A: Internal audit is a continuous process. R: Internal audit is conducted by the statutory auditor. Choose the correct option. MCQ with Answer and Explanation
A: Internal audit is a continuous process. R: Internal audit is conducted by the statutory auditor. Choose the correct option.
A. Both A and R are true but R is NOT the correct explanation of A
B. Both A and R are true and R is the correct explanation of A
C. A is false but R is true
D. A is true but R is false
Answer: Option D
Solution (By JKSSB Mock Tests)
Internal audit is a continuous, ongoing appraisal system by the management. It is conducted by internal audit staff, not the statutory (external) auditor, who conducts the annual financial audit. A is true, R is false.
Explanation:
The Current Ratio measures short-term liquidity, not long-term solvency. The Debt-Equity Ratio measures long-term solvency, not short-term liquidity. Both statements have swapped the definitions. Both are incorrect.
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