Correct Answer:
A. Cannot obtain sufficient appropriate audit evidence and the possible effects are material and pervasive
If the auditor cannot obtain enough evidence and the possible effects are pervasive, no opinion can be expressed.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
A disclaimer of opinion is given when the auditor:
Related MCQs
A stock split:
A.
Reduces the number of shares
B.
Raises new capital
C.
Distributes cash to shareholders
D.
Increases the number of shares and reduces the price per share without changing total equity
Correct answer is:
D. Increases the number of shares and reduces the price per share without changing total equity
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Working capital management mainly deals with decisions about:
A.
Long-term investment projects
B.
Issuing long-term bonds
C.
Current assets and current liabilities
D.
Mergers only
Correct answer is:
C. Current assets and current liabilities
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An audit to determine whether an entity has followed applicable laws, rules and regulations is called a:
A.
Statutory audit of cash only
B.
Compliance audit
C.
Forensic valuation
D.
Payroll review
Correct answer is:
B. Compliance audit
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A contingency fund is:
A.
A fund kept to meet urgent unforeseen expenditure
B.
A fund for planned salaries
C.
A fund for repayment of loans only
D.
A private fund of officers
Correct answer is:
A. A fund kept to meet urgent unforeseen expenditure
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Professional skepticism means the auditor:
A.
Maintains a questioning mind and critically assesses audit evidence
B.
Assumes management is dishonest
C.
Accepts management explanations without verification
D.
Avoids communicating with management
Correct answer is:
A. Maintains a questioning mind and critically assesses audit evidence
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A transfer price is:
A.
The price charged to external customers
B.
The price of raw materials from suppliers only
C.
The price at which goods or services are transferred between divisions of the same organization
D.
A government-regulated price
Correct answer is:
C. The price at which goods or services are transferred between divisions of the same organization
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