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\ Z. 51: All assurance engagement-s are auclit (hi:torical financial inform;:tion) engagemerlts'
s2: All review engagu-*nts (historical fir,tancial inforniation) are assurance engagements'
A. True, True {' I'ri:e, False
B. False, False D" False, True
. 3. Which of the followinE is ground for renlo'ral or sr.ts;lensi6n of the menrber of the Board of
AccountancY:
A. Rigging the board examiriations C. Final conviction of a case (political offense)
B" Penciing case involving a political offence D. All of the above
t)' 5. 51:
52:
PSQC 1 is appticai:le to all reviews.
PSA 220 rs applicabte to aif audiLs.
A. True, True C. T'rr-lt:, F;rise
B. False, False D. Faise,-[rue
6. A CPA certiflcate is evidertce of:
A. Recognition cf inclependetice in rnind'
B. Basic competence at the time the certiticate i5 grantt'd'
C. Culmination of the educatir-rnal prccess'
9. Membership in thE PICPA'-
7. 51;The President of the Philippines has ihe ar-rthtirity i(; renlovil alry rnenrber of the Board of Accountancy for
negligence, incompetence or all'/ other 11,',t (atise.
52: possession Of an unsounCj mirrd rs not a qruurrd f<:r th..: srr:;pen:jon Or revOcatiOn Of a CPA's certificate Of
registration and professiona! ID card.
53: A ierson shall be consi4ered tc be in the profess;onal practice of accounting if helshe is an officer in a
private enterprise, makes decisions requirirrg f;rofess;ional amountrng knor.rledge and the position requires
tl'rat the holder should be a CPA.
A. False, false, true (,. [rue, false, true
B. False, true, ialse D. False, false, false
(Numbers 8 to l0) Clement and Daniel, CPAs applied foi rpcistration fr:r accreditation to practice public
accountancy. Their application was approved on July 30, 2014.
lt B. When willthe registration expire?
A. Sept. 30, 2t)16 B. Dec. 3i,2016 C Jr.iiy 30, 2017 D. Dec.3l,20t7
ll g. Clement and Daniel, CPAs, shourid frle for renewai cf regislration on or h,efore;
{, A. .luly 30, 2016 B. Sept.30,2016 C. luly :jC, 20tr7 D. Sept. 3A,2OL7
!;\ / 12. An indivir1ual just entering u6lon an auCiting ,lareer irrust ol-rtairi professiortal experience prirnarily in order to
achieve a:
A- Posrtive quality confi)l review. C- Farrorable peer review. '
t, 16 The integrated natisnal professianal organization of CPAs accrecJited by the BfiA per
dcted october 7, 1$75:
PRC accreditation nCI" 15
1g. Speciaytemporary pernnits anrl authorizations may tle issued by the BOA. sr"lbject to tfie approval of trre
il C-ommission and payrnent r:f the fee-s the latter has prescrihed anri charg,ed thc"reof to the follo$dng
perso'l"rs,
except
A. A foreign certified pubtic accourntant efigaged as prufesstlr, l*rturer t:n critic in fields e.ssential to
. accountancy educatiun in ltre Philipprnes amcJ hisltmr engagern*fit is conftned b teaching onty'
B. A foreign Cpn wno rlesires to practire accountancy irr the Fhilippir"lrs *rrough ihe r*dprocttY provision and
was abie to prove tlrat Filipino CPAn are nlloumd t* practict in hili home muntry withnut resFiction,
C. A foreign certified public accountant who is an intematior-rally rcfflgnized expert or l4,'ith strxcializatuan in
any b,ranch of accountancy anrJ his/her service is essential f*r the advaneement nf acrountancY in the
Philippine;.
D. n foreign ae*ified pubtic accttrntant calld for consultati*ri nr for a sfrecifrc pur6]se which, in the
judgment of the Board, is essential frlr drc developnmnt of the cruntry, provicted that hi#her practice
shatl be limited only for the particular work thatr hel$he is being engagd, and d€sp{te *re presence af
a*y Filipino CPA who is qualified for the particr.:lar wurk fcr whirtr ttm foreign CPA is trciqg engnged.
for use by ano$er
t 20. The levet of auditoy's satisfartjon as tn the reliabilitry of an assertiurr heirrg marle by one
party:
A. C,onfrdence level.' B. Reaction level. C. Assurance level.
Pa!"tY
D. Tolerancr l*vel.
t 21. Which of the foliowing hest describes the objerctive of an as*r-riar"rce enEagernent?
