Page 43 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

Part 07-SA 550

550.1 SM23
An auditor finds during course of an audit that the entity has entered into many related party
transactions. Which of the following statements is true?
a) The risk that management may override controls in respect of related party transactions is
lower.

b) The risk that management may override controls in respect of related party transactions is

higher.
c) There is no effect on the risk that management may override controls in respect of related
party transactions.
d) Risk of overriding of controls by management has no relationship at all with related party
transactions.

Part 08-SA 610

610.1 N22M
CA M is internal auditor of Crayon Products Limited. Which of the following is not TRUE about scope

of internal audit?
a) Internal audit is an independent assurance activity.
b) Internal audit helps in improving internal control of the company.
c) Internal audit cannot review non-financial activities of company.
d) Internal audit can review compliance of company with various laws and regulations.

610.2 SM23
Which of the following is not one of functions of internal auditor of an organization?
a) Performing assurance activities
b) Performing consulting activities to improve governance of organization.
c) Performing risk management activities
d) Expressing independent opinion on financial statements of organization

610.3 SM23
Which of the following is false in relation to audit documentation when an external auditor relies
upon work of internal auditor?
a) Evaluation of objectivity and competence of internal auditor has to be documented.

b) Nature of work used and reason for relying upon work used forms part of documentation.
c) Documentation on whether quality control is exercised in internal audit work forms part of
audit documentation.
d) Documentation on what specific recommendations were given by internal auditor for risk
assessment to external auditor forms part of audit documentation.

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