What is CA Tushar Makkar known for?

CA Tushar Makkar is known for being AIR 47 in CA Final and creating India's largest audit community.

What services does CA Tushar Makkar offer?

He offers audit resources, courses, and expertise to chartered accountants.

Statutory Audit Case Study Quiz with Answers (and Audit Procedures)

Auditing is not just about ticking boxes—it’s about applying judgment in real business situations.
In this quiz, you’ll test yourself with practical statutory audit case studies covering vouching, materiality, audit reports, ICFR, and key audit procedures. Each scenario has multiple-choice questions, followed by the correct answer so you can check your understanding instantly.

💡 Pro Tip: If you want to go beyond this quiz and test your knowledge across multiple levels of difficulty in Audit, Accounting, and Finance, try Fundose.in. It’s a fun, interactive way to practice and sharpen your practical skills. You will also get certificate also if you win the quiz game. Let’s try.

August 12, 2025

Quiz - Case Studies Audit

Case Study 1: Vouching Scenario:
Priya, the statutory auditor, is checking purchase transactions at Zenith Technologies. She spots an invoice for office supplies of ₹50,000 but notes the purchase order is only for ₹35,000.

Question 1: What should Priya do next as part of vouching?

A) Accept the ₹50,000 invoice as recorded
B) Investigate the discrepancy and seek clarification from management ✅ Correct Answer
C) Ignore the mismatch as immaterial
D) Assume the invoice is correct Note : This could also represent a control issue, and it may lead to more significant problems in the future.

Question 2 (Audit Procedure): Which document is most important for Priya to verify the validity of this purchase?

A) Payment voucher
B) Goods receipt note ✅ Correct Answer
C) Cheque copy
D) Ledger extract

Case Study 2: Materiality Scenario:
Priya finds a duplicate employee reimbursement of ₹10,000. Zenith’s total yearly expenses stand at ₹10,00,000.

Question 3: Should Priya consider this error “material”?

A) Yes, because any error affects audit opinion
B) Only if it would influence users’ decisions ✅ Correct Answer
C) Never, as it’s a small amount
D) Yes, if management thinks so

Case Study 3: Audit Report Scenario:
Priya completes her audit and sees that mandatory legal disclosures are missing in the financial statements. Management refuses to add them.

Question 4: Which type of audit report should Priya issue?

A) Unqualified (clean) report
B) Qualified report for shortfall in disclosures ✅ Correct Answer
C) No report required
D) Adverse report for all missing disclosures

Question 5 (Audit Procedure): Before finalizing her report, what should Priya request from management?

A) Internal control manual
B) Management representation letter confirming completeness of disclosures ✅ Correct Answer
C) Voting results from AGM
D) Expense ledger printout

Case Study 4: ICFR Report Scenario:
Zenith Technologies recently changed its sales invoicing software. Some invoices are manually generated when the system fails; supporting logs are inconsistent.

Question 6: How should Priya report this in her ICFR audit?

A) Ignore and move on
B) Highlight control weakness in ICFR report ✅ Correct Answer
C) Accept management's assurance
D) Mark all manual invoices as fraudulent

Question 7 (Audit Procedure): What audit procedure best identifies recurring manual invoice errors?

A) Sample testing of manual invoices and reconciliation with system invoices ✅ Correct Answer
B) Comparing supplier addresses only
C) Checking only current year invoices
D) Verifying invoice signatures

Case Study 5: Materiality in Context Scenario:
Zenith signed a contract worth 30% of annual revenue, mentioned only in the notes to accounts.

Question 8: Why is this contract likely to be material from an audit perspective?

A) Because it’s mentioned in notes
B) Due to its relative size and potential impact on users’ decisions ✅ Correct Answer
C) All contracts are immaterial
D) Only management decides what’s material

Case Study 6: Audit Procedures (General) Scenario:
During inventory audit, Priya wants to confirm existence and valuation of goods in Zenith’s warehouse.

Question 9: Which procedure will BEST confirm inventory existence?

A) Scanning last year’s closing stock
B) Physical verification (stock count) with inventory records ✅ Correct Answer
C) Checking supplier bills only
D) Reviewing sales invoices

Question 10: Which procedure is most suitable for verifying completeness of recorded liabilities?

A) Reviewing fixed asset additions
B) Obtaining suppliers' statements and reconciling with company records ✅ Correct Answer
C) Comparing sales to purchases
D) Checking employee attendance

Case Study 7: Vouching – Revenue Scenario:
Priya is auditing sales revenue. She notices unusually high sales in the last week of March, some without dispatch documents.

Question 11: What should Priya do?

A) Accept sales as recorded
B) Check dispatch documents and delivery notes for revenue recognition ✅ Correct Answer
C) Assume all sales are valid
D) Focus only on April sales

Case Study 8: Procedures – Bank Balance Scenario:
Priya needs to confirm a large bank balance shown on Zenith’s trial balance.

Question 12: What audit procedure is most reliable for this?

A) Check cash book entries
B) Obtain direct bank confirmation letter ✅ Correct Answer
C) Verify last month’s reconciliation only
D) Review supplier payment records

If you want to keep testing yourself in audit and finance topics with levels that get progressively harder, visit Fundose.in. You can track your progress, compete, and learn like you’re playing a game.

About Fundose.in

Fundose.in is an interactive quiz platform designed to test and sharpen your practical expertise in finance, taxation, and auditing — not just academic knowledge.

It’s structured like a career ladder, with 12 progressive levels, starting from CA Article level and going all the way to Partner level. Each stage presents real-world, case-based challenges that mirror situations faced in professional practice.

Key Highlights

Focus: Practical expertise in accounting, auditing, taxation, and finance.

Levels: 12 career stages — from CA Article to Partner.

Gamified Learning: Unlock higher levels by clearing challenges.

Real-World Scenarios: Based on actual client and firm situations.

Certification: Participants who successfully clear all 12 levels receive an official certificate.

Creator: An initiative by CA Tushar Makkar.

Why Try It?

Ideal for CA students, CA, finance professionals, and aspirants wanting to assess their real-world problem-solving skills.

A fun, competitive, and skill-based platform — far beyond textbook theory.

Also, Gain recognition with a certificate of achievement upon conquering all levels.

Statutory Audit Case Study Quiz with Answers (and Audit Procedures)

Quiz - Case Studies Audit

You may also be interested in