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ReSA

The Revierv lichool of Accountancy


I Tel. No. 735-9807 & 734-1989 / (09i0) 439-132$
*-,tl resareview@hotrnail. ccrrt

AUDITING TI{EORY IM lreneo' FD Yabut

Auditing Tlieorv * Fteview' dluestions i


l\ 1. which of the following is not a characteristic of a suitabte criterion (criteria)?
A. ComParabilitY C. l\r*utraliW
B. CornPleteness D. Understandabilit/

\ 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

prrofessional accountants engaged


4. ]-he cpA title was conceived and create,c, under the first accoi.intanrry iav,r, for
in which of the following:
A. Accounting education. C. Public accounting
B. Managementaccounting. n. Government accounting.

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

1Cl. Such renewal of registration shall be effective beginning:


A. Aug. 1,2015 B" Oct. 1, 201ti C. Jan. D. Oct. l,Z0L7
",21)\7
11. Which of the following statemetrts regarding "meaningfrll tsxpei'ience"is ccrrect?
A. In commerce and industry, rrreaningful experiencu irrcludes siglnitlcant involvement in general accounting,
buclgeting, tax administration, internal auditinq, lraison l'rith the Comrnission on Audit, and any other
related funclions-
B. In public practice, m'eaningfui experience includes at least two years as an audit assistant and one year
as auditor-in-charge of aurJit engagemerlts co'renng full au,Jit furictions nf significant clients.
Cl. In education/academe, nreaningful e.*perience sliali include teaching for at least two semesters or three
trimesters, prorri6ed the a.cr*rlat*ct knowledge in subjects taught shall not be less than three (3) school
yeal's'
D.In government, rneaninEfirl experierice inciurles signilicant irivolven'ient in generat accounting, budgeting.
tax administration, inteinal auditing, liais,orr vcith exterQal ar"lditors and representation of employer before
government agencies on tax and ather matterg relate-d tc ficcr-rurtting.

!;\ / 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. '

B" S*asoned judgment D. $penalff designation by the PICPA'


,r\ 13. In the ar:nrlerne. the De,mn ur the ilepartment flhalr that supenrines the BSA pr0grarn:
A. ls ttieoidest prufurssor in ths mliu!l*] o" de1lartment.
B- Is rer{uirectr to hold a dcrtr:rate rlegrct in a cpur"se related to ;rccOuniing
(-. ts deenred to be in tfie praclir:e of accnuntancy and therefr:re such pasiticur requires a L?4.
D. [s nnt tJeerned in th* pracht:e of aclutlttanry.
1 l,t. The Board shatl b* under the adniinistrative supervisinn of *trl:
A. Phitippine lnstitute of CFS.* C. Securities and Exchange Lbmrni$sion
B. Prof*ssionai Rr'4t.rlatirxr Cflrflrnission t). President of the Phiiippines
, 15. Per t1A9298, tfre foltrrrruiprg are avaiiabte pen6ttte5j againS viol*lting CPAs:
'
A "- Revrxation qrf thg cPA licen*e
B - suspensie u'l'of the cPA license C"* Imprisonment and/ar fines
A. AandB ts. A nmd (. C. BandI l-). A. B and C l

t, 16 The integrated natisnal professianal organization of CPAs accrecJited by the BfiA per
dcted october 7, 1$75:
PRC accreditation nCI" 15

A. Auditinq and Assurann* Standards Chunci{ iAASCi.


B. I-inancia! Reportirrg SitandanJs Caunr:il ilff45c)'
-t-echnifl,ill
C. Education Council (ffC)-
D. Philippine tnstitute of Certified F\rblic Acmunranbs iPICPA)"

17" Tlris body is rltsignated to promuigate auditing standards in the Phiiippines:


A. philippine lnstrtute $f Cpp,s. C. Association nf CPAs in Public Prartke"
B. alciitirrg ofid ASsurdnce Sk*nriards C.*urtcit. t)- Boarrl of ,4ccounhncy.
n 1g. 51: A secl.or refers tr: tl^,e area of pracrice cf acccrunta*cy, s*ci'l as fiovernment cornrner(e and insurarue,
ItlI -l,iltllabior academe,
eduratron anu pui-rlic practce-
SZ: are prepared wtreriever Hre Board af Accnurrtancy cleerns it appropriate, provid*d the period
between dianges sliall not tx more than three years.
5.3: shall be the prirnary duty of $e Sandigantrayan and the B'rmrrj of Arxountancy t,o effectively enforce dte
It
provisions of the Philig:rlne Acc*untanr:y Act of 7004"
S.r$l [n t]re event a candidare oLrtains thn: r-ating of seventy-frue percent (75Yo] and ah:ove ln at least a
ffia]ority
(Jf :rubjncts a:: prr:.u:.,lcr.i [Dr ir, this nn heishe shall rec,.rlrrt 3 rnn'.lihrtnnl r:redit for th,e sub]ec$ passed,
provided, that i candidate shall take an examinatron in ttre remaining suf-rjects within Rvo years frurn the
precedinE ryanrinatifi ir.
A. True, true, true. fulse C. i-;tis*:. t:TJen faise, true
B. False, true, false, true D. False, false, false, true

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.

