MCQ for CA Intermediate Audit - Chapter 4 - Risk Assessment and Internal Control

Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 6 - Auditing and Assurance - Chapter 4: Risk Assessment and Internal Control - For Practice relevant for May/November 23 Examinations

Q:1 Internal control system provides reasonable assurance about the achievements of an entity's objectives, except-

  1. Reliability of financial reporting
  2. Safeguarding of assets
  3. Both (a) and (b)
  4. None of these

Answer: D

Q: 2 Due to inherent limitations of internal control system it can provide ________ assurance that its objectives are achieved.

  1. Reasonable
  2. Absolute
  3. Negative
  4. All of these

Answer: 1

Q: 3 Risk arises to inherent limitations of control is known as:

  1. Inherent Risk
  2. Control Risk
  3. Risk of Material Misstatements
  4. Detection Risk

Answer: B

Q:4 A Graphic presentation of internal controls in the organisation and is normally drawn up to show the controls in each section or subsection is known as:

  1. Narrative Records
  2. Check List
  3. Internal Control Questionnaire
  4. Flowchart

Answer: 4

Q:5 The Guidance Note on Audit of Internal Financial Controls over Financial Reporting has been issued by?

  1. ICAI
  2. SEBI
  3. MCA
  4. RBI

Answer: 1

Q:6 SA 315 establishes requirements and provides guidance on identifying and assessing the risks of material misstatement -

  1. at the financial statement levels only.
  2. at the assertion levels only.
  3. at the financial statement and assertion levels.

Answer: 3

Q:7 When more persuasive audit evidence is needed regarding the effectiveness of a control,

  1. it may be appropriate to increase the extent of testing of the control and reduce the extent of the degree of reliance on controls.
  2. it may be appropriate to decrease the extent of testing of the control as well as the degree of reliance on controls.
  3. it may be appropriate to decrease the extent of testing of the control and increase the extent of the degree of reliance on controls.
  4. it may be appropriate to increase the extent of testing of the control as well as the degree of reliance on controls.

Answer: D

Q: 8 Internal check is a check on _______ transactions whereby work carried out by one person is checked by ______.

  1. Unusual; auditor
  2. Unusual; another
  3. Day-to-day; auditor
  4. Day-to-day; another

Answer: 4

Q: 9 Risk arises on account of judgment on part of auditor, test nature of audit and nature of audit evidences collected:

  1. Inherent Risk
  2. Control Risk
  3. Risk of Material Misstatements
  4. Detection Risk


Answer: 4

 

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