Audit carried out throughout the year to check effectiveness of internal control system of the organization is called:

Question

Which of the following are the duties of an auditor?
(A) To measure business events in terms of profit and loss and communicate the financial conditions of the business
(B) To prepare a balance sheet representing a true and fair picture of the financial position of the business
(C) To prepare final accounts, computation of taxable income, etc., while acting as an accountant
(D) To report whether the profit and loss account represents a true and fair picture of the profit or loss

Answer 1

Step 1: Audit Type Identification.
- Operational Audit: Evaluates efficiency and performance.
- Concurrent Audit: Assesses ongoing effectiveness throughout the year.
- Management Audit: Examines management policies.
- Internal Audit: Periodically reviews internal controls.
Step 2: Definition Application.
Given that this audit occurs throughout the year to verify internal controls, it aligns with a Concurrent Audit.

Firm 2	Cooperate	Compete
Firm 1	5, 5	0, 10
Compete	10,0	2, 2

Audit carried out throughout the year to check effectiveness of internal control system of the organization is called:

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The Correct Option is B

Solution and Explanation

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