Auditing MCQ Quiz in मल्याळम - Objective Question with Answer for Auditing - സൗജന്യ PDF ഡൗൺലോഡ് ചെയ്യുക

The correct answer is ₹25,00,000.

Key Points As per section 143 (15) of Companies Act 2013:

If any auditor, cost accountant or company secretary in practice do not comply with the provisions of sub-section (12), he shall be punishable with fine which shall not be less than one lakh rupees but which may extend to twenty-five lakh rupees.

Additional Information  As per section 143 (12) of Companies Act 2013:

Notwithstanding anything contained in this section, if an auditor of a company, in the course of the performance of his duties as auditor, has reason to believe that an offence involving fraud is being or has been committed against the company by officers or employees of the company, he shall immediately report the matter to the Central Government within such time and in such manner as may be prescribed. 

The correct answer is the auditor and his audit assistants.

Key Points Audit programme:

• An audit program is a detailed plan or schedule that outlines the specific procedures and steps to be followed during an audit engagement.
• It includes the scope, objectives, timing, and sequencing of audit procedures.

Important Points

• When conducting an audit, the auditor and his audit assistants prepare an audit program that outlines the specific steps to be followed, such as conducting risk assessments, testing internal controls, performing substantive procedures, and verifying the accuracy of financial statements.
• As the professional responsible for conducting the audit, the auditor develops the audit program based on their understanding of the client's business, risks, and relevant audit standards.
• The auditor takes into account the nature and complexity of the client's operations, the materiality of different accounts or transactions, and other factors to design an effective and efficient audit program.

Hence, the Audit Programme is prepared by the auditor and his audit assistants.

The correct answer is Right to seek information and explanation.

Key Points

Right to seek information and explanation

• The right to seek information and explanation is a significant right of a company auditor.
• This right allows the auditor to request and obtain relevant information, explanations, and clarifications from the company's management and employees regarding financial transactions, records, and other matters related to the audit.
• It enables the auditor to gather sufficient evidence and understanding to form an opinion on the financial statements.

Important Points

• During the audit process, if the auditor identifies discrepancies or inconsistencies in the financial records, they have the right to seek additional information and explanations from the company's management.
• This right allows the auditor to clarify any uncertainties or address any concerns to ensure a thorough and accurate audit.
• The auditor may request supporting documents, interview key personnel, or engage in discussions with management to obtain the necessary information for the audit.

Additional Information

• Right to attend Board Meeting: While the auditor may attend board meetings to provide information and clarification related to the audit, it is not a specific right of the auditor. The board of directors is responsible for the overall governance and management of the company, and the auditor's attendance at board meetings is usually at the invitation or discretion of the board.
• Right to get dividend from the company being audited: Auditors do not have a right to receive dividends from the company being audited. The auditor's role is to provide an independent assessment of the financial statements and does not involve receiving dividends or participating in the company's profit distribution.
• Right to remove director of the company: Auditors do not have the authority or right to remove directors of the company. The appointment, removal, and management of directors are determined by the company's shareholders and governed by company laws and regulations.

The correct answer is Decrease the detection risk.

Key Points

• When the auditor believes that the risk of giving an inappropriate audit opinion is too high, the auditor should consider increasing the level of audit testing to reduce detection risk.
• This may involve increasing sample sizes or conducting additional audit procedures to obtain more reliable evidence.
• Alternatively, the auditor may decide to use a lower level of materiality in order to provide a greater margin of safety in the audit opinion.
• However, decreasing inherent risk or increasing materiality level will not address the issue of inappropriate audit opinion.

The incorrect statement is It is needed when the organization has a good internal control system.

Key Points

• Continuous audit is a type of auditing where the examination of financial transactions and records is performed on an ongoing and regular basis throughout the year.
• The objective of continuous audit is to provide real-time assurance on the accuracy and reliability of financial information and to identify any errors or irregularities as they occur.
• Continuous audit is achieved through the use of technology and automated audit tools.

