The primary objective of auditing is to ascertain the ___ of financial statements.

Reliability

True or False: Auditing is only necessary for large corporations according to the Companies Act.

False. Auditing is important for all types of organizations, including small businesses and non-commercial entities.

Fill in the blank: Auditing aims to detect and prevent ___ in financial statements.

Fraud

What role does auditing play in relation to creditors?

Auditing assures creditors' confidence.

• Enhances trust in finances.

• Supports informed credit decisions.

• Mitigates lending risk for creditors.

True or False: The internal audit is conducted exclusively by external auditors.

False. Internal audits are conducted by the organization's own staff.

Fill in the blank: The process of examining documentary evidence to confirm the accuracy of entries in financial records is known as ___.

Vouching

What is the significance of the duty to comply with auditing standards?

Compliance with auditing standards ensures the quality and integrity of the audit process, enhancing the reliability of financial statements.

Fill in the blank: Auditors are entitled to fair ___ for their services rendered.

Remuneration

What is the difference between an interim audit and a final audit?

An interim audit is conducted between two annual audits, while a final audit is performed at the end of the financial year.

True or False: An auditor has the right to access only select financial documents during an audit.

False. An auditor has the right to access all books of accounts necessary for a thorough audit.

What is the purpose of an audit programme?

The audit programme serves as a structured plan outlining the steps to be taken to form an opinion on financial statements.

Fill in the blank: The examination of accounts by the internal staff of a business is referred to as ___ audit.

Internal

What are the qualities essential for an effective auditor?

Key qualities for effective auditors

• Qualified chartered accountants are essential.

• Comprehensive accountancy knowledge is crucial.

• Integrity and confidentiality are vital traits.

Fill in the blank: A secretarial audit focuses on verifying compliance with provisions of the ___ Act.

Companies

What is the objective of a cost audit?

The objective of a cost audit is to ensure the accuracy of cost accounts and adherence to cost accounting plans.

True or False: The auditor’s duty to exercise professional judgment is not critical to the audit process.

False. Exercising professional judgment is crucial for ensuring the accuracy and integrity of the audit.

Fill in the blank: Verification involves confirming the ___, valuation, and existence of items on a balance sheet.

Ownership

What are the rights of an auditor regarding legal and technical advice?

Auditors have the right to seek legal and technical advice to ensure accuracy and compliance during the audit process.

What is the role of auditing in preventing errors within financial statements?

Auditing ensures accurate financial statements.

• Identifies discrepancies in records.

• Enhances financial reporting reliability.

• Promotes stakeholder confidence.

Fill in the blank: The process of determining the precise value of an asset based on its utility is known as ___.

Valuation

What does the auditor need to obtain from the company according to section 143 (3)?

The auditor must obtain all necessary information and explanations for the audit and verify the maintenance of required books of accounts.

The main objective of auditing is to ascertain the ___ of financial statements.

Reliability