23. The subiect matter of an assunance engagement moy includel


A. h{istorical or pro:;pecfilJe finartcimi [*fnrrnatinn
Operational audit,

B. SysEerns and proctsl;**;, $tJdl as intemal c*nt..':l s\rs|cfi]s

;"f i: <Ct:l-r I; \r i: r !'-:,4; \::; .i


C' Compliance with laws, n'rles anci regulations'
engagement'
D. nny liinu above may be the subier* maner of art assurlnce
statements are:
D 24. Auditing is based on the asburnption that firrancial data aild
rl A. In conformity with GAAP. C' Present'ed fairly'
B. Verifiable. u' Consistently applied'
tne perfr:rrnance of the audit function on
t
\
25. certifiecl public accounting firms have as their prirrrary resporrsibiliqv
published financial statements ot:
A. All corPoratrons. C. l\ll publicly traded cornpanies"
B. Al! corporations listed on the PSE'
t). All national chartered corporations'

ltis responsibilities extend to:


\r, 26. when an auditor expresses on opinion on financiai statefilerlts,
TJ A.Theunderlyingwisdonrofhisclien+Jsrnanagernentdcrisions. pn-:sente<l in t}|e financial statements'
a."e farl;'
B. whether the results of lris client's op*rrting"d*cisicns
;t 15* given to his clieNlt'
c. Active participation in the implementationsolvency' ;1(jvir:e
D. An ongoing r.".ponuiUfity for his client's

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

\.. 31. An accountant providing a compilation seruice must:


itI
\,, A' be independerrt of the client hrr a n.rq^fl with aoec training ancJ with the professional care
B. assure tnat the wr:rk is performed by a person aoequate
C. carefully review the inforniation provided by the client
-
D: provide'limited assurance ttrat the intbrrnation foll,ws G64F
32. Regarding review procedures, v,rhich of tile followinll staternetlts is incorrect?
on
A. The auditor should apply the same materiali'iy cnn:ideratiorrs as woul<J be applied if an audit opinion
the financial statentents were given'
informatiorr on which the auditor is
B. Tlre judgment as to what is materia! is made ny refercnce to the
reporting and the needs of ttrose ietying on thar inforrnation, noi to
the level of assurance provided'
review than in an audit'
C. There is a lesser risk that miss,tatemenG will not L.e rjet*"cted in a
in ifre sr:ecific nature, timinq and extent of review
D. The auditsr should apply judgment determining
Procedures.
engagement?
33. Which of the following statements best descritres the otr.ierLive cf an auclit the auditor and the entity and any '
()f nature to which
A. For the auditor to carry out prmedr-rres an riutlit
appropriatethirdpartieshaveagreedan<ltcrr:porLonfactuaifindings.
itrr,r Lasis of pro*ldures whictr do not provide all [he
dvidence
B. To enable arr auditor to state *r,*Iil*r, the auditor
";r atterition that causes
that would be required in an audit, anythrng has come tr:
t-he aurJitor's
respects, in accordance with
to believe that the financial statsrnents an: ncrt preplre..d, in all ntaterial
generally acceptecl accounting principlec'
c^ To enable the auoitor to express an otii:-rion whetl]cr the ,.lnancial statements are prepared, in all material
prini'iples in the Philippines'
aspects, in acq:rdance with generaily accer;r-erJ itcccttri-rt:rrg classiFT and
D. For the accountant to use accounting *xpc.,rtrs':, "=, nrrpoi*d lc, auditing e:tpertise, to collect,
summarize financial infornration'
prccedures' v*rhich one is incorrect'?
34. The following statements pertain to agreed-ugrrr auditor and draw
A. Users *f the report flss€ss ror ttre'rnserruo ihu pi'ocedurts a:rrl finclings repr:rted by the
their own conclusions from the auditoi''s work'
B. The auditor shnuirJ conrluct the engagementparties iri acct-ri'dance urith Psl{s 4400'
C. The report need no[ be restr1cterl io peforminc
iiu**u that have agreed to the procedures to be perforrned:
D. Independence is not requrretj when lrn agrmtl-Lipcrn pmrcedures engagement'

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

39. Pursuant to RA9298, who owns audit working papers?


|r
I A. The auditor.
B. The client.
C. The audit client and the auditor have common fioint) ownership.
D. The Philippine Securities and Exchange Commission.
\,
i 40. The record of work pe#ormed, results obta;ned, and conclusions the practitioner reached.
A. Engagementdocumentation C. Current file
B. Audit program D. Permanent file
\. 41. The partner or other person in the firm who is responsible for the engagement and its performance, and for the
report that is issued on behalf of the firm, and who, where required, has the appropriate authority from a
professional, legal or regulatory body.
A. Engagement partner C. Personnel
B. Engagement quality control reviewer D. Suitably qualified external person

