authority None 16. Which of the following is an example of a substantive procedure? Testing the operating effectiveness of controls Observing the physical inventory count Evaluating the design of internal controls Reviewing the client's internal audit reports None 17. The term 'materiality' in auditing refers to: The significance of an amount, transaction, or discrepancy The accuracy of financial statements The auditor's independence The scope of the auditt None 18. Which of the following is NOT a safeguard to auditor independence? Rotation of audit partners . Establishing policies to prohibit financial interests in audit clients Accepting gifts from the client. Implementing quality control procedures None 19. The auditor's report should be dated: As of the balance sheet date When the audit is substantially complete When the financial statements are approved by management When the auditor signs the report None 20. Which of the following is a direct assistance provided by internal auditors to external auditors? Performing substantive tests Evaluating internal controls Preparing financial statements Designing audit procedures None 21. The concept of 'professional skepticism' requires auditors to: Trust the management completely Perform audits with an attitude of doubt Rely only on external evidence Focus only on fraud detection None 22. The primary objective of internal control is to: Assist the auditor in conducting an audit Prevent and detect frauds and errors Ensure reliable financial reporting and safeguard assets . Prepare financial statements None 23. Audit sampling is generally used when: The auditor is not confident in their skills The population is large and tests cannot be performed on all items The entire population must be examined There are no internal controls in place None 24. Audit documentation should be sufficient to: Allow another auditor to perform the same procedures Provide evidence for all transactions Support the auditor's report and conclusions Verify every aspect of internal control None 25. Which of the following is an ethical threat arising from a close relationship with the client? Familiarity threat Advocacy threat Self-interest threat Intimidation threat None 26. Test of controls involves: Obtaining direct confirmation of balances Verifying the physical existence of assets Evaluating the effectiveness of internal controls in preventing or detecting misstatement Checking the profitability of the organization None 27. Which of the following is NOT a generally accepted auditing procedure? External confirmations Inquiry and observation Compilation of accounts Inspection of documents None 28. The term 'self-review threat' refers to: A situation where the auditor advocates for the client Reviewing one's own work or the work of one's firm during an audit Receiving benefits from the client Being influenced by a dominant client personality None 29. Which of the following is an advantage of statistical sampling? Requires no specialized knowledge Provides a basis for quantifying sampling risk Removes the need for professional judgment . Guarantees the detection of fraud None 30. Analytical procedures performed at the end of an audit are primarily intended t Detect material misstatements in financial data Identify unusual trends or relationships Assist in forming an overall conclusion about the financial statements Perform substantive tests None 31. The responsibility of the external auditor with respect to compliance with laws and regulations is: To express an opinion on compliance To ensure no laws are violated To obtain reasonable assurance that financial statements are free of material misstatement due to non-compliance To review all legal issues of the company None 32. Which of the following is NOT part of the Code of Ethics issued by ICAI? Integrity Independence Advocacy Confidentiality None 33. The term 'going concern' refers to: The ability of the company to continue operations for the foreseeable future A mandatory condition for audit reports A qualification in the auditor's report Compliance with all accounting standards None 34. Which of the following best defines 'audit evidence'? The data and information used by the auditor to prepare financial statements The documents provided by the management for audit purposes Information used by the auditor to arrive at conclusions on which to base the audit opinion Information gathered by internal auditors None 35. Which standard deals with the auditor's responsibility to express an opinion on the financial statements? SA 700 SA 705 SA 210 SA 520 None 36. Control risk is: The risk that a material misstatement will occur in the absence of internal controls The risk that the auditor may not detect a material misstatement The risk that a material misstatement will not be prevented or detected by the entity’s internal controls The combined risk of inherent and detection risk None 37. Peer review in auditing refers to: Examination of the audit report by peers in the same firm Evaluation of one auditor's work by another qualified auditor to ensure quality Review of audit work by management None of the above None 38. Which of the following is NOT a responsibility of the audit committee? Overseeing the audit process Managing the company’s financial statements Assessing the auditor's independence Monitoring compliance with regulatory requirements None 39. In case of a fraud, the auditor’s responsibility is to: Guarantee prevention of fraud Notify the shareholders immediately Plan and perform the audit to detect material fraud Express a qualified opinion None 40. SA 240 deals with the auditor’s responsibility relating to: Planning an audit of financial statements Audit in compliance with laws and regulations Consideration of fraud in an audit of financial statements Using the work of internal auditors None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test.Look out for results and future opportunities.Stay Connected !! Your quiz time is about to finish. 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