Suraj Patel Education
Sub : AUDITING
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FILL IN THE BLANKS .
1. Bills payable is shown in the balance sheet of a book under other liabilities.
2. Tax audit is provide , by section 44 AB.
3. Auditor of a sole trader is appointed by the sole proprietor.
4. Auditor of a firm must have knowledge of a partnership deed /partnership act.
5. Auditor of a small company many be done by a sole charted accountant.
6. The auditor of a hotel should ensure statutory compliance.
7. Sale of scrap is included in gross receipts.
8. Partnership deed contains provision affecting accounts of a firm.
9. Admission fees of students can checked from admission slips /fee receipt.
10. In case of a sale trader owner / proprietor decides the scope of audit.
11. IRDA regulates the working of insurance companies.
12. Stock register shows inventory of the educational institutions.
13. Average clause is applicable in case of under insurance.
14. Reserve for unexpired risk in respect of fire insurance is 50%.
15. In case of a club stock verification can be done from stock register.
16. Caution money is disclosed in the balance sheet an liabilities side.
17. Forma of financial statement of a sole trader is decided by ICAI.
18. Bills purchased & discounted are shown in the balance sheet of a bank under schedule of advance / schedule 9.
19. Bills for collection are shown in the balance sheet of a bank under contingent liabilities.
20. In absence of partnership deed profit or loss is shared by partners equally.
21. In the case of hospitals cash collection from patients is verified from cash bank.
22. Outstanding premium is shown in the balance sheet of an income insurance company under other assets.
23. In absence of partnership deed partners are entitled to interest on loan at 6%.
24. Audit report is a statement of collected & considered facts about the accounts.
25. Audit report is an instrument through which the auditor expresses his opinion.
26. Audit report should not be biased.
27. Audit report is in the nature of verification.
28. The scope of audit report is wide than the scope of audit certificate .
29. A 528 provide for audit report.
30. Audit report is addressed to the member.
31. The report must be signed by the auditor .
32. The report which says the financial statements company with GAAP is an unqualified report.
33. The auditor means a person with final responsibility for the entire audit work & audit report.
34. Working papers are classified into utility / usefulness as per SA 230.
35. Audit plan is prepared before the commencement of the audit.
36. In case of educational institution all the provision affecting the accounts are given in Trust Deed.
37. Patents & trademarks a\c are fixed intangible assets.
38. Arrears of fixed cumulating preference dividends are required to be shown under contingent liabilities in the balance sheet of the company.
39. Audit or regular intervals is known as continuous audit.
40. Which of the following does not appear as an assets arrears of preference dividend.
41. Auditor is basically responsible for prevention & detection of errors & frauds .
42. Propriety audit is an inherent aspect in the audit of government entities.
43. The Annual General meeting has to be conducted by company.
44. Audit where in deal’s justification is also checked is audit propriety.
45. A banking company’s profit & loss account hos to be in form ‘B’.
46. General insurance company’s balance sheet has to be in B.B.S.
47. The wisdom of director’s decisions are checked in performance audit.
48. Life insurance company’s profit & loss a/c has to be in A.P.L form.
49. Companies [auditor’s report] order to Does not apply banking companies.
50. Government audit is conducted by the C&A.G.
51. As per IRDA regulation an insurance company is required to prepare revenue a/c ; profit & loss ; balance sheet.
52. The items under ‘ RESERVE & SURPLUS’ schedule 2 of the balance sheet of a bank should show the following statutory reserve, capital reserve , share premium.
53. Bills purchased & discounts are shown in the balance sheet of a bank In the notes forming part of balance sheet of a bank under contingent liabilities.
54. Inter office adjustments will appear in the abridged balance sheet of a book either under ‘other liabilities ‘ or ‘ other assets ‘.
55. Audit program is prepared by the auditor & his assistants.
56. Bill of collection are shown in the notes forming part of balance sheet of a bank immediately after contingent liabilities.
