Internal audit is undertaken:

A. By independent auditor
B. Statutorily appointed auditor
C. By a person appointed by the management
D. By a government auditor

Which of the following statements is not true?

A. Management fraud is more difficult to detect than employee fraud
B. Internal control system reduces the possibility of occurrence of employee fraud and management fraud
C. The auditor’s responsibility for detection and prevention of errors and frauds is similar.
D. All statements are correct.

Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of____________?

A. Error of principle
B. Error of commission
C. Error of omission
D. Error of duplication

Lapping is also known as___________?

A. Teeming and lading
B. Looping
C. Embezzlement
D. Hacking

According to ISA 315, which of the following is NOT a control activity?

A. Performance reviews
B. Physical controls
C. Organizational structure
D. Segregation of duties

According to ISA 315, which of the following is NOT an element of the control environment?

A. Participation of management
B. Information processing
C. Commitment to competence
D. Human resource policies and practices

The degree of effectiveness of an internal control system depends on:

A. The design of the internal control system and the implementation of the controls
B. The design of the internal controls and the implementation of the control system
C. The implementation of the controls and the correctness of the accounting records
D. The design of the internal control system and the correctness of the accounting records

Which of the following is normally the most reliable source of audit evidence?

A. Internal audit
B. Suppliers’ statements
C. Board minutes
D. Analytical review

According to ISA 500, the strength of audit evidence is determined by which two qualities?

A. Appropriateness & competence
B. Sufficiency & appropriateness
C. Reliability & extensiveness
D. Objectivity & independence

Which of the following are you unlikely to see in the current file of auditors’ working papers?

A. Memorandum & articles of association
B. Audit planning memorandum
C. Summary of unadjusted errors
D. Details of the work done on the inventory count