Important Points

It is conducted at regular intervals.

• True. Continuous audit involves regular and frequent auditing activities.

It may be carried out on a daily basis.

• True. Continuous audit can be performed daily, as the auditing process is ongoing and does not have a specific end date.

It is needed when the organization has a good internal control system.

• Not true. Continuous audit is usually implemented in organizations with weak internal control systems or when there is a need for real-time monitoring and detection of errors or fraud.
• A strong internal control system may reduce the need for continuous audit since the control measures themselves provide a level of assurance.

It is expensive.

• True. Continuous audit can be expensive to implement and maintain because it requires the use of sophisticated technology and audit tools to monitor transactions and records continuously.
• The costs associated with continuous auditing technology and personnel can be significant.

The correct answer is Latin.

Key Points

• The word "Auditing" is derived from the Latin word "Audire," which means "to hear" or "to listen." In ancient times, auditors would listen to the oral presentations of financial records and accounts to assess their accuracy and reliability.
• Over time, the practice evolved into a formal and systematic examination of financial information, which is known as auditing today.
• The Latin word "Audire" forms the basis for various terms related to auditing, such as auditor (one who listens), audit (the process of examination), and auditory (pertaining to hearing).

Internal audit is an evaluation and analysis of the business operation conducted by the internal audit staff.

Key Points Internal audit 

•  Internal audit is carried out by the internal audit staff, who are employees of the organization but are independent of the areas they audit.
• They assess risks, review financial and operational processes, identify weaknesses, and recommend improvements to enhance the efficiency and effectiveness of operations.

Important Points

Internal auditing is a valuable tool for organizations of all sizes. It can help organizations to:

• Identify and mitigate risks.
• Improve the effectiveness of their controls.
• Ensure that they are complying with laws and regulations.
• Improve their performance.

 The correct answer is Appointing Authority.

Key Points

Auditor:

• An auditor is an independent professional appointed to examine and evaluate the financial statements and records of an organization.
• The auditor's role is to express an opinion on the fairness and accuracy of the financial statements.

Important Points

• The auditor is required to submit the audit report to the appointing authority.
• The appointing authority is typically the entity or individual responsible for appointing the auditor, such as the shareholders, board of directors, or governing body of the organization.
• The appointing authority has the responsibility to review and assess the audit findings and recommendations provided by the auditor.
• In the case of a public company, the shareholders appoint an external auditor to examine the financial statements and provide an independent opinion on their accuracy.
• The auditor prepares an audit report, which is then submitted to the company's board of directors or audit committee, who act as the appointing authority.
• The board of directors reviews the audit report and communicates the findings to the shareholders at the company's annual general meeting.

The correct answer is Unqualified Report.

Key Points

Unqualified Report:

• When an auditor is satisfied with the financial statements of an organization, he/she submits an unqualified report.
• An unqualified report is a report issued by an auditor that states that the financial statements of an organization are free from material misstatement and that they present fairly, in all material respects, the financial position of the organization at a given point in time and its financial performance during the relevant period.

Additional Information

• A qualified report is issued when the auditor is unable to obtain sufficient evidence to support the financial statements or when the financial statements contain material misstatements.
• An interim report is a report issued between regular annual reports.
• Final report is issued at the conclusion of an audit engagement.

The correct answer is Board of Directors of the company.

Key Points

• The internal auditor is appointed by the board of directors of the company to evaluate and monitor the company's financial and operational activities.
• The internal auditor works independently to provide assurance to the management that the company's internal controls and risk management processes are working effectively.
• The internal auditor reports to the audit committee, which is a sub-committee of the board of directors and presents the findings of the internal audit to the board of directors.
• The internal auditor plays a crucial role in ensuring the company's compliance with laws and regulations, preventing fraud and mismanagement, and improving the efficiency and effectiveness of the company's operations.