Question 1. The usual objective of a financial-statement audit is to:

1. Guarantee no fraud
2. Express an independent opinion
3. Prepare every journal entry
4. Certify business profitability

Question 2. Reasonable assurance in auditing is:

1. Absolute certainty
2. A management promise
3. High but not absolute assurance
4. Insurance of all losses

Question 3. Who primarily designs an entity’s internal controls?

1. Management
2. External auditors
3. Customers
4. CAG in every business

Question 4. A planned inspection of accounting vouchers is primarily:

1. Reinsurance
2. Vouching
3. Regression
4. Underwriting

Question 5. Checking whether a recorded machine physically exists tests:

1. Valuation only
2. Going concern
3. Existence assertion
4. Contribution principle

Question 6. Searching payments made after year-end chiefly helps identify:

1. Unrecorded payables
2. New equity
3. Premium pricing
4. Sampling frame

Question 7. The accounting figure at which an asset is carried concerns:

1. Internal check
2. Valuation
3. Insurable interest
4. Rotation

Question 8. Materiality in an audit is best understood as:

1. A fixed 10% of turnover
2. Any error of one rupee
3. Information capable of influencing users
4. All fraud is automatically immaterial

Question 9. Sufficiency of audit evidence principally concerns its:

1. Quantity
2. Colour
3. Document age only
4. Cost only

Question 10. Appropriateness of audit evidence principally concerns its:

1. Number of pages
2. Relevance and reliability
3. Binding colour
4. Fee charged

Question 11. Bank confirmation received directly from a bank may help test:

1. Sales commission rate
2. Mode of insurance
3. Bank balance
4. Employee morale

Question 12. Which procedure is especially suited to comparing large patterns over time?

1. Analytical procedures
2. Inventory labeling
3. Nominee registration
4. Co-insurance

Question 13. An audit programme is mainly a:

1. Customer insurance form
2. Planned set of audit procedures
3. Annual wage notification
4. Licence to operate bank

Question 14. An unmodified opinion ordinarily means:

1. All business goals are assured
2. No future losses possible
3. Statements satisfy the framework in all material respects
4. No transaction was sampled

Question 15. An identified material but non-pervasive misstatement normally points toward a:

1. Qualified opinion
2. Disclaimer always
3. No opinion allowed
4. Secret internal note

Question 16. Identified material and pervasive misstatements normally point toward:

1. A separate audit engagement
2. Adverse opinion
3. Pure clean opinion
4. Emphasis only

Question 17. A material and pervasive inability to obtain evidence ordinarily suggests:

1. Clean opinion
2. Cost audit
3. Disclaimer of opinion
4. Actuarial valuation

Question 18. An Emphasis of Matter paragraph on its own:

1. Does not modify the opinion
2. Always means fraud
3. Always produces disclaimer
4. Cancels audit

Question 19. The audit assertion particularly threatened by omitted supplier bills is:

1. Occurrence of cash sales
2. Completeness of liabilities
3. Existence of inventory
4. Value of goodwill only

Question 20. The assertion threatened by fictitious recorded sales is:

1. Completeness
2. Rights to land
3. Occurrence
4. Physical safeguard

Question 21. A test of cut-off asks whether:

1. Transactions are recorded in the correct period
2. Insurance claims are annual
3. Employees work full time
4. Cash is insured

Question 22. An internal check is principally:

1. An auditor’s final opinion
2. A division and cross-check of duties
3. A market-price index
4. A policyholder complaint

Question 23. Internal audit is primarily concerned with:

1. Charging insurance premiums
2. Issuing motor registration
3. Independent evaluation of governance and controls
4. Preparing every invoice

Question 24. Which is a preventive control?

1. Restricted access to payment approval
2. After-payment reconciliation only
3. Year-end discovery of errors
4. Litigation after fraud

Question 25. Which is a detective control?

