Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Corporate Accounting and Auditing Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email State 1. The management representation letter is: A written statement by auditors A written statement by management to the auditor A statutory requirement for tax audits Part of the financial statements None 2. The audit of a public sector company is conducted by: Internal auditors Comptroller and Auditor General of India (CAG) External private auditors Board of Directors None 3. The main purpose of preparing a Cash Flow Statement is to show: Profit or loss of the company Financial position of the company Cash inflows and outflows during a period Change in working capital None 4. EPS (Earnings Per Share) is calculated as: Net Profit ÷ Authorized Share Capital Net Profit ÷ Number of Equity Shares Net Profit ÷ Total Number of Shares Net Profit ÷ Paid-up Capital None 5. Segment Reporting is applicable to: All public companies Companies that operate in multiple segments Companies with international operations All private companies None 6. In financial statements, "Deferred Tax Liability" arises due to: Tax loss carryforwards Timing differences between taxable income and accounting income Unpaid current tax liability None of the above None 7. A fixed asset is shown in the Balance Sheet at: Market Value Historical Cost Book Value (Cost less Depreciation) Replacement Value None 8. Under which accounting standard are amalgamations covered? AS 10 AS 14 AS 21 AS 22 None 9. In a scheme of internal reconstruction, the reduction in the value of fixed assets is debited to: Capital Reserve Revaluation Reserve Profit and Loss Account None of the above None 10. In a merger, the assets and liabilities of the transferor company are taken at: Book value Fair market value Cost price None of the above None 11. Corporate Social Responsibility (CSR) is mandated under which section of the Companies Act, 2013? Section 135 Section 129 Section 139 Section 123 None 12. Related Party Transactions are disclosed as per: AS 3 AS 18 AS 22 AS 24 None 13. Ind AS (Indian Accounting Standards) are aligned with: US GAAP IFRS Local GAAP IAS None 14. The primary responsibility for the preparation of financial statements lies with: The auditors The shareholders The management of the company The Board of Directors None 15. Continuous audit is suitable for: Small companies Companies with a large volume of transactions Dormant companies None of the above None 16. Test checking refers to: Checking 100% of transactions Checking a representative sample of transactions Checking only cash transactions Ignoring transactions below a certain value None 17. Vouching involves verifying: The existence of assets The authenticity of transactions Share capital Dividend declarations None 18. Fraud committed by employees is classified as: Collusion Defalcation Embezzlement Both b and c None 19. The "expectation gap" in auditing refers to: The difference between actual and budgeted revenue The difference between public expectations and auditor responsibilities The gap between management expectations and auditor findings None of the above None 20. A material misstatement caused by fraud is most likely to occur in: Payroll transactions Journal entries Depreciation calculations Inventory valuation None 21. External confirmation is an example of: Audit procedure Audit evidence Both a and b Neither a nor b None 22. A management letter issued by the auditor contains: The audit opinion Weaknesses in internal controls Adjustments to financial statements Tax compliance details None 23. Negative confirmation is more appropriate when: Risk of material misstatement is low Transactions are large in volume and homogeneous Internal controls are weak None of the above None 24. The primary difference between a review and an audit is: Review provides limited assurance, audit provides reasonable assurance Review is conducted annually, audit is quarterly Review focuses on financial controls, audit focuses on compliance None of the above None 25. Cost audit is applicable to companies as per: Income Tax Act, 1961 Companies Act, 2013 SEBI Regulations None of the above None 26. Stock audit is primarily conducted to verify: Market value of stock Physical existence and valuation of inventory Demand and supply of stock None of the above None 27. Forensic audit focuses on: Detection of fraud and financial irregularities Compliance with tax laws Financial planning None of the above None 28. In banks, a concurrent audit is conducted: Annually Monthly On a real-time basis None of the above None 29. The audit of non-profit organizations is governed by: Companies Act, 2013 Societies Registration Act, 1860 Income Tax Act, 1961 Both b and c None 30. AS 3 deals with: Cash Flow Statements Consolidated Financial Statements Valuation of Inventories Accounting for Fixed Assets None 31. A change in accounting policy is permitted: For better presentation of financial statements To comply with law To conform to accounting standards All of the above None 32. Depreciation is charged on fixed assets to: Maintain cash reserves Reflect the decline in the value of the asset Create a fund for replacement of the asset None of the above None 33. The method of depreciation suitable for assets that become obsolete quickly is: Straight Line Method Written Down Value Method Units of Production Method Sum of Years’ Digits Method None 34. An "adverse opinion" is expressed when: Financial statements give a true and fair view There are material misstatements that affect the financial statements as a whole There are immaterial misstatements The auditor is unable to obtain sufficient evidence None 35. The term "scope of an audit" refers to: The duration of the audit The activities covered during the audit The authority of the management The fees charged by the auditor None 36. The auditor’s working papers are: Confidential property of the auditor Available for public inspection Submitted with the audit report Maintained by the client None 37. The risk that an auditor might express an inappropriate opinion is called: Detection risk Audit risk Control risk Inherent risk None 38. The level of materiality for an audit depends on: Auditor's judgment Company policies Regulatory requirements All of the above None 39. Control risk is higher when: Internal controls are weak Transactions are complex Management is unethical All of the above None 40. The primary objective of a government audit is: Detection of fraud Review of public expenditure Assessment of company profits None of the above 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. 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! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
