Correct Answer:
C. Risk assessment and the overall review near the end of the audit
ISA 315 and ISA 520 require analytical procedures in risk assessment and in the overall review; substantive use is optional.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
Under the ISAs, analytical procedures are required to be performed at which stages of the audit?
Related MCQs
The DuPont identity expresses ROE as:
A.
Net profit margin x total asset turnover x equity multiplier
B.
Gross margin x current ratio x debt ratio
C.
Sales / assets only
D.
EPS divided by dividend per share
Correct answer is:
A. Net profit margin x total asset turnover x equity multiplier
Do you agree with this answer?
The tax shield on debt arises because:
A.
Dividends are tax deductible
B.
Debt is risk free
C.
Principal repayments are deductible
D.
Interest is a tax-deductible expense
Correct answer is:
D. Interest is a tax-deductible expense
Do you agree with this answer?
In vertical analysis, each item in a financial statement is expressed as a percentage of:
A.
The same item in the previous year
B.
Industry average
C.
A base figure such as total assets or sales in the same period
D.
Net profit only
Correct answer is:
C. A base figure such as total assets or sales in the same period
Do you agree with this answer?
Fixed costs are Rs. 90,000 and the contribution margin ratio is 30%. The break-even sales value is:
A.
Rs. 270,000
B.
Rs. 300,000
C.
Rs. 120,000
D.
Rs. 900,000
Correct answer is:
B. Rs. 300,000
Do you agree with this answer?
The present value of Rs. 11,000 to be received after 1 year at a discount rate of 10% is:
A.
Rs. 10,000
B.
Rs. 9,900
C.
Rs. 12,100
D.
Rs. 11,000
Correct answer is:
A. Rs. 10,000
Do you agree with this answer?
A major limitation of the payback period method is that it:
A.
Is too complicated to calculate
B.
Uses discounted cash flows
C.
Ignores the time value of money and cash flows after the payback period
D.
Considers all cash flows over the project life
Correct answer is:
C. Ignores the time value of money and cash flows after the payback period
Do you agree with this answer?
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