Topic / 21 questions

Audit Evidence MCQs

Audit Evidence MCQs cover the information auditors collect to support their opinion on financial statements, including its sufficiency, appropriateness and the substantive procedures used to obtain it. They help commerce and accounting students, audit trainees and finance job applicants. Every question shows its correct answer instantly, so you can check each auditing concept.

Question 01 Audit Evidence

Physical inspection of a tangible fixed asset provides strong audit evidence mainly about which assertion?

Correct answer D. Existence

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Question 02 Audit Evidence

Tracing transactions from source documents forward into the accounting records mainly tests which assertion?

Correct answer A. Completeness

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Question 03 Audit Evidence

Which of the following is generally the most reliable form of audit evidence?

Correct answer A. A bank confirmation received directly by the auditor

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Question 04 Audit Evidence

Which International Standard on Auditing deals with audit evidence?

Correct answer B. ISA 500

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Question 05 Audit Evidence

Evaluating financial information by studying plausible relationships between financial and non-financial data is known as what?

Correct answer D. Analytical procedures

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Question 06 Audit Evidence

What is the examination of documentary evidence, such as invoices and receipts, supporting entries in the books called?

Correct answer A. Vouching

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Question 07 Audit Evidence

When an auditor independently carries out a control that was originally performed by the client’s staff, what is the procedure called?

Correct answer B. Reperformance

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Question 08 Audit Evidence

Checking the arithmetical accuracy of documents or records, such as re-adding an invoice, is known as which audit procedure?

Correct answer A. Recalculation

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Question 09 Audit Evidence

Which audit procedure involves obtaining a written reply directly from a third party, such as a customer confirming the balance it owes?

Correct answer D. External confirmation

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Question 10 Audit Evidence

An auditor watches the client’s staff carry out the year-end stock count. Which audit procedure is this?

Correct answer A. Observation

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Question 11 Audit Evidence

Which of the following is the least persuasive type of audit evidence?

Correct answer D. Carbon copies of sales invoices inspected by the auditor

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Question 12 Audit Evidence

In an audit of financial statements, what are substantive tests?

Correct answer B. They may be tests of transactions, tests of balances and analytical procedures

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Question 13 Audit Evidence

How are the nature, timing and extent of substantive procedures related to the assessed level of control risk?

Correct answer C. Directly

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Question 14 Audit Evidence

Which statement about the reliability of audit evidence is generally correct?

Correct answer D. Effective internal control system provides reliable audit evidence

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Question 15 Audit Evidence

When is audit evidence generally considered sufficient?

Correct answer C. When it is enough to provide a basis for giving reasonable assurance regarding truthfulness

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Question 16 Audit Evidence

Which of the following is NOT corroborative evidence?

Correct answer B. Worksheet supporting consolidated financial statements

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Question 17 Audit Evidence

Which of the following affect audit effectiveness?

Correct answer D. Both A and C

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Question 18 Audit Evidence

Which statement about management representations obtained under AAS 11 is NOT true?

Correct answer D. It should always be in writing

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Question 19 Audit Evidence

In substantive testing, what best describes the risk of incorrect rejection?

Correct answer C. The auditor concludes a balance is materially misstated when in fact it is not

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Question 20 Audit Evidence

In substantive audit testing, what best describes the risk of incorrect acceptance?

Correct answer C. The auditor has ascertained that the balance is materially correct when in actual fact it is not

Open question

About Audit Evidence MCQs

Questions in this set examine how auditors plan and judge evidence. You will find items on the inverse link between assessed control risk and the nature, timing and extent of substantive procedures, and on which types of evidence are least persuasive, such as oral explanations from management. Other questions cover management representations under auditing standards, factors affecting audit effectiveness, the purpose of substantive tests, and sampling risks: incorrect rejection, which affects efficiency, and incorrect acceptance, which affects effectiveness. These topics feature in auditing papers and finance recruitment tests.

Exams that include Audit Evidence MCQs

Pakistan

PPSC Lecturer tests
FPSC
Banking job tests

India

UGC NET
IBPS PO
State PSC exams

Bangladesh

Bank job exams
BCS

Frequently asked questions

What makes audit evidence reliable?

Audit evidence is generally more reliable when it comes from independent external sources, is obtained directly by the auditor, exists in documentary form, and when the client's internal controls are effective. Oral explanations from management are usually the least persuasive form of evidence.

What is the difference between the risk of incorrect acceptance and incorrect rejection?

The risk of incorrect acceptance is concluding a balance is fairly stated when it is materially misstated, which reduces audit effectiveness. The risk of incorrect rejection is concluding a balance is misstated when it is fair, which reduces efficiency because extra work is done.

Last reviewed October 2026