1. Fireproof storage only
2. Monthly bank reconciliation
3. Authorising users before entry
4. Hiring an insurer

Question 26. Collusion is a limitation of:

1. Geometric mean
2. Insurance indemnity
3. Segregation of duties
4. Depreciation

Question 27. The constitutional provision creating the office of CAG is:

1. Article 148
2. Article 21
3. Article 280
4. Article 356

Question 28. The CAG’s duties and powers are mainly connected to:

1. Article 19
2. Article 149
3. Article 32
4. Article 300A

Question 29. Submission of CAG audit reports is dealt with in:

1. Article 110
2. Article 12
3. Article 151
4. Article 368

Question 30. In company law, the principal auditor-appointment section is:

1. Section 139
2. Section 188
3. Section 73
4. Section 134 only

Question 31. Qualifications and disqualifications of company auditors fall mainly under:

1. Section 140
2. Section 141
3. Section 148
4. Section 160

Question 32. Section 142 of the Companies Act deals primarily with:

1. Internal controls
2. Insurance claim settlement
3. Auditor remuneration
4. PLFS samples

Question 33. Auditor powers and duties are chiefly located in:

1. Section 143
2. Section 149
3. Section 185
4. Section 9

Question 34. Prohibited services by statutory auditors are the subject of:

1. Section 2
2. Section 144
3. Section 182
4. Article 144

Question 35. Cost records and cost audit are associated with:

1. Section 135
2. Section 138 only
3. Section 148
4. Section 161

Question 36. CARO 2020 is best described as:

1. An additional auditor-reporting order for covered companies
2. A new insurance regulator
3. A universal criminal law
4. An accounting equation

Question 37. Does CARO 2020 apply to every kind of company without exception?

1. Yes, without limits
2. No, exemptions and coverage rules apply
3. Only to individuals
4. Only to central ministries

Question 38. The external auditor’s right to seek company records supports:

1. Subrogation
2. Premium rating
3. Obtaining audit evidence
4. Index compilation

Question 39. Physical stock count is most directly connected to:

1. Existence of inventory
2. Compensation of claims
3. Appointment of CAG
4. Weighted mean only

Question 40. Which is most directly an example of audit sampling?

1. Auditing the entire population
2. Testing selected invoices from the population
3. Replacing all controls
4. Guaranteeing no material error

Question 41. What is the typical purpose of an engagement letter?

1. Specify market interest
2. Provide insurance subsidy
3. Document audit terms and responsibilities
4. Calculate median

Question 42. Professional scepticism calls on auditors to:

1. Question evidence critically
2. Assume all managers lie
3. Ignore external confirmations
4. Avoid documentation

Question 43. A fraudulent journal entry posted to boost profits is:

1. Always an accidental error
2. An intentional misstatement
3. A form of indemnity
4. A sampling error by definition

Question 44. An audit trail means:

1. An insurance claim receipt
2. A pension account
3. Traceable evidence of transaction processing
4. A CAG appointment letter

Question 45. Why are management representations generally not enough alone?

1. Other appropriate evidence may be necessary
2. They always prove fraud
3. They replace reporting frameworks
4. They count as external confirmations

Question 46. Who ordinarily prepares the financial statements under applicable laws?

1. The external auditor as sole manager
2. Management
3. IRDAI
4. Labour Bureau

Question 47. Substantive procedures are designed to:

1. Increase premium volume
2. Create pension records
3. Detect material misstatements at assertion level
4. Set national floor wages

Question 48. If internal controls are weak, the auditor may need:

1. More or different substantive evidence
2. To issue clean opinion automatically
3. To stop testing every balance
4. To appoint another regulator

Question 49. A going-concern evaluation primarily addresses:

1. Routine staff attendance
2. Ability to continue operations as a going concern under framework
3. Motor policy premium
4. CPI rebasing

Question 50. Which statement about a clean audit report is correct?

