Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Advanced Auditing, Assurance and Professional 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 characteristic of an audit engagement? The auditor has a responsibility to express an opinion on financial statements The auditor is required to follow auditing standards The auditor must perform procedures to obtain sufficient audit evidence. The auditor is responsible for preparing financial statements None 2. In the context of professional ethics, which of the following is true about a conflict of interest? A conflict of interest occurs when an auditor is working on two conflicting assignments for the same client A conflict of interest is a situation where a professional is working with two clients from different industries. A conflict of interest is not considered an ethical issue in auditing. None of the above None 3. What is the primary objective of an external audit? To verify the accuracy of tax returns. To express an opinion on the truth and fairness of financial statements. To prepare financial statements for the management. To determine the profitability of an organization None 4. Which of the following is a key feature of the Code of Ethics for Professional Accountants issued by the ICAI? The Code is mandatory for all professionals. It provides rules on audit fees and auditing standards. It encourages members to focus primarily on client satisfaction It focuses on promoting competition and profit maximization None 5. Which auditing standard requires an auditor to assess the risk of material misstatement in the financial statements? ASA 200 ASA 315 ASA 450 ASA 700 None 6. Which of the following is NOT an example of a non-audit service that an auditor may provide to a client? Tax consulting Management consulting Preparation of financial statements Internal audit None 7. Under the framework for quality control, the responsibility for ensuring the firm's audit work meets the standards lies with: The engagement partner The audit team The firm’s management The external regulatory body None 8. What is the purpose of conducting a management letter in an audit? To communicate the audit results to the management. To report significant deficiencies in internal controls to management. To provide an opinion on the financial statements to management To discuss audit fees with the management. None 9. When should an auditor assess the going concern assumption? Only when there is a significant increase in revenue Only during the preparation of financial statements Throughout the audit, especially when there are indications of going concern issues Only when there are legal disputes None 10. An auditor's report is addressed to: The client’s management The board of directors The shareholders or members The government regulatory authority None 11. According to ICAI’s guidelines, which of the following is a fundamental principle of professional ethics for auditors? Integrity Competence Professional behavior All of the above None 12. The relationship between the auditor and the client is best described as: A contract A fiduciary relationship A vendor-client relationship An employeremployee relationship None 13. Under the Companies Act, 2013, the auditor's report must include: The auditor's opinion on the management's performance. An opinion on the financial statements. The auditor's assessment of the client’s strategic plans Recommendations on how to improve financial performance None 14. Which of the following is a component of the audit risk model? Inherent risk Control risk Detection risk All of the above None 15. What is the first step in planning an audit? Conducting risk assessment Preparing the audit program Reviewing the client’s internal control system Establishing the audit objectives None 16. According to ICAI’s Code of Ethics, a member should NOT: Provide false or misleading information. Accept an audit engagement with a contingency fee. Engage in any activity that conflicts with the professional’s independence. All of the above None 17. Which of the following audit procedures is used to detect errors in accounting estimates? Analytical procedures Substantive tests of transactions Test of controls Confirmation None 18. An auditor should perform which of the following before accepting an audit engagement? Evaluate the client’s internal controls Obtain an understanding of the client’s business Review the client’s tax returns All of the above None 19. What is the purpose of a management representation letter? To document the financial statements prepared by the client To confirm the client’s compliance with accounting standards To provide assurance that the management has provided all necessary information To finalize the audit report None 20. According to the Companies Act, 2013, who appoints the statutory auditor of a company? The shareholders in the annual general meeting The board of directors The Ministry of Corporate Affairs The Reserve Bank of India None 21. What is the main objective of auditing internal controls? To ensure compliance with tax laws To provide recommendations for management To assess the efficiency of operations To detect and prevent fraud None 22. Under which of the following circumstances should an auditor consider issuing a disclaimer of opinion? When there is insufficient evidence to form an opinion. When the financial statements are not prepared in accordance with GAAP. When the client does not agree with the auditor’s findings. When there is a disagreement on accounting estimates None 23. Which of the following is a condition for an auditor to remain independent? Having no financial interest in the client Accepting a non-audit service assignment Being employed by the client in the past Offering audit-related consulting services None 24. In which of the following situations should an auditor be concerned about their independence? The auditor has provided tax services to the client. The auditor owns shares in the client company. The auditor has no business relationship with the client. The auditor is reviewing the client’s internal controls None 25. The purpose of analytical procedures in an audit is to: Identify material misstatements in the financial statements. Evaluate the consistency of financial information. Confirm transactions with external parties. None of the above None 26. When performing an audit, the auditor must consider the risk of: Material misstatement Fraud Compliance with laws and regulations All of the above None 27. An auditor is expected to maintain objectivity. Which of the following does this principle prohibit? Offering tax consulting to the client while auditing Accepting gifts or hospitality from the client Providing audit services to a client who is a competitor of a current client All of the above None 28. The auditor’s responsibility for detecting fraud is: To detect all fraud To design audit procedures that are capable of detecting material misstatements due to fraud To investigate every fraud case None of the above None 29. Which of the following statements about the auditor’s report is true? The auditor’s report is a guarantee that the financial statements are free from errors. The auditor’s report expresses an opinion on the financial statements as a whole. The auditor’s report is an evaluation of the company’s internal controls The auditor’s report guarantees the accuracy of financial data None 30. Which of the following is a key characteristic of an effective internal control system? Reliability of financial reporting Detection of fraud Prevention of illegal activities All of the above None 31. What is a substantive test in an audit? A test of controls A test to gather audit evidence about financial statement assertions A test of the client's financial performance A test of compliance with laws and regulations None 32. In which of the following situations is an auditor likely to issue a qualified opinion? The financial statements are free from material misstatements There is a material misstatement that cannot be resolved The auditor cannot obtain sufficient evidence The company has significant internal control weaknesses None 33. The concept of professional skepticism refers to: The auditor’s ability to perform the audit efficiently The auditor’s duty to gather sufficient evidence The auditor’s tendency to doubt the veracity of management’s representations The auditor’s ability to work under pressure None 34. When should an auditor consider issuing an adverse opinion? When the financial statements do not comply with accounting standards. When the financial statements are misleading or materially misstated. When there is a going concern issue. All of the above None 35. According to the ethical standards of the ICAI, an auditor should: Disclose confidential information to third parties when required by law. Accept commissions from clients for recommending products. Engage in discussions with competitors to influence audit results. All of the above None 36. What is the auditor’s primary responsibility when auditing financial statements? To prepare financial statementsmanage the client’s finances To ensure that all disclosures are made To provide an opinion on the financial statements based on the audit To manage the client’s finances None 37. According to the professional ethics guidelines, which of the following is true about independence? The auditor must remain independent of the client both in appearance and in fact Independence is not required in all audit situations. Independence is only required when the audit involves large corporations. Independence is only required for tax services. None 38. Which of the following procedures is used to evaluate the completeness of financial statement disclosures? Test of controls Substantive testing of transactions Analytical review Comparison with prior period statements None 39. The auditor’s responsibility for detecting fraud is: To design audit procedures capable of detecting material misstatements due to fraud To perform detailed investigations of management's financial plans None of the above To detect all fraud None 40. In the event that the auditor finds a material misstatement that cannot be resolved, the auditor should issue: An unqualified opinion A qualified opinion A disclaimer of opinion An adverse opinion 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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