A. To imprwe the companyk dscision outcomes'
B. To express an opinion on the faimess of the presentation of historical financial inforrmati*n.
C" To enhanm the credibitily of information in order t* improve the likelihood that the' information r#ill mesl
the needs of an intendeci user.
D. To cornpare the oompanv's infcrmatir:n ancf p+,:lir:ie*; tn Hrose of mther entities widnin the sarn* lndustry.
22. Krypton Corporatiorr has enEagied C:ernini, CpA, to issu* a report on the mcuraqr of product quality
|., specificaUans intjuded in trade saleq agreenrents, Tt-ris is an txampte of a(ni:
-
A. Assertion-baserj assurance service. fumplianm fl. audit" !'i :1
E fi*
., ri
Financial statement auriit.
A zt. Aconceptrela(ingtotheaccurrtulai:ionrrftheaurliterriijen(cneces;Saryior.theauditortoccrncludethattl.rere
i-ai(en as a vvhole:
I are no materia! rnisstatements in the financiai stattl*iet:ts {:' i'loderate Sssurance"
A. Reasonable assurance' Lt'
t
g. il;;ii;t" mturance. l"i*gative assLrranc*'
i,! combination of procedures required in
,ir 28 As opposerJ to an audit, which-of thr: folk:wing is an ;rppropriate
ccrmpleting a review engaEement?
^
nlinquiri B-Observation 6- An3iytir:alloro':er-iures
A. A and g B' A anil C ('' f] anrf C D. A,BandC
nun-publlc entity should issue a report stating that
a a
L 29. An accountant whO reviews the financial statements *f o
I revlew:
A. Is subsBntially less in scope than an ar"rdit' cortit'cl strt,,,icture is functioning as designed'
B. provides n"gilu* assurarrce that the intenrral
financia! statem$1ls are fairly presented'
C. provicles ";i'y li;i*-d ,ururun.* that the
D" Is substantially more in scope than a cor''iprlation'
30.WithreferencetoPSRE2400,tlrcEeneralprinciple:;ofareview:
A. Are similar to the general principles appiicable to an arrdit engagement'
- B. --Are-the opposite* the-0';eral-py neiples applicablt: tcr an audit engagement'
to arl ar:dii engagement'
c. Are stricter compared to the general prlncipies applicaSie'
;o;npilation engaeement'
D. Are the *n,.- u, th" general principles applicable t<-r ;r
Page 3 of 7
fr^ea Er 7?q-oRn7 / 7?4-?q8q I logio) 439-i320
nq). rrEnwEwnuuuEE
Ar.rditing Theory Quiz I ATq-r
-:-?-= ?
,l 35. Accordihg to PSRS 4410, the following procedures are required whenever a CPA peforms a compilation
l' engagement:
AE ED
Agree with the client regarding the terms of engagement Yes Yes Yes Yes
.' Planning for the cingagement Yes Yes Yes Yes
. Use of accounting expertise. Yes Yes No No
. Issuance of a report. Yes No Yes $o
36. An accountant providing a compilation service must:
A. be independent of the client
B. assure that the work is perFormed by a person with adequate training and with the professional care
C. carefully review the information provided by the client
D. provide limited assurance that the information follows GAAP
letter is issued in association with a prospectus when:
)37. A comfort
A. the client requests one as evidence that the prospectus is complete
B. the auditor is required to asset that all rnaterial events subsequent to the previous audit have been
disclosed
C. the auditor believes all the information contained in the prospectus is plausible
D" the audited financial statements are not current and unaudited interim financial statements are included
I 38. An individual (whether internal or external to the firm) who has a reasonable understanding of (a) audit
processes, (b) PSAs and,applicable legal and regulatory requirements, (c) the business environment in which
the entity operates, and (d) auditing and financial reporting issues relevant to tlre entity's industry.
A. Suitably qualified person C. Experienced auditor
B. Engagement quality control reviewer D. Expert or specialist
] or. 51: The essence of the attest function is to determine the accuracy of financial statements.
52: A CPA should maintain objectivity and be free of conflicts of interest when performing any professional
. servtce.
A. True, True C. True, false
B. False, False D. False, true
l' 43. An external audit:
I
I A. Complements an internal audit. C. Contradicts an internal audit.
B. Overlaps an internal audit. D. Confirms an internal audit.
!- 44. Which of the following best describes why an independent zuditor is asked to express an opinion on the fair
presentation of financial statements?
