Strengthen your JKSSB FAA 2026 preparation with these important Financial Audit MCQs by Exam Waves. The questions cover key areas such as types of audit, audit procedures, auditor’s opinions, statutory audit, interim audit, and investigation to help you revise the topic quickly and effectively.
Q1. Consider the following statements regarding the meaning and origin of Audit:
- The word “Audit” is derived from the Latin word “Audire”.
- The word “Audire” means “to hear”.
- Audit is the evaluation of an organisation’s financial reports.
- An Auditor is a person who performs an audit.
Which of the statements given above are correct?
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer: D
Q2. Consider the following statements regarding the purpose of Financial Audit:
- Financial Audit gives financial information to shareholders and investors.
- It involves the evaluation of an organisation’s financial reports.
- An Auditor performs the audit.
- Financial Audit is concerned only with evaluating employees’ daily activities.
Which of the statements given above are correct?
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer: B
Q3. Consider the following statements regarding Internal and External Auditing:
- Internal Auditing is done within an organisation.
- Internal Auditing is less reliable.
- Internal Auditing is done for the evaluation of activities of employees.
- External Audit is an independent and reliable audit.
Which of the statements given above are correct?
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer: D
Q4. Which of the following correctly represents the procedure of Audit as given in the material?
A) Planning → Internal Control → Testing → Reporting
B) Internal Control → Planning → Reporting → Testing
C) Testing → Planning → Internal Control → Reporting
D) Planning → Testing → Reporting → Internal Control
Answer: A
Q5. Match List-I with List-II regarding Auditor’s Opinion:
| List-I | List-II |
|---|---|
| A. Unqualified Opinion | 1. Financial Statements are presented fairly |
| B. Qualified Opinion | 2. Partly accepted except for a material misstatement |
| C. Adverse Report | 3. Financial Statements are not presented fairly |
| D. Disclaimer of Opinion | 4. Auditor explains reasons for withholding an opinion |
Select the correct answer using the code given below:
A) A-1, B-2, C-3, D-4
B) A-2, B-1, C-4, D-3
C) A-3, B-4, C-1, D-2
D) A-4, B-3, C-2, D-1
Answer: A
Q6. Consider the following statements regarding Unqualified and Qualified Opinions:
- An Unqualified Opinion means that Financial Statements are presented fairly.
- A Qualified Opinion indicates that the statements are partly accepted.
- A Qualified Opinion may contain an exception for a material misstatement.
- An Unqualified Opinion means that Financial Statements are not presented fairly.
Which of the statements given above are correct?
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer: B
Q7. Consider the following statements regarding Adverse Report and Disclaimer of Opinion:
- An Adverse Report is given when Financial Statements are not presented fairly.
- Under a Disclaimer of Opinion, the Auditor withholds an opinion.
- Under a Disclaimer of Opinion, the Auditor explains the reasons for withholding the opinion.
- An Adverse Report means that Financial Statements are presented fairly in all respects.
Which of the statements given above are correct?
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer: B
Q8. Match the following types of Audit with their characteristics:
| Type of Audit | Characteristic |
|---|---|
| A. Interim Audit | 1. Conducted twice a year |
| B. Statutory Audit | 2. Required by law |
| C. Internal Audit | 3. Conducted within the organisation |
| D. External Audit | 4. Independent and reliable |
Select the correct answer:
A) A-1, B-2, C-3, D-4
B) A-2, B-3, C-4, D-1
C) A-3, B-4, C-1, D-2
D) A-4, B-1, C-2, D-3
Answer: A
Q9. Consider the following statements regarding Investigation:
- Investigation is a critical examination.
- It is performed for a specific purpose.
- Detection of fraud can be a purpose of Investigation.
- Investigation is described as an optional exercise in the given material.
Which of the statements given above are correct?
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer: D
Q10. Consider the following pairs related to Financial Audit:
- Interim Audit — Conducted twice a year
- Statutory Audit — Required by law
- External Audit — Independent and reliable
- Investigation — Critical examination performed for a specific purpose
Which of the pairs given above are correctly matched?
A) 1 and 2 only
B) 1, 2 and 3 only
C) 2, 3 and 4 only
D) 1, 2, 3 and 4
Answer: D
