Which audit assesses whether management's policies and procedures are operating efficiently? MCQ with Answer and Explanation

Which audit assesses whether management's policies and procedures are operating efficiently?
A. Cost Audit
B. Management Audit
C. Tax Audit
D. Statutory Audit
Answer: Option B
Solution (By JKSSB Mock Tests)
Management audit focuses on the efficiency, effectiveness, and performance of management processes, beyond just financial accuracy.

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1
A: A Trial Balance agrees when total debits equal total credits. R: An agreeing Trial Balance guarantees the absolute accuracy of the books of accounts. Choose the correct option.
A. A is true but R is false
B. Both A and R are true and R is the correct explanation of A
C. Both A and R are true but R is NOT the correct explanation of A
D. A is false but R is true

Correct Answer: Option A


Explanation:
A Trial Balance agrees when total debits equal total credits. However, it does not guarantee absolute accuracy, as errors like compensating errors, errors of principle, or complete omissions do not affect the tally. A is true, R is false.

Question #2
Which of the following is not a purpose of financial audit?
A. Expressing opinion on true and fair view
B. Preparing financial statements
C. Ensuring compliance with laws
D. Detecting fraud and error

Correct Answer: Option B


Explanation:
Preparation of financial statements is management's responsibility. Auditor expresses opinion on them.

Question #3
The 'Independence' of an auditor is required because:
A. To reduce fees
B. To increase revenue
C. To comply with company law only
D. To maintain objectivity and impartiality in the audit opinion

Correct Answer: Option D


Explanation:
Independence ensures unbiased opinion.