A. It is difficult to prepare financial statements that fairly present a company's financial position, cash flow,
and operations without the expertise of an independent auditor-
B. It is managemenfs responsibility to seek available independent aid in the appraisal of the financial
information shown in its financial statements.
C. A company may not be objective with respect to its own financial statements.
D. It is a customary courtesy that all shareholders of a company receive an independent repod on
management's stewardship in managing the affairs of the business-
q 4s. Which of the following types of audits would be intended to cover environmental matters that may impact on
1i the financial statements?
A. A financial statement audit, C. A program audit.
B. Anoperationalaudit- D. Anenvironmentalaudit.
46. 51: Audit risk is the risk that the auditor gives an unqualified audit opinion when the financial statement
' are materially misstated
52: The independent auditor lends credibility to the financial statements by maintaining a clear-cut
distinction between management's represrlntations and the auditor's representation.
A. False, true C. Trye, true
B. True, false D. False, false
ReSA: The Revierru Sddf of Acournancy
Auditing Theory Quiz !
f 47. The two rnost iriiportant qualities for an operat'ionEl alidltr-rr are:
V A. IndePendence and comPetence'
B. Competence un6 1"66nical training
C. PersonalitY and aPPeaiance'sufFtcient expenet':ce
D' Academic background and
;.4S.Underthelaw,thechiefexecutiveofficeroftheCornrrlissinrronAr,lditisthe:
i- A. Commissione r' C' Chairi"nan'
D' Executive Direclor'
B. Manager' professional
governrnent auditors is aiso perfoi'med by
independent
I ] 49. Which one of the following functions tf
t' accountants?
A. Preserve vouchers Pertaining to warrar'ts'
transactiorts'
B. Cor.rntersign cher:ks goods purchasecl'
or treasury
C" Inspect deliveries of
D'Examineaccountspertainingto.,*,unuesandr:xwlnclii.uresanduses,offuddsandproperty. in the
/\ C.mmission (StC) has influence in setting 61sP' and i:i represented
50. The Securities and Exchange
!- following starrdard-setting
''o''-:'Eturre
@rv''
bodies: r Bnilr a and tl.
A. oft,sc. [: RlllrS,tJ?,j;,
B. MSC.
t-he'chief atrdit exe't''rtive shauld report
directly to:
n 51. For the hiEtrest degree of independence,
A. controlle' C' Tne executive vice-president'
V? The :-,':.':: -
|.lB.Theauditcommitteeclftheboardofrlirectttt.s,U.Ther:hiefacc0untar]t'
should be
ar:d appropriate evidential matter
l. sz. one of the recluirements of the auditing stancl;lrds is s',rrfirient
+ "-"
Jntiin*A. The lenn
..approfrnare''
"'Y'" i"
refers '- tc:
prinicriiy
'
A euality orthe evidence I
Eilffiil1l"Tifi:o-T::;.-.
B.
of the evidence"
QuantitY
of RA 9298' select the
frorn the IffiFl{ri}ientintl Rrlles antl F'egulations
- s:. The fb*owing are various provisions lifted
1 in""rrect statement: is the same as
: {-rrrarrcial R.eporting Stanclards council
A. ffre teim and qualifications of the ';hairrtanofcfihethr'Auctitirr5 and Asstlrance standards council'
thelermind-qualitieollqrE qi tn. cnairman
B. There are B PICPA *ornt ** inthi it-SC;e"'-lirerJ
to I FICPA *enrbers in the'AASC'
Tethni,:al ll.r-rrri:ii from tlie ilrrard of Accountanry'
c. There is only one member i,.t tnu iou.uolq
.D.ruopersons.naliserveontheBoar.rjofAcccuntan(yfoi'iilc,leiha:l12years'
or whose accreditation has been
\,-; plcpA,s certificate of accreditation has be-n;n tanceii{:i!, t)t itot '-enewed,
54. If
t ST:"HS^ nr:w aco"edited association of cPAs'
musr be abotished and shail i:e replaced by a or non-
prafessl,l,: rlu.ing the period of suspension, cancellatlon
B. It cannot represent tire acmr,,ntanry
renewal of certifirate
C.Itcanrepresenttheaccotjntancyprofessiononasubsistingbasis. (3) years to comply with the
D. pICpA shatt be reconstituted and i:e Eiven , ;;; p"r'i"c of thn**
requirements for a.ccreditation'
-\
\, 55. Tlre "hallmark" of auditing is
f..
l''laterialiW and audit risk'
U A. Available audit technologY'
D.
