Page 23 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

315. 31 N23M
During the audit of sales, the auditor found that recorded sales represent goods which were ordered
by valid customers and were dispatched and invoiced in the period. The auditor is addressing which
of the following assertions:
a) Occurrence
b) Measurement
c) Cut-off
d) Accuracy

315.32 N23M
ABC Ltd is engaged in manufacturing of fabrics from yarn purchased from different suppliers.
Occasionally, it also manufactures fabrics tailor made in accordance with requirements of certain
mills from yarn received from these mills. ABC Ltd raises bills of its labour charges only on mills for
converting yarn into fabrics. The auditor of ABC Ltd tries to ensure that stocks of the company as at
year end do not include stocks pertaining to these mills. Which assertion auditor tries to verify in
above situation:

a) completeness
b) Occurrence
c) rights and obligations
d) cut -off

Part 2 - ICS

INTERNAL CONTROL SYSTEM

ICS.1 M19R
The management of Magoo Ltd. has developed a strong internal control in its accounting system in
such a way that the work of one person is reviewed by another. Since no individual employee is
allowed to handle a task alone from the beginning to the end, the chances of early detection of
frauds and errors are high. CA. Olive has been appointed as an auditor of the company for current
Financial Year 2017-18. Before starting the audit, she wants to evaluate the internal control system
of Magoo Ltd. To facilitate the accumulation of the information necessary for the proper review and
evaluation of internal controls, CA. Olive decided to use internal control questionnaire to know and
assimilate the system and evaluate the same. Which of the following questions need not be framed
under internal control questionnaire relating to purchases?
a) Are authorized signatories for purchases limited to elected officials?
b) Are payments approved only on original invoices?
c) Does authorized officials thoroughly review the documents before signing cheques?
d) Are monthly bank reconciliations implemented for each and every bank accounts of the
company?

ICS.2 #Unique SM21
Controls can be related to an assertion _______
a) directly
b) indirectly
c) directly or indirectly
d) none of the above

ICS.3 SM21
Control activities, whether within IT or manual systems, have various objectives and are applied at
various organisational and functional levels. Which of the following is an example of control
activities?
a) Authorization

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