MCQ On Auditing

2.

When the auditor is an employee of the organization being audited (auditee), the audit is classified as an ........ quality audit.

Internal
External
Compliance
Both A & B

Correct Answer

A. Internal

Explanation

When the auditor is an employee of the organization being audited, the audit is classified as an internal quality audit. This means that the audit is conducted by someone within the organization, rather than by an external party. Internal audits are typically performed to assess the effectiveness and efficiency of internal controls, identify areas for improvement, and ensure compliance with internal policies and procedures. They provide valuable insights and recommendations for the auditee to enhance their operations and achieve their objectives.

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3.

The most comprehensive type of audit is the ......... system audit, which examines suitability and effectiveness of the system as a whole.

Quantity
Quality
Preliminary
Sequential

Correct Answer

A. Quality

Explanation

A quality system audit is the most comprehensive type of audit as it evaluates the suitability and effectiveness of the system as a whole. This type of audit assesses various aspects such as processes, procedures, documentation, and overall performance to ensure that the system meets the required quality standards. By examining the quality of the system, this audit provides a thorough evaluation of its overall functionality and effectiveness.

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4.

Each of the three parties involved in an audit ......................... plays a role that contributes to its success.

The client, the auditor, and the auditeer
The client, the auditor, and the audite
The client, the moderator, and the auditee
The client, the auditor, and the auditee

Correct Answer

A. The client, the auditor, and the auditee

Explanation

The correct answer is the client, the auditor, and the auditee. In an audit, the client is the organization being audited, the auditor is the independent professional conducting the audit, and the auditee is the individual or department within the client organization that is being audited. Each of these parties has a specific role and responsibility in the audit process, and their collaboration and cooperation are essential for the success of the audit. The client provides the necessary information and access to the auditor, the auditor conducts the audit and assesses the client's compliance or performance, and the auditee is responsible for addressing any findings or recommendations made by the auditor.

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5.

An audit is usually conducted in three steps:(1) A pre-examination or opening meeting with the auditee marks the beginning of the process.(2) involves a suitability audit of the documented procedures against the selected reference standard.(3) the auditor examines in depth the implementation of the quality system

True
False

Correct Answer

A. True

Explanation

An audit is typically conducted in three steps. The first step involves a pre-examination or opening meeting with the auditee to initiate the process. The second step involves a suitability audit of the documented procedures against the selected reference standard. This step ensures that the procedures align with the required standards. The third step involves the auditor examining the implementation of the quality system in detail. This step focuses on how well the quality system is being executed in practice. Therefore, the given statement "An audit is usually conducted in three steps" is true.

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6.

The audit final report should include, at a minimum, the following:(choose the one NOT required)1. Type of audit conducted2. Characteristics of audit3. Identification of involved parties: auditor, auditee, and third party4. Audit team members5. Critical nonconformities and other observations6. Audit standards and reference documents used7. Determination of proper corrective action(s)8. Duration of audit

1
2
4
8

Correct Answer

A. 2

Explanation

The characteristics of the audit are not required to be included in the final report. The other options listed are all necessary components of the audit final report.

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7.

The time required and costs involved in an external audit are much higher as compared to internal audits.

True
False

Correct Answer

A. True

Explanation

External audits are conducted by independent third-party auditors who are not affiliated with the organization being audited. These auditors charge fees for their services, which can be quite high due to their expertise and the thoroughness of their work. Additionally, external audits require more time as the auditors need to familiarize themselves with the organization's operations and financial records. On the other hand, internal audits are conducted by employees within the organization who are already familiar with its operations, resulting in lower costs and less time required. Therefore, it is true that the time required and costs involved in an external audit are much higher compared to internal audits.

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1

8.

Audit is a fact-finding process that compares actual results with

Specified standards and plans
Expected results
Premature results
Preliminary results

Correct Answer

A. Specified standards and plans

Explanation

Audit is a process that involves comparing actual results with specified standards and plans. This means that during an audit, the objective is to verify whether the outcomes achieved align with the predetermined benchmarks and expectations. By examining the actual results against the specified standards and plans, auditors can identify any discrepancies or deviations that may exist. This comparison allows organizations to assess their performance, identify areas for improvement, and ensure compliance with established guidelines. Therefore, the correct answer is "specified standards and plans."

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9.

The ......... is also expected to provide the resources needed and select staff members to accompany the auditors.

Auditor
Client
Internal auditor
Auditee

Correct Answer

A. Auditee

Explanation

The auditee is expected to provide the resources needed and select staff members to accompany the auditors. The auditee is the entity or organization being audited, and they have the responsibility to cooperate with the auditors and facilitate the audit process. They are also responsible for ensuring that the necessary resources are available for the auditors to conduct their work effectively. Additionally, the auditee may choose to have their own internal auditors accompany the external auditors during the audit process.

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10.

For the benefit of the organisation, quality auditing should only report non-conformances and corrective actions, but should not highlight areas of good practice.

True
False

Correct Answer

A. False

Explanation

Quality auditing should not only focus on identifying non-conformances and corrective actions, but also on highlighting areas of good practice within an organization. By acknowledging and promoting areas of good practice, the organization can further improve its overall quality management system and enhance its performance. This approach encourages continuous improvement and recognizes the efforts and achievements of the organization in maintaining high-quality standards. Therefore, the statement that quality auditing should not highlight areas of good practice is false.

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MCQ On Auditing

Various types of quality audits are:

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When the auditor is an employee of the organization being audited (auditee), the audit is classified as an ........ quality audit.

The most comprehensive type of audit is the ......... system audit, which examines suitability and effectiveness of the system as a whole.

Each of the three parties involved in an audit ......................... plays a role that contributes to its success.

The time required and costs involved in an external audit are much higher as compared to internal audits.

Audit is a fact-finding process that compares actual results with

The ......... is also expected to provide the resources needed and select staff members to accompany the auditors.

For the benefit of the organisation, quality auditing should only report non-conformances and corrective actions, but should not highlight areas of good practice.