Professional iudgment'
B. Generally accepted auditinE standards'
f -Ihe :---i:^-!.\ +1.. 6airr,.rrinn irrfn on ciocument s which he/she signs, uses or
I sa. shall be required to indicate the foik:wing irlfonaatir-rn
cPA
issues in connection with the practice of the
professiqn:
& E e D
. Certificate of Registration nurnber Yes Yes Yes Yes
. inforntation
Professional identificatir:n card
Yes Yes No Yes
.
PTR
Birth date and contact numbei' Yes l\lo Nc No
:, 62. A governmental audit may extend beyond an examination leading to the expression of an opinion on the
fairness of financial presentation to include
Compliance P*r1u*rrrO Economy and efficiency
A.
B. Yes Yes Yes
C. No Yes Yes
D. No No Yes
I ,' 63. Government effectiveness (program) auditing seeks to determine whether the desired' resulG are hing
i a.hieved and objectives are being met. The first step in the performance of such an audit would be:
A. Evaluate the system used to measure results.
B. Determine the sampling frame to u- in studying the system.
C. Collect and analyze quantifiable data.
D. Identify the legislative intent of the prograrn being audited,
f, 64. One of the means to regulate the accountancy profession'is through the adoption of a Code of Professional
Ethics for CPAs. General ethics is the study of:
A. conduct.
Ideal rnethod of C. Ultimate reality.
B. Ideal conduct. D. Ideal socialorganization.
t,l
I 65. What are the two most common types of tax services?
A. Tax evasion and tax planning. C. Tax computation and tax planning.
B. Tax planning and tax compliance. D. Tax mmpliance and tax shelter.
| 66. In "auditing" accounting data, the concern is with:
r A. Determining whether recorded information properly reflects the economic events that occurred during the
accounting period.
B. Determining if fraud has occurred:
C. Determining if taxable income has been calculated correctly.
D. Analyzing the financial information to be sure that it complies with government requirements.
l, r 67. The following, except one, is always present in assurance engagements.
i' ' A. The issuance of a written repo*
B. The consideration of intemal control
C. The presence of written assertions which is the responsibility of another party-
D. Independence of mind and in appearance on part of the auditor.
68. An audit should be designed to achieve reasonable assurance of detecting material:
'. A. Errors.
B. Errors and irregularities"
C. Errors, irregularities, and those illegal acts with a direct effect on financial statement amounts.
D. Errors, irregularities and illegal acb, regardless of whether it has a direct or indirect effect on financial
statement amounts.
69. The susceptibility of an account balance to error that could be material, assuming there are no related controls,
is refened to as:
A. Intangible risk. C. Inherent risk.
B. Detection risk. D. Control risk.
70. According to ISQC 1. which of the following is (are)the objectives of establishing and maintaining a system of
quality control?
A. The firm and its personnel comply with professional standards and applicable requirements.
B. Reports issued by the firm or engagement partners are appropriate in the circumstances.
C. Both a and b.
ReSA: The Review School ofAccountancy
r --- - -'
nuoiting rh*ory Qrii ATQ- 1
/ D: Neither a nor b.
71. which of the following elements of quality control p€rtain to human resources?
fl, A' Recruitment. performance evaluation, compensation and career development of audit professionals
B. Direction, supervision and review of audit profussionals
C. IFAC's code of ethics for professionai accountants
il D. Quality Control Review
t\ 72. Which of the following pertains to a self-interest threat?
,
I
A. An audit firm has a financiai interest in a client,s affairs.
B' An audit firm prepares the accounting records and financial statements of an audit client.
c. An audit firm becomes "over" acquainted with an audit client.
D. An audit firm takes an audit ctieni's part in a dispute, somehow acting as an advocate.
\- 73. Which of the following pertains to a familiarity threat?
t.' ;
I
A. An audit firm is threatened with dismissar by an audit client.
B. An audit firm becomes .'bver,, acquainted with an audit client.
C. An audit firm is being pressured to reduce the amount of work done, therefore reducing fees.
D' An audit firm takes an audit clienfs part in a dispute, somehow acting as an advocate.
l:
I 74. Which of the following pertains to a peer review?
A' A review of an audit file carried out by another partner in the assurance firm.
B- A review of an audit file carried out before the audit report is signed.
c. A review of an audit file ca*ied out after the audit report is signed.
D. None ofthe above
,t{
I 75. Which of the following pertains to a cold review?
A. A review of an audit file carried out by another partner in the assurance firm.
B. A review of an audit file carried out before the audit repod is signed.
c. A review of an audit file carried out after the audit report is signed.
D. None ofthe above
-end-