Page 124 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
(c). 40 Lakhs, 20 Lakhs
(d). 60 Lakhs, 30 Lakhs"
V. "Which of the following matter is not required to be inquired by auditor of multi-state co-
operative society under Sec. 73(2) of Multi-State Co-operative Societies Act, 2002:
(a). Whether loans and advances made on the basis of security have been properly secured and
whether the terms on which they have been made are not prejudicial to the interests of the
society or its members;
(b). Whether transactions which are represented merely by book entries are not prejudicial to the
interest of Society;
(c). Whether personal expenses have been charged to revenue account; and
(d). Whether loans and advances shown as deposits."

38
"Sargam Ltd appoints Kishore & Mukesh as statutory auditors for the financial year 2019-2020. Kishore
& Mukesh seem to have different opinions on Audit approach to be adopted for audit of Sargam Ltd.
Kishore wants to check all transactions without exception in order to ensure that nothing is missed from
the scope so as to give them (auditors) reasonable assurance on the coverage of Audit.

On the other hand, Mukesh is of the opinion that 100% checking is not required, and they can rely on
Audit Sampling techniques in order to provide them a reasonable basis on which they can draw
conclusions about the entire population.

Based on above facts, please respond to below queries posed by them as per SA 530."
I. "Sampling risk can lead to two types of erroneous conclusions one of them is when test of control
appears to be more effective than they actually are which affects ________________and is more
likely to lead to an inappropriate audit opinion.
(a). audit efficiency
(b). audit effectiveness
(c). audit quality
(d). none of the above
II. "When auditor decides to select less than 100% of the population for testing, the auditor is said
to be using___________________

(a). Audit sampling
(b). Representative sampling
(c). Test Checking
(d). Internal Audit
III. "Tolerable error is _______________ in population that auditor is willing to _______________ for
a given sample size.
(a). Minimum, Forego
(b). Maximum, Forego
(c). Minimum, Accept
(d). Maximum, Accept
IV. "The application of audit sampling is such that all sampling units have a chance of selection in
order to draw conclusion about the _______.
(a). Entire population
(b). Selective population
(c). Audited population
(d). Universe
V. "____________________ is a method of audit testing which is more scientific than testing based
entirely on the auditor’s own judgement because it involves use of mathematical laws of
probability in determining the appropriate sample size.
(a). Statistical Sampling
(b). Non statistical Sampling

www.auditguru.in 118 | P a g e