1. It ensures annual growth
2. It guarantees all liabilities paid
3. It does not guarantee future solvency
4. It is a reinsurance treaty

Question 51. The insurer’s payment for accepting covered risk is called:

1. Premium
2. Dividend
3. Auditor fee
4. Depreciation

Question 52. The doctrine of utmost good faith is also called:

1. Causa proxima
2. Uberrimae fidei
3. Res judicata
4. Caveat venditor only

Question 53. Insurable interest describes:

1. Any random wager
2. Guaranteed insurance profit
3. A legally recognisable interest in the subject insured
4. The highest possible premium

Question 54. Indemnity seeks primarily to:

1. Compensate covered actual loss within terms
2. Double the insured’s wealth
3. Reward carelessness
4. Fix company tax

Question 55. Ordinary life assurance is generally:

1. Always an indemnity contract
2. A benefit contract rather than indemnity
3. A marine-cargo policy
4. A bank reconciliation

Question 56. An insurer recovering from a negligent third party after paying a loss invokes:

1. Co-payment
2. Contribution
3. Subrogation
4. Endowment

Question 57. Two insurers sharing the same covered indemnity loss illustrate:

1. Contribution
2. Surrender
3. Pension annuity
4. Verification

Question 58. The effective or dominant cause of an insured loss concerns:

1. Accumulation
2. Proximate cause
3. Audit rotation
4. Statistical mode

Question 59. Reasonable steps to prevent further damage illustrate:

1. Indemnification never
2. Premium return
3. Mitigation of loss
4. Company audit

Question 60. Reinsurance most commonly is a contract between:

1. Insurer and reinsurer
2. Insured and auditor
3. Labour Bureau and NSO
4. Policyholder and nominee only

Question 61. A direct insurer normally remains liable to its customer after obtaining reinsurance:

1. False in all cases
2. True, according to the primary policy
3. Only after an audit
4. Only in marine insurance

Question 62. A quota-share reinsurance treaty is generally:

1. A tax audit
2. A statistical survey
3. A proportional risk-sharing arrangement
4. A stock-count procedure

Question 63. Excess-of-loss reinsurance responds primarily:

1. Above a defined retention or attachment point
2. Only to first ₹1 loss
3. Only to life maturity claims
4. To all claims without limits

Question 64. A facultative reinsurance arrangement usually addresses:

1. Every government scheme
2. A specifically negotiated risk
3. A sample average
4. Every motor policy automatically

Question 65. Treaty reinsurance ordinarily covers:

1. Only one insured person’s salary
2. Auditor appointment
3. A defined class or portfolio of risks
4. CPI-IW

Question 66. Under a pure term insurance plan, the primary benefit concerns:

1. Death during a specified term
2. Storage of stock
3. Vehicle depreciation
4. Inflation indexation

Question 67. An endowment life policy commonly combines:

1. Only a motor claim
2. Life cover and survival benefit
3. Only audited statements
4. Marine hull inspection

Question 68. ULIP investments are usually linked to:

1. Guaranteed fixed rates in all cases
2. No market assets
3. Market-linked funds with insurance
4. Warehouse inventory

Question 69. Which policy is associated with property loss caused by covered fire risks?

1. Fire insurance
2. Term life
3. Pension annuity
4. Reinsurance only

Question 70. Marine cargo insurance chiefly addresses:

1. Employee training
2. Risks affecting goods in insured transit
3. Audit report opinion
4. Payroll fraud

Question 71. Third-party motor liability insurance covers:

1. Owner’s investment profit
2. All mechanical wear
3. Covered liabilities to third parties
4. Every traffic penalty

Question 72. Own-damage motor cover primarily concerns:

1. Covered loss of the insured vehicle
2. Other person’s pension
3. The insurer’s audit fees
4. Guarantee of resale value

Question 73. A deductible is:

1. A monthly pension guarantee
2. The specified amount or share borne by insured
3. Another name for IRDAI
4. Always an insurer’s bonus

Question 74. A co-payment in health insurance is:

1. Always zero
2. The premium refund
3. An agreed claim-cost portion paid by insured
4. A statutory auditor fee

Question 75. A waiting period in health insurance generally means:

1. A specified period before certain cover applies
2. Immediate free treatment for every illness
3. An annual audit extension
4. A guaranteed payout

Question 76. Cashless hospitalisation means:

1. Every expense is automatically covered
2. Eligible treatment billed through network arrangements under terms
3. No identity verification
4. Insurance is not needed

