Solved Internal Control and Internal Check

Internal Control and Internal Check MCQs for Competitive Exams

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Topic Notes: Internal Control and Internal Check

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Internal Control and Internal Check MCQs in Commerce are useful for candidates who need targeted practice for CSS, PMS, FPSC, PPSC, NTS, entry tests, and other competitive exams in Pakistan. This topic page is designed for quick revision, repeated practice, and exam-focused preparation.

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Which statement best describes the concept of internal check?

The work of each person is checked internally

The accounting records are checked by internal people

The work of one person is automatically checked by other person

Assets verification is done internally

Report

In the context of payroll fraud, what does the term 'dummy workers' refer to?

inclusion of fictitious names not working in a factory

Both skilled and unskilled workers working in a factory

Only unskilled workers working in a factory

Only skilled workers working in a factory

Report

What is the standard sequence of steps an auditor follows when evaluating internal controls?

Obtain an understanding, design substantive test, perform tests of control, and make a preliminary assessment of control risk

Obtain an understanding, make a preliminary assessment of control risk, perform tests of control, design substantive procedures

Perform tests of control, obtain and understanding, make a preliminary assessment of control risk, design

Design substantive tests, obtain an understanding, perform tests of control, and make a preliminary assessment of control risk

Report

What is the appropriate action for an auditor if the assessed control risk is high?

Perform tests of control

Document the conclusions

Documents the reasons along with conclusions

Perform walk through tests

Report

Which of the following is not considered an inherent limitation of an internal control system?

Collusion among employees

Inefficiency of internal auditor

Management override

Abuse of authority

Report

Evaluate the following statements regarding internal control systems: (1) Internal check is a component of internal audit. (2) Internal check relates to the distribution of duties among employees.

Only 2

Only 1

Neither 1 nor 2

Both 1 and 2

Report

When vouching wages, which of the following activities should be segregated to ensure proper internal control?

Comparing time clock records with time reports prepared by supervisors and preparing list of workers employed along with the units of production for each one of them

Proposing pay roll summary and disbursement of wages

Making salary statements and filing tax returns

Maintaining personnel records and approving changing in wages rates

Report

Why is it necessary for an auditor to study and evaluate the client's internal control system?

Plan audit procedures

Suggest improvements in internal control

Express and opinion

Determine whether assets are safeguarded

Report

What are the essential phases involved in the execution of a system audit?

Conduct audit tests

All of these

Concluding the audit

Audit evidence

Report

What term describes the overall attitude and awareness of the board of directors regarding the importance of internal controls?

Supervision

Control environment

Accounting controls

Control procedures

Report

Internal Control and Internal Check MCQs for Competitive Exams

Internal Control and Internal Check MCQs for Competitive Exams

Topic Notes: Internal Control and Internal Check

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