Question 1

Insurance relating to the year 2013-14 was paid in 2012-13 in advance. The same was however booked as expenditure in 2012-13. This does not meet the objective of
A)Existence
B)Ownership
C)Completeness
D)Occurrence

Accepted Answer

The insurance expense was recorded in a period different from when the insurance coverage actually occurred, which violates the principle of occurrence. Occurrence ensures that transactions and events recorded in the financial statements have occurred and pertain to the entity.

Question 2

If some item of revenue expenditure is misclassified as capital expenditure, it can be said that this objective is not met
A)Existence
B)Disclosure
C)Completeness
D)Occurrence

Accepted Answer

Disclosure is not met because the financial statements do not accurately represent the nature of the transactions, leading to a misclassification between revenue and capital expenditure.

Question 3

If the monthly accounts of some Treasuries or Public Works Divisions are excluded from the Accounts of a State Government, it affects this objective
A)Existence
B)Disclosure
C)Completeness
D)Occurrence

Accepted Answer

Excluding monthly accounts from the State Government's records affects the completeness of the financial statements, as it means not all transactions and accounts are being fully reported. Completeness is an objective that ensures all transactions and financial events that should have been recorded are indeed included in the financial statements.

Question 4

A financial audit is intended to give
A)Qualified Assurance
B)Absolute Assurance
C)Positive Assurance
D)None of these

Accepted Answer

The answer of A financial audit is intended to give
A)Qualified...

Question 5

Materiality is classified by
A)Context
B)Nature
C)Value
D)All of these

Accepted Answer

Materiality is classified by context, nature, and value, as all these factors are considered when determining the significance of information in financial reporting and decision-making processes.

Quiz 1: Understanding Financial Audit and Standards for Auditors

Insurance relating to the year 2013-14 was paid in 2012-13 in advance. The same was however booked as expenditure in 2012-13. This does not meet the objective of

If some item of revenue expenditure is misclassified as capital expenditure, it can be said that this objective is not met

If the monthly accounts of some Treasuries or Public Works Divisions are excluded from the Accounts of a State Government, it affects this objective

A financial audit is intended to give

Materiality is classified by