The 'Independence' of auditor means: MCQ with Answer and Explanation

Question
The 'Independence' of auditor means:
A. Auditor can hold shares in the client company
B. Auditor is a relative of management
C. Auditor is free from any influence that could compromise professional judgment
D. Auditor can take loan from client
Answer: Option C
Solution (By JKSSB Mock Tests)
Independence in mind and appearance is fundamental to audit.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
Under the 'Public Financial Management System' (PFMS), the 'Just-in-Time' fund release mechanism ensures:
A. Release of funds only when needed, reducing idle funds
B. Delayed payments
C. Advance payment to all
D. Manual processing
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Correct Answer: Option A

Explanation:
Just-in-Time in PFMS releases funds just in time for expenditure, avoiding float and idle balances.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following decisions relates to determining the optimal capital structure?
A. Investment Decision
B. Financing Decision
C. Dividend Decision
D. Liquidity Decision
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Correct Answer: Option B

Explanation:
The financing decision involves choosing the right mix of debt and equity (capital structure) to minimize the overall cost of capital.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
In the absence of an agreement, what is the profit-sharing ratio among partners?
A. As decided by the senior partner
B. Time devoted to business
C. Equal
D. Capital Ratio
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Correct Answer: Option C

Explanation:
Under the Indian Partnership Act, 1932, if the deed is silent, all partners share profits and losses equally.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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