B.Com. (Financial Management) SEM V 2023 2024 Dec 2024 AUDITING I Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 A. Fill in the blanks by choosing the appropriate options. (Any 8) 8M
   • 1) forgets to record the payment of rent for the current month. What type of error is
   • A. error of omission
   • B. error of commission
   • C. error of principle
   • D. none of the above
   • 2) is fraud that involves theft of an entity’s assets
   • A. manipulation of records
   • B. asecret reserve
   • C. misappropriation of assets
   • D. income smoothing
   • 3) What is the primary purpose of an audit program in the auditing process?
   • A. To prepare financial statements
   • B. To detect fraud
   • C. To plan and manage the audit
   • D. To issue an audit opinion
   • 4) What is the primary objective of an external audit?
   • A. To prepare financial statements
   • B. To detect fraud
   • C. To express an opinion on the fairness of financial statements
   • D. To provide consulting services to the client
   • 5) Auditing standards are a set of guidelines and principles that follow when conducting
   • A. auditors
   • B. Employees
   • C. Management
   • D. Central Government
   • 6) Current file and permanent file together are known as
   • A. audit plan
   • B. audit programme
   • C. audit procedures
   • 7) What is "window dressing" in accounting?
   • A. Decorating the office windows for a better aesthetic appeal
   • B. Manipulating financial statements to present a more favorable picture
   • C. Updating software for improved data visualization
   • D. Conducting an external audit for transparency
   • 8) Who appoints a statutory auditor in a company?
   • A. Shareholders
   • B. Board of Directors
   • D. Regulatory authorities
   • 9) To select a sample for audit, the auditor should consider
   • A. the size of the sample
   • B. the volume of transaction
   • C. adequacy of internal control system
   • D. all of the above
   • 10) Letter of weakness deals with weakness in
   • A. statutory audit
   • B. internal controls
   • C. financial position
   • D. none of the above
   • B. State whether the following statements are true or false. (Any 7) 7M
   • 1) Frauds are bonafide in nature
   • 2) There is not much difference between test check & internal check
   • 3) Current Audit File is nothing but a temporary audit file
   • 4) The concept of independence is not crucial for auditors
   • 5) Confirmation is an audit technique used to verify the existence of assets held by third parties
   • 6) An audit programme may be fixed or flexible
   • 7) During vouching, auditors select items from the financial statements and trace them back to the
   • 8) Interim audit is also known as annual audit
   • 9) Internal auditors are typically employees of the organization they audit
   • 10) Test Checking does not reduce the auditor's liability
2. Q2 a. Explain the basic principles of auditing. 8 M
   • b. Elaborate on inherent limitations of audit. 7M
3. Q2 p. What is a Continuous Audit? Explain Continuous Audit along with its advantages. 8M
   • q. Write a note on Final Audit. 7M
4. Q3 What is an audit programme? Explain its merits and demerits. 15M
5. Q3 p. Write a note on Audit Working Papers. 8 M
   • q. Elaborate on Audit Planning. 7M
6. Q4 a. What is meant by test checking? Explain the precautions to be taken while doing test
   • b. What is audit sampling? Explain methods of selecting sample items. 7M
7. Q4 p. Explain the duties of the auditor towards internal control. 8 M
   • q. Explain internal control for debtors. 7M
8. Q5 a. Distinguish Between internal audit and external audit. 8M
   • b. What is meant by internal audit? Explain the usefulness of internal audits. 7M
9. Q5 Short notes. (Any 3) 15M Concept of true and fair view
   • q. Interim audit
   • r. Window dressing
   • s. Types of errors
   • t. Routine checking

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