Auditing Quiz

What is the origin of the term 'audit'?

• Derived from the Latin term 'audire,' meaning to see

• Derived from the Latin term 'audire,' meaning to hear

• Derived from the Greek term 'auditikos,' meaning to read

• Derived from the Greek term 'auditikos,' meaning to write

What is the primary objective of an auditor?

• To detect and prevent frauds

• To prepare the budget of the organization

• To detect and prevent errors

• To express his opinion on financial statements

What is the main purpose of window dressing in financial statements?

• To reduce tax liability

• To provide a true and clear picture of the business

• To manipulate the data and deceive stakeholders

• To hide abnormal profits

What is the meaning of secret reserve in auditing?

• Part of profits kept aside for future use

• A reserve to attract potential investors

• A reserve that appears in the balance sheet

• A reserve to over-state profitability

What is the primary duty of an auditor in audit reporting?

• To prepare the budget of the organization

• To maintain secrecy from others about the affairs of his client

• To express his opinion on financial statements

• To manipulate the financial data

What is the main advantage of auditing for taxation purposes?

• To detect and prevent errors

• To increase the morale of the staff

• To submit audited accounts for claims

• To safeguard the interest of owners

What is the main disadvantage of auditing related to deeply laid frauds?

• No assurance about future profitability

• Not possible to detect if fraud done with proper planning

• Dependence on others for auditing

• Conflict with others in the organization

What is the difference between accounting and auditing in terms of errors?

• An accountant does not go beyond books of accounts, an auditor goes beyond

• An accountant commits errors & frauds, an auditor cannot afford to

• An accountant is an independent professional, an auditor is an employee

• An auditor submits a report, an accountant does not

What is the basic principle of auditing?

• Tactful

• Courageous

• Knowledge Of business law & taxation law

• Professionally Competent

What is the main objective of window dressing in financial statements?

• To hide abnormal profits

• To present better financial and liquidity position of the business

• To manipulate the data and deceive stakeholders

• To reduce tax liability