Correct Answer:
C. Inspecting purchase orders for evidence of authorization signatures
Tests of controls check the operating effectiveness of controls, such as evidence of approval.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
Which of the following is a test of controls?
Related MCQs
The cost of a machine bought last year and already paid for is, in a new investment decision:
A.
A relevant cash outflow
B.
A future opportunity cost
C.
Added to the project cost
D.
A sunk cost and ignored
Correct answer is:
D. A sunk cost and ignored
Do you agree with this answer?
The Auditor-General of Pakistan is appointed by:
A.
The Prime Minister
B.
The Chief Justice
C.
The Speaker of the National Assembly
D.
The President
Correct answer is:
D. The President
Do you agree with this answer?
A by-product is a product that:
A.
Has the greatest sales value of all products
B.
Is produced after the split-off by choice
C.
Cannot be sold
D.
Has a relatively minor sales value compared with the main product
Correct answer is:
D. Has a relatively minor sales value compared with the main product
Do you agree with this answer?
Under the imprest system of petty cash, the petty cash is:
A.
Never reimbursed
B.
Kept without a limit
C.
Reimbursed periodically to restore it to a fixed amount
D.
Recorded only in the ledger
Correct answer is:
C. Reimbursed periodically to restore it to a fixed amount
Do you agree with this answer?
Pakistan Investment Bonds (PIBs) are:
A.
Short-term overnight instruments
B.
Shares of the State Bank
C.
Foreign currency notes
D.
Medium to long-term government debt securities
Correct answer is:
D. Medium to long-term government debt securities
Do you agree with this answer?
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
Do you agree with this answer?
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