Page 127 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
WN and Associates. A team of seven members was provided to Mr. W for the purpose of helping him in
conducting the audit of Healthy and Talented Private Limited for the financial year 2020-21.

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First team member of team helping Mr. W suggested that they should follow a method, according to
which number of instructions were required to be followed to collect information about internal
control.

The second team member of team helping Mr. W suggested a method in which complete description of
internal control in operation is recorded.

The third team member of team helping Mr. W suggested a method in which internal control of a
company is presented in graphic form.

The fourth team member of team helping Mr. W suggested a method in which a series of questions
were required to be answered which would provide information for internal control.

After analysing all the suggestions Mr. W was satisfied with the suggestion of the third team member
because according to Mr. W the suggestion of third team member was suitable from WN and Associates
point of view and also from the point of view of Healthy and Talented Private Limited. Keeping the basic
concepts of Internal Control in mind, answer the following multiple choice questions:"
I. "In initial stage of conducting audit of Healthy and Talented Private Limited, Mr. W decided to
evaluate internal control of the company. Evaluation of internal control is very important part of:
(a). Audit Report.
(b). Audit Evidence.
(c). Audit Documentation.
(d). Audit Programme."
II. "The first team member of team helping Mr. W suggested a method according to which, number
of instructions were required to be followed to collect information about internal control. This
method is called as :
(a). Flow Chart.
(b). Check List.
(c). Narrative Record.
(d). Questionnaire.
III. "The second team member of team helping Mr. W suggested a method in which complete
description of internal control in operation is recorded. This method is known as :
(a). Narrative Record.
(b). Flow Chart.
(c). Questionnaire.
(d). Check List.
IV. "The third team member of team helping Mr. W suggested a method in which internal control of
company is presented in graphic form. This method of gathering information so that internal
control can be evaluated is known as :
(a). Check List.
(b). Questionnaire.
(c). Flow Chart.
(d). Narrative Record.
V. "The fourth team member of team helping Mr. W suggested a method in which a series of
questions were required to be answered to gather information for internal control. This method
of gathering information so that internal control can be evaluated is called as :
(a). Questionnaire.
(b). Flow Chart.
(c). Narrative Record.
(d). Check List.

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