57. Disclosure of accounting policies will cover those accounting policies which are as prescribed & followed.
58. Under CARO the auditors report should include reports about maintenance of proper records relating in fixed assets.
59. Auditor is basically response for prevention & detection of errors & frauds.
60. Discount income on bills is shown by the bank in schedule of interest earned .
61. Financial statement need to be prepared in accordance with accounting standard issued by the institute of charted accountants of India.
62. Balance of loan a/c [liability] is best verified by from ledger.
63. Current assets do not include trade receivables.
64. Auditor is responsible for compliance with accounting standard .
65. Financial statement have to be certified by director.
66. Interim dividend of a company can be declared by board of directors.
67. The annual general meeting has to be conducted by company.
68. There exists a standard an audit on the external confirmations.
69. Propriety audit is an inherent aspect in audit of government entities.
70. In the case of proprietary concern audit the earlier years accounts may not have been audited.
71. In tax –audit ,form no 3cd containing various particulars will have to be attached to the audit report under section 44 AB of the income –tax act.
72. In a bank audit ,the auditor will have to check compulsory transfer to the statutory reserve.
73. In the audit of a hospital , its register of patients has to be verified.
74. Company has to follow accrual basis of accounting.
75. There are two standard promulgated on the audit engements one general , the other for some specified exam.
76. There exists a standard on audit on the external confirmation.
77. Propriety audit is on inherent aspect in the audit of government entities.
78. In the case of partnership firm audit ,the earlier years accounts may not have been audited.
79. In tax audits/ form no.3CD containing various particulars will have to be attached to the audit report under section 44 AB of the income tax act.
80. In a tax audit the auditors will have to check compulsory transfer to the statutory reserve.
81. In the audit od a hotel , its license has /have always to be verified.
82. Director is responsible for compliance with accrual system.
83. Treatment of goodwill is to be disclosed with financial statement as “accounting policy followed”.
84. Accounting standard 1 is mandatory.
85. Arrears of fixed cumulating preference dividend are required to the shown under current liabilities in the balance sheet of a company.
86. Goodwill & patent right are intangible fixed assets.
87. Bills foe collection are shown in the balance sheet of a bank under both assets & liabilities.
88. Opening balance of debtors ledger are checked form trial balance of current year.
89. Audit of bank is an example of statutory audit.
90. Sinking fund appear under ‘provision’ in the balance sheet.
91. Amount deposited into bank is vouched on the basis of counter foil of pay in slip & bank statement.
92. Employee security deposit is shown by a bank under deposits.
93. Checking postings in the debtors ledger will involved checking sales register, debit note/ credit note register , cash /bank book & journal .
94. Con current audit is audit of transaction as they happen.
95. A statutory auditors has a right of access at all time to books, accounts & vouchers of the company.
96. Capital reserve appears as on assets in the balance sheet of company.
97. Tracing of purchases recurred in the purchase book to purchase invoice is not an analytical procedure.
98. The most difficult type of statement to fraud is based on the restatement of sales.
99. Opening balance of creditor ledger are checked form audited accounts of last year.
100. Audit of bank is an example of statutory audit, balance sheet audit, con current audit.
101. Con current audit at regular intervals.
102. Interim dividend of a company can be declared by board of directors.
103. Which of the following items does not appear under the head ‘reserves & surplus’ in the balance sheet proposed dividend .
104. Following is an example of accounting policy going concern.
105. Auditor is basically responsible for prevention & detection of errors & frauds.
106. The risk of fraud increases when management is in hands of single person.
107. Audit pans should based on knowledge of the clients business.
108. In case of education institutions all the provision affecting the accounts are given in trust deed.
109. The tax auditor has to submit his report to the assesse .
110. Bills for collection are shown in the balance sheet of a bank under contingent liabilities.
111. Trade mark right are intangible assets.
112. Arrears of fixed cumulative preference dividend are required to be shown under contingent liabilities in the balance sheet of a company.
113. Treatment of goodwill is an example of an accounting policy.