Practice Guide For Audit of Procurement

  1. In the process of planning an audit, the framing of issues is a vital step, because _______.
    1. it forms the very basis of the entire audit effort in the field
    2. only if issues are properly identified ant formulated, will the field audit result in findings that are relevant to the audit objectives
    3. both
    4. only ‘a’
  2. Policy guidelines and documentation for procurement is required by an organization for the purpose of checking whether procurement is done
    1. of specified quality
    2. at most competitive rates
    3. in a fair and just manner ensuring efficiency, economy and accountability
    4. all of the above
  3. A well documented purchase manual contains __________.
    1. detailed purchase procedures
    2. guidelines
    3. proper delegation of powers
    4. all of the above
    5. only ‘a’ and ‘b’
  4. In procurement, delegation of lower functionaries with approval of competent authority is done for speedy decision making and placement of contract.
    1. true
    2. false
  5. Adequacy of the documentation and filing system of decisions and deliberations of individuals / Tender committee should be assessed to prevent _______.
    1. dilution of accountability
    2. arbitrariness in decision making
    3. both
    4. none
  6. Part files which are opened as and when new action is initiated should not be merged with the main file
    1. true
    2. false
  7. Excessive, fraudulent or infructuous purchases are avoided by taking into consideration __________.
    1. the consumption during last 3-5 years
    2. consumption during current year
    3. average rate of consumption and available stocks
    4. outstanding dues/supplies, past consumption pattern and average life of equipments / items
    5. all of the above
  8. In making forecasts, the indenting agency only consider “True issues” i.e. actual consumption which excludes _________.
    1. inter depot adjustments
    2. non recurring issues
    3. both
    4. none
  9. Purchases less than actual requirement may _________.
    1. adversely affect the progress of works
    2. result in subsequent procurement at additional cost or at higher costs
    3. both
    4. only ‘a’ is correct
  10. Demands of stores received from different wings should not be clubbed together so as to reap the benefits of bulk buying.
    1. True
    2. False
  11. No preference should be accorded in procuring goods which carried the Bureau of Indian Standard (BIS) mark
    1. True
    2. False
  12. During estimated of procurement rates, estimation should be done ___________.
    1. in a professional manner
    2. by extrapolating prices of low capacity equipments
    3. by applying uniform yearly compounded escalation over prices of similar equipment purchased earlier
    4. all are correct
    5. only ‘a’ is correct
  13. In Procurement, rate analysis should be carried out on the basis of __________.
    1. prevailing market rate
    2. last purchase prices
    3. prevailing economic indices for raw material or labour and other input costs
    4. all of the above
  14. For assessing rate, ________ shall be used as an input.
    1. Last purchase price(LPP) of past successfully executed orders of similar magnitude
    2. scope of supply
    3. both
    4. none
  15. The procedure for inviting tenders should ensure __________.
    1. wide publicity
    2. generate competition
    3. obviate (eliminate) favoritism
    4. all of the above