Which of the following statements is, generally, correct about the reliability of auditevidence?

A. To be reliable, evidence should conclusive rather than persuasive
B. Effective internal control system provides reliable audit evidence
C. Evidence obtained from outside sources routed through the client
D. All are correct.

Which of the following is not a corroborative evidence?

A. Minutes of meetings
B. Confirmations from debtors
C. Information gathered by auditor through observation
D. Worksheet supporting consolidated financial statements

Which of the following statements is not true with respect to management representations obtained as per AAS­11?

A. Authenticated copy of relevant minutes of meetings may be regarded as management representation
B. It should always be in working
C. It may be dated prior to the report date
D. It should be addressed to the auditor

What would most appropriately describe the risk of incorrect rejection in terms of substantive testing?

A. The auditor concludes balance is materially correct when in actual fact it is not
B. The auditor concludes that the balance is materially misstated when in actual fact it not
C. The auditor has rejected an item for sample which was material
D. None of the above

Which of the following is not a revenue expense?

A. Cost of raising a loan
B. Cost of accessories of motor vehicles spent at the time of purchase
C. Expenses incurred for laying of sewers on land purchased
D. Insurance premium paid at the time of registration of the ship

Depreciation does not arise form _______

A. effluxion of time
B. use
C. obsolescence through technology be market changes
D. remarket expectation

Which of the following will not lead to creation of secret reserve?

A. Undervaluation of closing stock
B. Charging capital expenditure to revenue
C. Goods sent on consignment being shown as actual sales
D. Charging higher rates of depreciation on fixed assets than actually required

Which of the following is a revenue reserve?

A. Capital redemption reserve
B. Security premium account
C. Debenture redemption reserve
D. Capital reserve

If the book value of an asset stands at________per cent of the original cost, a company need not provide depreciation on it.

A. two
B. fifteen
C. five
D. ten

Which of the following expenses should not be treated as capital expenditure?

A. Expenses paid on installation of a plant.
B. Cost of dismantling a building in case a new building is to be constructed on the land
C. Legal expenses incurred to defend a suit related to title of patent.
D. The fees paid to engineer who constructed the plant.