Q.1 Which type of audit is conducted to ensure compliance with laws and regulations?
Statutory Audit
Internal Audit
Tax Audit
Compliance Audit
Explanation - A compliance audit examines whether an organization is following external laws, regulations, and internal policies.
Correct answer is: Compliance Audit
Q.2 An audit conducted by the company's own employees to improve efficiency and internal controls is called:
Internal Audit
Statutory Audit
Cost Audit
Forensic Audit
Explanation - Internal audits are carried out by the organization's staff to evaluate internal processes and risk management.
Correct answer is: Internal Audit
Q.3 Which audit specifically verifies the accuracy of tax computations and compliance with tax laws?
Internal Audit
Tax Audit
Statutory Audit
Management Audit
Explanation - Tax audits examine the correctness of tax filings and adherence to tax laws.
Correct answer is: Tax Audit
Q.4 A statutory audit is required by law for:
Private companies only
Public companies and certain organizations
Sole proprietors
Internal management purposes
Explanation - Statutory audits are mandated by law for public companies and certain organizations to ensure accurate financial reporting.
Correct answer is: Public companies and certain organizations
Q.5 Which type of audit focuses on the efficiency and effectiveness of management rather than financial records?
Management Audit
Cost Audit
Statutory Audit
Internal Audit
Explanation - Management audits evaluate managerial performance, decision-making, and efficiency of operations.
Correct answer is: Management Audit
Q.6 Cost Audit is primarily concerned with:
Checking tax returns
Verifying financial statements
Examining cost accounts and cost efficiency
Investigating fraud
Explanation - Cost audits verify the accuracy of cost accounts and assess cost control and efficiency.
Correct answer is: Examining cost accounts and cost efficiency
Q.7 Forensic Audit is mainly used to:
Improve internal controls
Detect and prevent fraud
Ensure tax compliance
Check statutory obligations
Explanation - Forensic audits investigate fraud, financial misconduct, or legal disputes.
Correct answer is: Detect and prevent fraud
Q.8 Which audit is often conducted for government departments and organizations receiving public funds?
Statutory Audit
Government Audit
Internal Audit
Management Audit
Explanation - Government audits ensure public funds are properly used and financial records are accurate.
Correct answer is: Government Audit
Q.9 Social Audit is conducted to:
Check social media accounts
Verify corporate social responsibility activities
Audit employee behavior
Examine tax payments
Explanation - Social audits assess whether organizations are fulfilling their social responsibilities and ethical obligations.
Correct answer is: Verify corporate social responsibility activities
Q.10 Which audit type is usually voluntary and performed at the request of management?
Internal Audit
Statutory Audit
Management Audit
Tax Audit
Explanation - Management audits are often requested by management to improve efficiency and decision-making.
Correct answer is: Management Audit
Q.11 An audit conducted to assess environmental policies and compliance is called:
Environmental Audit
Internal Audit
Compliance Audit
Cost Audit
Explanation - Environmental audits evaluate compliance with environmental laws and the impact of operations on the environment.
Correct answer is: Environmental Audit
Q.12 Which type of audit examines financial information for accuracy and fairness as per accounting standards?
Internal Audit
Statutory Audit
Tax Audit
Management Audit
Explanation - Statutory audits verify the financial statements of a company to ensure they present a true and fair view.
Correct answer is: Statutory Audit
Q.13 Audit of accounts of banks, insurance companies, and other financial institutions falls under:
Internal Audit
Statutory Audit
Specialized Audit
Tax Audit
Explanation - Certain organizations like banks and insurance companies require specialized audits due to unique operations.
Correct answer is: Specialized Audit
Q.14 Which audit type is most concerned with verifying whether funds are used for the intended purpose?
Compliance Audit
Financial Audit
Internal Audit
Performance Audit
Explanation - Performance audits evaluate whether resources are used efficiently, economically, and effectively for intended goals.
Correct answer is: Performance Audit
Q.15 Audit carried out by an independent professional to satisfy legal requirements is called:
Internal Audit
Statutory Audit
Management Audit
Forensic Audit
Explanation - Statutory audits are performed by external auditors to meet legal obligations and ensure reliability of financial statements.
Correct answer is: Statutory Audit
Q.16 Which type of audit helps an organization detect mismanagement and improve decision-making?
Management Audit
Tax Audit
Statutory Audit
Environmental Audit
Explanation - Management audits evaluate policies, procedures, and management efficiency to improve overall decision-making.
Correct answer is: Management Audit
Q.17 A continuous audit conducted throughout the year to monitor operations is called:
Continuous Audit
Internal Audit
Statutory Audit
Tax Audit
Explanation - Continuous audits involve ongoing review of records and operations, rather than periodic checks.
Correct answer is: Continuous Audit
Q.18 Which audit is performed to verify the accuracy of payroll, wages, and employee benefits?
Payroll Audit
Internal Audit
Tax Audit
Cost Audit
Explanation - Payroll audits ensure salaries, benefits, and deductions are accurate and comply with legal requirements.
Correct answer is: Payroll Audit
Q.19 Which audit type is aimed at evaluating operational efficiency and effectiveness without focusing on financial records?
Operational Audit
Internal Audit
Statutory Audit
Tax Audit
Explanation - Operational audits focus on evaluating processes, efficiency, and effectiveness of operations rather than financial statements.
Correct answer is: Operational Audit
Q.20 An audit undertaken to ensure adherence to safety regulations and labor laws is called:
Safety Audit
Internal Audit
Statutory Audit
Environmental Audit
Explanation - Safety audits review compliance with workplace safety rules and labor regulations.
Correct answer is: Safety Audit
Q.21 Which audit type is most suitable for identifying fraud and financial misappropriation?
Forensic Audit
Internal Audit
Statutory Audit
Tax Audit
Explanation - Forensic audits specialize in detecting and investigating fraud, embezzlement, or financial crimes.
Correct answer is: Forensic Audit
Q.22 Audit focusing on verifying the use of grants and donations by non-profit organizations is called:
Grant Audit
Internal Audit
Compliance Audit
Management Audit
Explanation - Grant audits check that funds provided as grants are used according to terms and conditions.
Correct answer is: Grant Audit
Q.23 Which audit examines whether the financial reporting complies with accounting standards and practices?
Statutory Audit
Internal Audit
Management Audit
Operational Audit
Explanation - Statutory audits ensure that financial statements comply with recognized accounting standards.
Correct answer is: Statutory Audit
Q.24 Audit type that assesses the organization's social, ethical, and environmental responsibilities is called:
Social Audit
Compliance Audit
Internal Audit
Financial Audit
Explanation - Social audits evaluate ethical conduct, social responsibility, and environmental impact of an organization.
Correct answer is: Social Audit
Q.25 Which audit is generally performed before mergers, acquisitions, or investments to evaluate financial health?
Due Diligence Audit
Internal Audit
Statutory Audit
Tax Audit
Explanation - Due diligence audits assess financial, operational, and legal aspects before major business transactions.
Correct answer is: Due Diligence Audit