ACC311 Midterm Solved Paper

MIDTERM EXAMINATION

Spring 2009 ACC311Fundamentals of Auditing (Session - 1)

Q1. Which of the following is a primary objective of an operational audit?

Past protection provided by existing internal control

The verification that a company's financial report is fairly presented

The accuracy of the data reflected in management's financial records

Future improvements to accomplish the goals of management

Q2. Which of the following auditors especially focus upon exceptions, oddities, accounting Irregularities, patterns of conduct, and not on errors or omissions?

Financial auditors

Fraud auditors

External auditors

Internal auditors

Q3. Which of the following ‘audit process stages’ shall generally be conducted at the end in relation to the others?

Auditing business processes and related accounts

Preliminary assessment of materiality and audit risk

Preliminary analytical procedures e.g. ratio analysis

Consideration of internal control systems

Q4. Which of the following primary assertion is satisfied when an auditor ensures that there is no false transaction recorded and all recorded transactions have actually taken place?

Occurrence Completeness

Existence

Rights and obligations

Q5. Which one of the following statements is NOT true about the internal control system of a company?

Internal control is affected by people working in an organization

Internal control is a process of bringing accuracy and improvements in the systems

Internal control system is expected to provide absolute assurance about the performance of a company Internal control is geared to achieve objectives of financial reporting, compliance and operations

Q6. Which one of the following meetings is considered as a ‘meeting of members'?

General meeting

Board meeting

Management meeting

Employees meeting

Q7. The first auditors of a company are required to hold office till which one of the following events? (Companies Ordinance, 1984)

Board meeting

Completion of one year

First annual general meeting-

Extra ordinary general meeting