Question 77. A defined-benefit critical-illness policy may pay:

1. Only actual pharmacy bill amount
2. Only fire-damage costs
3. A specified sum upon a defined diagnosis/event
4. A government pension automatically

Question 78. IRDAI is fundamentally:

1. The Indian insurance-sector regulator
2. An insurer for every household
3. The Comptroller and Auditor General
4. A labour-force survey

Question 79. The Insurance Act was enacted in:

1. 1956
2. 1938
3. 1999
4. 2013

Question 80. The IRDA Act was enacted in:

1. 1986
2. 1956
3. 1999
4. 2020

Question 81. LIC’s founding statute dates to:

1. 1956
2. 1938
3. 2005
4. 2020

Question 82. Which of these is an insurer rather than regulator?

1. IRDAI
2. LIC
3. CAG
4. MoSPI

Question 83. GIC Re is generally associated with:

1. Company law audit only
2. Consumer price surveys
3. Reinsurance business
4. Wage fixation

Question 84. The Insurance Ombudsman framework is designed for:

1. Specified policyholder grievance redress
2. Company tax assessment
3. CAG appointment
4. Population census only

Question 85. Insurance pooling works because:

1. All insured events occur simultaneously
2. Losses of many exposures are combined
3. The insurer prevents every event
4. Auditors pay claims

Question 86. A sum insured is generally:

1. Always an investment profit
2. An annual salary
3. The stated contractual cover amount subject to terms
4. The insured’s exact total wealth

Question 87. If a ₹5 lakh covered fire loss has two identical qualifying indemnity policies, total permitted recovery is ordinarily:

1. Limited to actual covered loss, not ₹10 lakh
2. ₹10 lakh automatically
3. ₹15 lakh
4. Unlimited

Question 88. Subrogation usually becomes relevant when:

1. Policyholder fills only proposal form
2. Insurer indemnifies a loss and has recovery rights
3. An auditor is appointed
4. A bank pays wages

Question 89. Insurable interest at the relevant time is particularly important to:

1. Forming a statistical median
2. Internal auditor rotation
3. Valid insurance recovery under product law
4. All interest-rate calculations

Question 90. An annuity is primarily designed to provide:

1. A stream of periodic payments
2. Vehicle third-party repairs
3. Stock depreciation
4. Audit vouchers

Question 91. A nominee in a life policy is generally relevant to:

1. Valuing closing stock
2. Receiving/handling policy proceeds under applicable law
3. Setting CPI weights
4. Determining audit sample size

Question 92. Policy exclusions tell the customer:

1. The regulator’s annual budget
2. Which documents CAG audits
3. Risks or circumstances not covered
4. Guaranteed investment yield

Question 93. An insurance rider is ordinarily:

1. An additional benefit or feature attached to a base policy
2. A separate government auditor
3. A labour survey module
4. A bank reconciliation

Question 94. Underinsurance can result in:

1. Guaranteed double payment
2. Reduced claim recovery under applicable conditions
3. Audit qualification automatically
4. Higher insured interest in every case

Question 95. Which best describes co-insurance?

1. Only insurer-to-insurer reinsurance
2. An insurance law passed in 1999
3. Multiple insurers directly share primary risk
4. A savings deposit

Question 96. PMJJBY is primarily associated with:

1. Life insurance cover
2. CPI inflation tracking
3. Marine hull audit
4. Company statutory audit

Question 97. PMSBY primarily provides:

1. A guaranteed pension
2. Specified accidental death/disability protection
3. Term deposits
4. Property revaluation

Question 98. EDLI under EPFO is best described as:

1. A CPI series
2. A company audit order
3. A social-security-linked insurance benefit
4. A personal motor loan

Question 99. A policyholder reading product terms should focus on:

1. Cover, exclusions, claim steps and relevant limits
2. A neighbour’s premium alone
3. Only brand popularity
4. Only social-media ads

Question 100. The principle of proximate cause helps decide:

1. The effective insured cause of a loss
2. The average household wage
3. The company’s audit fee
4. A bond’s interest rate