CA Intermediate Paper 5

Audit Evidence MCQ

Chapter 4 • 29 Questions from ICAI Study Material

Questions

29

Est. Time

44 min

Source

ICAI Book

Sample Questions: Audit Evidence

Preview 4 of 29 questions from Chapter 4

1. 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 ✓

2. 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.

3. Which of the following is not an objective of a company’s policies for ensuring “internal financial controls”?

A) Efficient conduct of business
B) Safeguarding of assets
C) Prevention and detection of frauds and errors
D) Assessing audit risk ✓
Correct/Incorrect

4. Purchase invoice is an example of internal evidence.

Correct
Incorrect ✓

Explanation: Internal evidence is the evidence that originates within the client’s organisation. Since purchase invoice originates outside the client’s organisation, therefore, it is an example of external evidence.