] 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

. number Yes No' Yes Yes

.
PTR
Birth date and contact numbei' Yes l\lo Nc No

n rrr ttre IRR shail have the following otliectives'


continuing professionar education prograrn mentioiled
r 57. lhe
.l*'[ provide and ensure the continuous 5rrul!o1,::,*:::1T:I-::*:f":'J1::::11*t
trends in the
professir:nbroughtaboutbyrnotJernizatio4andsrjiertlfir:sndt.echnologicaladvancelnent.
services'
foi" delivo-rring professional
B' To raise and maintain Lhe professir;nil;s capablliV
;.rrrJ ,l,:ality iri fie irractice r:f the profession'
c. To attain and mainrairr tlre higrresirtin,:arcu
pubi;c'
D. To promote the general welfare of t'ne
I 59.Whichofthefollowingisleast"|ikelycnnsiderelapartofthei'lr}ancialreprrrtingframerruork?
A. Generally u..u[tud auditing standards'
B. Generally sccepted accounlinc; prinbil:les'
C. Internatiorral financial reporting stanciar"ds
D'Anotherauthoritativearidcc'mrlrelleri:,iveb<i::iicir.-jporting'
**'nffi;i;,3""dA@'ntar.Y ATQ-I
,i 59. This type of engagement lacks the conclusion element; instead, users of the report assess for themselves the
i, procedures and findings reported by the practitioner and draw their own conclusions from the practitioner's
work:
A. Audit. C. Agreed-upon procedures.
B. Review. D. Compilation.

\I 60. One of the following is not a cause of information risk:


\i A. Voluminous data.
B" Biases and motives of the provider of information.
C. Remoteness of the information.
D, Simplicity of exchange kansactions.
t,'., 61. Which of the following statements is not a distinction between independent auditing and intemal audiUnq?
ii A. Independent auditors represent third party users external to the auditee entity, whereas intemal auditors
' report directly to management.
B. Although independent auditors strive for both validity and relevance of evidence, internal auditors are
concerned almost exclusively with validity.
C. Internal auditors are employees of the auditee, whereas external auditors are independent contractors.
D. The internal audito/s span of coverage goes beyond financial auditing to encompass operational and
performance auditing.

:, 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-

\t'/ rr. keCL{frr--,,,J, rtrvilrL..s . .-- rrr ll'


B. Basic competence at the time the certificate is qrarrteo'
C. Culmination of the educatir-rnal prccess-
D. MembershiP in thb PICPA'
7. 51: The President of the Philippines has the ;:r-rtherrity i(i renlt)vi;' arty' rnentber of the FJoard of ,Accountancy for
negligence, incompetence or d[ly other;1",t catlsc'
52: Possession of an unsounci mirrd rs not a grcurrci f<x th"., si l:;pen.'ion or revOcition of a CPA's certificate of
registration and professional ID card.
53: A lerson shall be consic;:re,J tc be in the professicrnarl practice of accounting if he/she is an officer in a
private enterprise, makes dcncisions reqrriring prot-ess;ional accountinq knort'ledge and the position requires
tlrat the holder should be a CPA.
A. False. false, true (," [rue, false, true
B. False, true, false D. False, false, false
(Numbers B to 10) Clement and Daniel, CPAs applied io," n{istration for accreditation to practice public
occountancy. Their applicatiorr was approved on July 30, 2trl4"

!.! B. When will the registration expire?


i
I A. Sept.30,2t)16 B. Dec' 3i,20LG C Juiy 30, 2017 D. Dec.3t,2Ol7
i;. g. Clement and Daniel, CPAs, should file for renewai cf regisiratiorl on or laefr:re:
f. A. July 30, 2016 B. Sept. 30, 2016 C. Julv i0, 2017 D" Sept.30,2017
10. Such renewal of registration shall be effective beginning:
A. Aug. 1,2CI16 8. Oct. 1,2C16 C. Jari. i, 2017 D. OcJ. 1,20t7

11. Which of the following statemerlts regarding "rfleanlngfill rlxpei'ience"is correct?


A. In commerce alrd industry, r.r,eaningiul experience irrckrdes siglnilicant involvement in generaland
accounting,
any other
br-rdgeting, tax aclministration, internal auditing, liaisr:n 'rtith the Comrnission on Audit,
related furrctions.
B. In public practirn, m'eaningfui exSrerience includes at least tv{o years as an ar.dit assistant and one year
as auditor-in-charqe of audit engagements coyering ful! audit functions nf significant clients.
Cl. In education/academe, nreaningtr.rt e.rperience shali include teaching for at least two semesters or three
trimesters, provi6ed the accumulatecl knowieclge in subjects taught shall not be less than three (3) school
years.
D. In governntent, meaning;ful experience inciurJes signilk:iant irtvolven'ient in general accounting, budgeting,
tax administr.uion, inteirral aurJitinq, liai:crr vlith exterrlal artditors and i"epresentation of employer before

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