Correct Answer:
C. Self-review threat
Auditing one's own work creates a self-review threat.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
An auditor who prepares the client’s accounting records and then audits them faces which threat?
Related MCQs
Vouching, which starts from the accounting records and traces back to supporting documents, is mainly used to test for:
A.
Overstatement (occurrence/existence)
B.
Understatement (completeness)
C.
Classification of liabilities
D.
Going concern doubts
Correct answer is:
A. Overstatement (occurrence/existence)
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Kaizen costing focuses on:
A.
A one-time large cost cut during design
B.
Continuous small cost reductions during the manufacturing stage
C.
Increasing prices every year
D.
Ignoring costs after production begins
Correct answer is:
B. Continuous small cost reductions during the manufacturing stage
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Market price per share is Rs. 90 and EPS is Rs. 6. The price-earnings (P/E) ratio is:
A.
0.067
B.
540
C.
96
D.
15
Correct answer is:
D. 15
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A machine costs Rs. 100,000, has a residual value of Rs. 10,000 and a useful life of 5 years. Annual straight-line depreciation is:
A.
Rs. 18,000
B.
Rs. 20,000
C.
Rs. 22,000
D.
Rs. 90,000
Correct answer is:
A. Rs. 18,000
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Fixed costs are Rs. 60,000, selling price is Rs. 50 per unit and variable cost is Rs. 30 per unit. The break-even point in units is:
A.
3,000 units
B.
2,000 units
C.
1,200 units
D.
6,000 units
Correct answer is:
A. 3,000 units
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The main objective of government accounting is to:
A.
Maximize profit for the government
B.
Reduce the number of audits
C.
Provide accountability and stewardship over public resources
D.
Help private firms prepare tax returns
Correct answer is:
C. Provide accountability and stewardship over public resources
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