261. ‘Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of _
A. Error of principle
B. Error of commission
C. Error of omission
D. Error of duplication
262. As per AAS4 if auditor detects an error then–
A. He should inform the management.
B. He should communicate it to the management if it is material
C. The auditor should ensure financial statements are adjusted for detected errors.
D. Both (b) and (c)
263. While vouching, how will the auditor ensure himself that all credit sales transactions have been recorded by the entity?
A. Examining cutoff points
B. Matching entries in the sales book against renumbered sales invoices and goods outward notes
C. Counting the number of invoices and matching the number with entries on sales book
D. Both (a) and (b)
264. How many principles are listed in AAS1 which govern auditor’s professional obligation?
265. Both auditing and accounting are concerned with financial statements. Which of the following
A. Auditing uses the theory of evidence to verify the financial information made available by Accountancy
B. Auditing lends credibility dimension and quality dimension to the financial statements prepared by the accountant.
C. Auditor should have through knowledge of accounting concepts and convention to enable him to express an opinion on financial statements
D. All of the above.
266. The risk of management fraud increases in the presence of :
A. Frequent changes in supplies
B. Improved internal control system
C. Substantial increases in sales
D. Management incentive system based on sales done in a quarter
267. Auditing standards differ from audit procedures in that procedures relate to
A. Audit assumptions
B. acts to be performed
C. quality criterion
D. methods of work(d) Rs.19.00
268. Which of the following factors likely to be identified as a fraud factor by the auditor?
A. The company is planning a initial public offer of quality shares to raise additional capital for expansion.
B. Bank reconciliation statement includes deposits in transit.
C. Plant and machinery is sold at a loss.
D. The company has made political contributions.
269. The most difficult type of misstatement to detect fraud is based on:
A. Related party purchases
B. Related party sales
C. The restatement of sales
D. Omission of a sales transaction from being recorded.
270.An auditor obtains knowledge about a new client’s business and its industry to
A. Make constructive suggestions concerning improvements to the client’s internal control system.
B. Evaluate the appropriateness of audit evidence obtained
C. Understand the events and transactions that may have an effect on client’s financial statements.