Auditor’s Report And Certificate(Auditing ) Questions and Answers

Question 1.  Audit committee is mandatory for:
  1.    All listed public companies.
  2.    For unlisted companies having paid up of Rs. 10 crores or more
  3.    For unlisted companies having turnover or Rs. 100 crores or more or having outstanding long term payments exceeding Rs. 50 crores or more
  4.    All of the above.
Explanation:-
Answer: Option D. -> All of the above.


Question 2. Audit committee shall constitute minimum __________ 3 directors where independent directors forming majority.
  1.    Three
  2.    Four
  3.    Five
  4.    Six
Explanation:-
Answer: Option A. -> Three


Question 3. The meetings of Audit committee should be _____ in a year.
  1.    Three
  2.    Four
  3.    Five
  4.    Six
Explanation:-
Answer: Option B. -> Four


Question 4. SA 700 stands for:
  1.    True and fair view of the company.
  2.    Forming an opinion and reporting on Financial Statement.
  3.    Qualified report.
  4.    Disclaimer of opinion.
Explanation:-
Answer: Option B. -> Forming an opinion and reporting on Financial Statement.


Question 5. Audit report is meant for the _________ of the company.
  1.    Shareholders
  2.    Creditors
  3.    Employees
  4.    Bankers
Explanation:-
Answer: Option A. -> Shareholders


Question 6. Sec. 143 (12) of the Companies Act state that any ____ of the company has to be reported to central government.
  1.    Fraud by officers or employees.
  2.    Errors in books of account.
  3.    Incomplete books of accounts.
  4.    Qualified report.
Explanation:-
Answer: Option A. -> Fraud by officers or employees.


Question 7. Violation of section 143 (12) imply a fine of Rs. ___ lakh.
  1.    One
  2.    Two
  3.    Three
  4.    Four
Explanation:-
Answer: Option A. -> One


Question 8. An audit report is the final product of audit work by:
  1.    Audit staff.
  2.    Auditor
  3.    Management
  4.    Internal auditor.
Explanation:-
Answer: Option B. -> Auditor


Question 9. Caro 2016 is applicable to the:
  1.    Banking Companies.
  2.    Insurance Companies.
  3.    One person Companies.
  4.    None of the above.
Explanation:-
Answer: Option D. -> None of the above.


Question 10. CARO 2016 is applicable to the following private companies:
  1.    Not a holding or subsidiary of a public company.
  2.    Shareholder’s fund is less than 1 crore.
  3.    Revenue less than or equal to Rs. 10 crores.
  4.    Borrowing more than Rs. 1 crores in any time during financial year.
Explanation:-
Answer: Option D. -> Borrowing more than Rs. 1 crores in any time during financial year.


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