The 'Comptroller and Auditor General' (CAG) is not responsible for audit of: MCQ with Answer and Explanation

The 'Comptroller and Auditor General' (CAG) is not responsible for audit of:
A. Government companies
B. Autonomous bodies substantially financed by government
C. Public sector banks (statutory audit by CA firms)
D. Government departments
Answer: Option C
Solution (By JKSSB Mock Tests)
Statutory audit of public sector banks is conducted by chartered accountant firms appointed by RBI/Central Government; CAG conducts supplementary audit.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Fair Value' measurement is a key feature of:
A. Income Tax Act
B. Ind AS
C. Partnership Act
D. Cash basis accounting

Correct Answer: Option B


Explanation:
Ind AS extensively uses fair value for financial instruments, investment property, etc.

Question #2
S1: In standard costing, the 'Idle Time Variance' is always adverse. S2: 'Abnormal Idle Time' is treated as a cost of the period and transferred to the Costing P&L. Which statement(s) is/are correct?
A. Both S1 and S2
B. S1 only
C. S2 only
D. Neither S1 nor S2

Correct Answer: Option A


Explanation:
Idle time represents unproductive time, so the variance is always adverse (actual > standard). Normal idle time is absorbed in overheads, but abnormal idle time (due to strikes, accidents) is treated as a period cost and charged to the Costing P&L. Both are correct.

Question #3
Provision for doubtful debts created at the year-end is debited to:
A. Profit & Loss Account
B. Suspense Account
C. Sundry Debtors Account
D. Trading Account

Correct Answer: Option A


Explanation:
Creating a provision is an expected indirect loss based on conservatism, so it is charged to the Profit and Loss Account.