Correct Answer:
D. Management and those charged with governance
The auditor obtains reasonable assurance but primary responsibility lies with management and those charged with governance.
November 13, 2026 · Accounting and Finance MCQs, Auditing MCQs
Who has primary responsibility for the prevention and detection of fraud?
Related MCQs
An unmodified (clean) audit opinion means that the financial statements:
A.
Are completely free of any error
B.
Prove that the entity is financially strong
C.
Give a true and fair view or present fairly, in all material respects
D.
Have been prepared by the auditor
Correct answer is:
C. Give a true and fair view or present fairly, in all material respects
Do you agree with this answer?
Tax-to-GDP ratio is calculated as:
A.
GDP divided by tax revenue
B.
Total revenue divided by total expenditure
C.
Tax revenue divided by GDP, expressed as a percentage
D.
Public debt divided by GDP
Correct answer is:
C. Tax revenue divided by GDP, expressed as a percentage
Do you agree with this answer?
Standard deviation of returns is a measure of:
A.
Expected return
B.
Liquidity
C.
Systematic risk only
D.
Total risk (variability of returns)
Correct answer is:
D. Total risk (variability of returns)
Do you agree with this answer?
The principle of annuality in budgeting means that:
A.
Taxes are paid yearly
B.
Debt is repaid in one year
C.
Public servants are appointed yearly
D.
Budget authority is granted for one fiscal year at a time
Correct answer is:
D. Budget authority is granted for one fiscal year at a time
Do you agree with this answer?
Computer-assisted audit techniques (CAATs) are used by auditors to:
A.
Replace professional judgment entirely
B.
Prepare the client's tax returns
C.
Avoid documenting the audit
D.
Analyze large volumes of electronic data and test systems and controls
Correct answer is:
D. Analyze large volumes of electronic data and test systems and controls
Do you agree with this answer?
The ability-to-pay principle of taxation says that:
A.
People should pay tax according to benefits received
B.
Everyone pays the same amount
C.
People with higher income or wealth should pay more tax
D.
Only businesses pay tax
Correct answer is:
C. People with higher income or wealth should pay more tax
Do you agree with this answer?
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