401. A vacancy caused by resignation of an auditor is filled by _________.
A. board of directors.
B. managing director.
C. general meeting.
D. central government.

402. Cost audit under section 233(b) of the companies act is ___________.
A. voluntary.
B. compulsory.
C. advisable.
D. avoidable.

403. Duties of a company auditor are defined by __________.
A. Memorandum of Association.
B. Articles of Association.
C. Companies Act 1956.
D. Agreement between company and the auditor.

404. When at an annual general meeting of a company no auditor is appointed or reappointed. In that case________.
A. the central government appoints a person to fill the vacancy.
B. the board of directors appoints a person to fill the vacancy.C. the managing director of the company appoints a person to fill the vacancy.
D. none of these can appoint a person to fill the vacancy.

405. Audit in depth means __________.
A. audit of each and every item.
B. intensive audit of each and every item.
C. intensive audit of a few items.
D. audit of a few selected items.

406. When a company engages a Chartered Accountant as its internal auditor, the external auditor_____________.
A. need not check the areas covered by internal audit.
B. should ignore the existence of internal audit.
C. should incorporate the internal auditors report with his own.
D. should examine the system and efficiency of internal audit and devise a suitable audit programme.

407. Which of the following statements is not true about the continuous audit?
A. It is conducted at regular interval.
B. It may be carried out on daily basis.
C. It is needed when the organization has a good internal control system.
D. It is expensive.

408. Which of the following is not a fact of EPA?
A. Economic audit.
B. Efficiency audit.
C. Expenditure audit.
D. Effectiveness audit.

409. Which of the following is not likely to be a fraud risk factor relating to management characteristics?
A. Tax evasion.
B. Failure to correct known weakness in internal control system.
C. Adoption of conservative accounting principles.
D. High management turnover.

410. Balance sheet does not include ___________.
A. verification of assets and liabilities.
B. vouching of income and expense accounts related to assets and liabilities.
C. examination of adjusting and closing entries.
D. routine checks.

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