591. In case of sales return, the auditor should examine which documents?
A. Credit notes, advice notes and inward return notes
B. Debit notes, advice notes and inward return notes
C. Purchase invoices, advice notes and inward return notes
D. Credit notes, inspection report and inward return notes

592. An internal auditor discovered that fictitious purchases have been recorded by the purchase clerk. This indicates absence of which control?
A. Purchase invoices are independently matched with purchase orders and goods received notes
B. Goods received notes requires the signature of individual who authorized the purchase
C. Routine checks are performed by internal auditor fortnightly.
D. Purchase function and production function are clubbed in one department

593. Which of the following is most crucial to a purchase department?
A. Reducing the cost of acquisition
B. Selecting supplies
C. Authorizing the acquisition of goods
D. Assuring the quality of goods

594. The auditor is most likely to examine related party transactions very carefully while vouching
A. credit sales
B. sales returns
C. credit purchases
D. cash purchases

595. In order to vouch bought ledger, the auditor obtain confirmations from creditors. The principal reason for the auditor to examine suppliers statements at balance sheet date is to obtain evidence that
A. the supplier exist
B. there are no unrecorded liabilities
C. recorded purchases actually occurred
D. to link creditors with cash book entries

596. The creditors accounts, generally, have credit balance. Debit balance may be due to
A. advance paid against an order
B. goods returned
C. wrong debit to supplier account
D. Any of these

597. In case of vouching, the auditor is least likely to examine authorization by appropriate authority in case of –
A. bad bads written off
B. sales return
C. purchase return
D. discount allowed to customers as per organizational policy

598. Vendors should be approved by Management before purchase department executes an order. If this is not done, then which of the following situations may arise
A. purchases could be made from vendors whose product quality may not be good
B. Purchases may be made from related parties without management’s knowledge
C. Purchases could be made from vendors who may have offered price to vice-president purchases
D. Any of these

599. Which of the following is not true with regard to verification of assets?
A. It invoices substantiation of occurrence of transactions
B. Its objective is to establish existence, ownership, possession, valuation and disclosure of assets
C. The auditor has to form an opinion on different aspects
D. All are true

600. An auditor is verifying valuation of building which has been self-constructed by the client. Which of the following documents is least relevant to the auditor for verification purposes?
A. Bills of contractor
B. Minutes of meeting of board of directors
C. Certificates of engineer and architect
D. Loan agreement


Leave a Reply