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 principle of the Code of Ethics? Professional behavior Objectivity Advocacy Integrity None 2. What is the purpose of a forensic audit? Detecting and preventing fraud Evaluating internal controls Assessing operational efficiency Preparing financial statements None 3. An auditor uses the concept of materiality to: Evaluate audit risk control weaknesses Plan the audit and assess the impact of misstatements Ensure compliance with accounting standards Identify internal control weaknesses None 4. The auditor’s report is addressed to: The company’s shareholders The company’s management The audit committee The regulatory authorities None 5. The principal objective of a tax audit is to: Detect errors in financial statements Report compliance with tax laws Issue an opinion on financial statements Provide tax-saving advice None 6. Which of the following is a limitation of internal control? Collusion among employees Automation of processes Timely preparation of financial statements Cost-effectiveness None 7. Negative confirmations are most likely used when: A small number of accounts are involved The auditor expects a high level of exceptions Internal controls are weak A large number of small account balances exist None 8. An audit engagement letter does NOT include: Scope of audit Responsibilities of management Detailed audit procedures Reporting framework None 9. Which standard deals with audit planning? SA 300 SA 240 SA 530 SA 700 None 10. Related party transactions should be disclosed in accordance with: SA 570 SA 550 SA 700 SA 315 None 11. SA 700 focuses on: Forming an opinion and reporting on financial statements Reporting on internal controls Audit risk assessment Materiality in audits None 12. Which of the following is a type of modified opinion? Disclaimer of opinion Adverse opinion Qualified opinion All of the above None 13. The concept of 'true and fair view' in audits refers to: Absolute accuracy in financial reporting Adherence to ethical standards Free and unbiased presentation of financial statements Providing management advice None 14. Which of the following is an inherent risk factor? Poorly designed internal controls Complex transactions Auditor inexperience Misapplication of accounting principles None 15. The auditor’s responsibility regarding going concern is to: Certify that the entity will continue in operation Assess whether there are material uncertainties related to going concern C. Recommend ways to improve the entity’s financial position D. Verify solvency ratios Recommend ways to improve the entity’s financial position Verify solvency ratios None 16. Which of the following is an example of substantive testing? Reviewing the design of internal controls Observing inventory counting procedures Confirming the balances with external parties Assessing the risk of fraud in the financial statements None 17. A fraud risk assessment involves: Determining whether fraud has occurred Identifying the likelihood of fraud occurring during the audit Preventing the occurrence of fraud Verifying the accuracy of financial records None 18. What is the purpose of performing test of controls? To obtain assurance that no fraud has occurred To ensure that the entity’s internal controls are effective in preventing or detecting material misstatements To detect material misstatements in the financial statements To calculate the audit fees None 19. A qualified opinion is issued when: There is a scope limitation or material misstatement There is an inability to obtain sufficient audit evidence The financial statements are free from material misstatement The auditor determines the going concern assumption is appropriate None 20. Which of the following is true about the auditor's report? It must include the auditor's opinion on the financial statements It is prepared before the audit is conducted It includes detailed audit procedures It is only issued when the financial statements are free of misstatements None 21. SA 240 is concerned with the auditor’s responsibility regarding: Fraud Internal control Going concern Accounting estimates None 22. In an audit of financial statements, substantive procedures are designed to: Ensure that internal controls are operating effectively Provide reasonable assurance that the financial statements are free from material misstatement Assess the effectiveness of the management's accounting policies Identify internal control weaknesses None 23. The concept of ‘audit evidence’ includes: Financial statements only Information obtained from internal control reports Information used by the auditor to form an opinion on the financial statements D. Only information from external parties Only information from external parties None 24. Which of the following statements about an auditor's responsibility for detecting fraud is correct? The auditor is responsible for detecting all fraud in the financial statements The auditor is responsible for detecting material misstatements due to fraud The auditor is responsible for detecting fraud only if it is intentionally hidden The auditor is not responsible for detecting fraud under any circumstances None 25. Which of the following is NOT an example of an ethical threat? Self-interest threat Self-review threat Independence threat Familiarity threat None 26. The audit evidence hierarchy (from most reliable to least reliable) is: Oral evidence, written evidence, external evidence External evidence, written evidence, oral evidence Written evidence, external evidence, oral evidence Oral evidence, external evidence, written evidence None 27. The Code of Ethics for ICAI includes which of the following fundamental principles? Trust Advocacy. Professional competence Financial independence None 28. Analytical procedures in audit are most commonly used during which of the following stages? Planning Fieldwork Completion Reporting None 29. According to the Companies Act, which of the following is NOT a responsibility of the auditor? Verifying the financial statements. Issuing an opinion on the financial statements Ensuring compliance with tax laws Reporting on the company’s internal controls None 30. The auditor should perform a walk-through to: Review the financial statements Test the effectiveness of internal controls Confirm account balances with third parties Observe the company’s financial condition None 31. In which case would an auditor issue a disclaimer of opinion? When the financial statements are materially misstated When the auditor is unable to obtain sufficient appropriate audit evidence When there is no significant uncertainty regarding going concern When there is a limitation in scope but no material misstatement None 32. Which of the following is a key aspect of a quality control system for an audit firm? Regular internal audits Independent reviews of audit work Performance evaluation of management Ongoing training for staff None 33. The concept of materiality is important in an audit because: It helps the auditor decide whether to issue an opinion It helps the auditor to determine the level of audit fees It determines the auditor's overall audit strategy It helps identify areas where internal controls are weakest None 34. Which of the following is NOT part of the auditor’s responsibilities? Reviewing the financial statements Ensuring that the company complies with laws and regulations Conducting tests of control Providing management with suggestions for improving internal controls None 35. An auditor must maintain professional skepticism, which means: Trusting the management’s assertions Assuming that no fraud has occurred Questioning the validity of audit evidence and being alert to potential misstatements Being overly critical of the client None 36. What is the purpose of performing control tests during an audit? To detect fraud To evaluate the operational effectiveness of internal controls To perform substantive testing. To verify the accuracy of financial data None 37. Which of the following is the main purpose of audit planning? To ensure the audit is completed on time To identify fraud risks To determine the nature, timing, and extent of audit procedures To confirm the internal control system None 38. The nature of an audit report depends on the: Risk of material misstatement Evaluation of the company’s accounting policies Auditor’s professional judgment and findings Independence of the auditor None 39. Which of the following is a reason an auditor might issue a modified opinion? The auditor was unable to obtain sufficient audit evidence The client refuses to cooperate There is a misstatement in the financial statements All of the above None 40. An auditor’s responsibility is to report on the financial statements, not: The internal controls The management’s competence The company’s future viability Compliance with tax regulations 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. Few seconds left. 1 2 3 4 Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! 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