Topic / 35 questions

Introduction to Auditing MCQs

Introduction to Auditing MCQs cover the basic principles of auditing, including audit evidence, materiality, working papers, audit risk and types of audit. They suit B.Com, ACCA and CA foundation students and job-seekers for accounts and banking posts. Every question shows its answer instantly, so you can test auditing concepts quickly and revise any weak areas.

Question 01 Introduction to Auditing

Concurrent audit forms part of which system?

Correct answer B. Internal audit system

Open question

Question 02 Introduction to Auditing

Audit in depth is another name for which kind of audit?

Correct answer A. Detailed audit

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Question 03 Introduction to Auditing

In which year was the Institute of Chartered Accountants of Pakistan established?

Correct answer A. 1961

Open question

Question 04 Introduction to Auditing

Which statement about a continuous audit is NOT true?

Correct answer C. It is needed when the organization has a good internal control system

Open question

Question 05 Introduction to Auditing

By whom is internal check carried out?

Correct answer B. Members of the staff

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Question 06 Introduction to Auditing

What kind of errors are errors of omission?

Correct answer B. Technical errors

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Question 07 Introduction to Auditing

What does window dressing imply?

Correct answer A. Overvaluation of assets

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Question 08 Introduction to Auditing

What does test checking refer to?

Correct answer D. Checking of selected number of transactions

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Question 09 Introduction to Auditing

Which statement about materiality is not correct?

Correct answer A. At the planning stage, the auditor considers materiality at the financial statement level only

Open question

Question 10 Introduction to Auditing

Which words complete the statement: the audit risk, the materiality and the audit effort?

Correct answer A. Lower, Higher, Lower

Open question

Question 11 Introduction to Auditing

Before issuing an unqualified opinion, what should the auditor evaluating the audit findings be satisfied of?

Correct answer D. The estimate of total likely misstatement is less than the materiality level

Open question

Question 12 Introduction to Auditing

What should NOT be considered when determining the level of materiality for an audit?

Correct answer B. The auditor’s remuneration

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Question 13 Introduction to Auditing

What do analytical procedures used at the planning stage of an audit generally achieve?

Correct answer D. All of the above

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Question 14 Introduction to Auditing

Which statement is most closely associated with analytical procedures applied at the substantive stage?

Correct answer D. It helps to accumulate evidence supporting the validity of a specific account balance

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Question 15 Introduction to Auditing

What does verification mean in auditing?

Correct answer C. Examining the physical existence and valuation of assets.

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Question 16 Introduction to Auditing

At what value should stock be valued?

Correct answer B. Cost or market price, whichever is lower

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Question 17 Introduction to Auditing

At what value are floating (current) assets shown?

Correct answer A. Cost or market price whichever is lower

Open question

Question 18 Introduction to Auditing

How should goods sent out on a ‘sale or return’ basis be treated?

Correct answer A. They should be included in the stock

Open question

Question 19 Introduction to Auditing

Which of the following is NOT corroborative evidence?

Correct answer B. Worksheet supporting consolidated financial statements

Open question

Question 20 Introduction to Auditing

Who prepares the audit programme?

Correct answer B. The auditor and his audit assistants

Open question

About Introduction to Auditing MCQs

This Auditing topic introduces how an auditor gathers and judges evidence before giving an opinion on financial statements. Questions cover the reliability of audit evidence, where evidence from independent external sources is generally stronger than internal evidence, the risk of incorrect rejection in substantive testing, the advantages of working papers, and the concept of materiality. You will also meet practical items, such as how goods sent on sale or return basis should be treated at year end, and the place of concurrent audit within internal audit systems. These ideas form the base for advanced auditing papers.

Exams that include Introduction to Auditing MCQs

Pakistan

FPSC
PPSC
Banking job tests
Lecturer tests

India

UGC NET
IBPS PO
Campus placements

Bangladesh

BCS
Bank job exams
Bangladesh Bank recruitment

Frequently asked questions

What is materiality in auditing?

Materiality means that a misstatement or omission matters if it could reasonably influence the economic decisions of users of the financial statements. Auditors set materiality levels using professional judgement, considering both the size and the nature of an item, not just a fixed percentage.

Which audit evidence is generally most reliable?

Evidence obtained directly by the auditor, or from independent sources outside the entity, is generally more reliable than evidence produced inside the entity. Written evidence is usually stronger than oral explanations, and original documents are stronger than photocopies.

How many Introduction to Auditing MCQs are on MCQs360?

MCQs360 has 35 Introduction to Auditing MCQs, each with an instant answer. Practice is free and needs no sign-up, so you can revise evidence, materiality and audit risk before accounts officer, banking or lecturer tests.

Last reviewed October 2026