ACC311 Midterm MCQs 2024 by Miss Mehwish

ACC311 (Mega File) · Mid Term (Live Quiz) · Past Papers for Mids./Finals are also Available

 Which one of the following audit techniques ordinarily provides an auditor with the least assurance about the operating effectiveness of an internal control activity?

Inquiry of client personnel ✅ Observation of client personnel Preparation of system flowcharts Inspection of documents and reports

 During the evaluation of internal control system, the auditor may question:

Existence of well-developed and well followed procedures

Existence of well-developed and poorly followed procedures Existence of poorly developed and well followed procedures

•  All of the following should be observed and inspected by the auditors during the risk assessment process of an entity EXCEPT: Visit to other companies in the industry ✅ Observations of Activities and operations Inspection of Documents and records Reading Management reports

 As part of the internal controls review, the auditor is interested in:

Likelihood of misperception of tasks Evaluation of procedures Risk of non-compliance with legislative provisions

 Which of the following is/(are) potential business risk/(s) at the existence of objective phase that an auditor considers during understanding of the entity and its environment?

Expansion of the business New products and services Industry developments

 An auditor can obtain the information regarding financial performance of the entity through different sources. Which one from the following is not a valid source of information?

Credit rating agencies Old or retired auditors' views ✅ Competitors Analysts

 Which one of the following is an objective of understanding the internal control by the auditor?

To identify types of potential misstatements ✅ To identify types of potential statements To identify types of non-potential statements To identify types of non-potential misstatements

 The control environment as a component of internal control should address:

Trading philosophy and operating style of the entity Economic philosophy and operating style of the entity Management philosophy and operating style of the entity ✅ Growth philosophy and operating style of the entity

 While considering internal control system of an entity, the auditor is basically concerned that the system provides reasonable assurance about which one of the following?

Errors have been prevented or detected ✅ That the management can not override the system Controls have not been circumvented by collusion Operational efficiency has been achieved according to management plans

 Which one of the following is TRUE about business risk?

Business risk is shorter than risk of material misstatements Business risk is broader than risk of material misstatements ✅ Business risk is equal to risk of material misstatements None of the given options

Which of the following best describes operational audit?

The audit focuses on finding aspects of the operation where waste will be reduced by controlling The audit seeks and is designed to verify the fair presentation of the company's operating results The audit focuses on the implementation of financial and accounting controls in a newly organized company ✅ The audit requires constant review of administrative controls because this audit relates to the company's operations

Q2. In which of the following situation/(s) the auditor should consider materiality?

When signing the contract When carrying out record When assessing the consequences of misrepresentation

Q3. Which one of the following professional ethics tells that the auditors should neither disclose the information obtained during the course of their audit without permission of his client nor uses that information himself?

Independence Integrity ✅ Confidentiality Objectivity