1.

The attest function:

A. Is an essential part of every engagement by the CPA, whether performing auditing,

tax work, or other services.
B. Includes the preparation of a report of the CPA's findings.
C. Requires a consideration of internal control.
D. Requires a complete review of all transactions during the period under
examination.

2. The review of a company's financial statements by a CPA firm:

A. Is substantially less in scope of procedures than an audit.

B. Requires detailed analysis of the major accounts.
C. Is of similar scope as an audit and adds similar credibility to the statements.
D. Culminates in issuance of a report expressing the CPA's opinion as to the fairness
of the statements.

3. Operational auditing is primarily oriented toward:

A. Future improvements to accomplish the goals of management.

B. The accuracy of data reflected in management's financial records.
C. The verification that a company's financial statements are fairly presented.
D. Past protection provided by existing internal control.

4. A typical objective of an operational audit is for the auditor to:

A. Determine whether the financial statements fairly present the entity's operations.
B. Evaluate the feasibility of attaining the entity's operational objectives.
C. Make recommendations for improving performance.
D. Report on the entity's relative success in attaining profit maximization.

5. For the highest degree of independence the director of internal auditing should report
directly to:

A. The controller.
B. The audit committee of the board of directors.
C. The executive vice-president.
D. The chief accountant.

6. Which of the following is correct relating to an engagement to apply agreed-upon

procedures to prospective financial statements?

A. Use of the report is restricted to the specified users.

B. Such engagements are permissible for forecasts but not for projections.
C. Responsibility for the adequacy of the procedures performed is taken by the
practitioner.
D. Such engagements are not permissible under the professional standards.

7. As used in auditing, which of the following statements best describes "assertions"?

A. Assertions are the representations of management as to the reliability of the

information system.
B. Assertions are the auditor's findings to be communicated in the audit report.
C. Assertions are the representations of management as to the fairness of the
financial statements.
D. Assertions are found only in the footnotes to the financial statements.

8. In assessing audit risk, the CPA needs to do all of the following except

A. Gather audit evidence in support of recorded transactions.

B. Obtain an understanding of the client's system of internal control.

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 C. Understand the economic substance of significant transactions completed by the
client.
D. Understand the entity and the industry in which it operates.

9. The objectives of the Philippine Accountancy Act of 2004 are the following, except:

A. Standardization and regulation of accounting education.

B. Integration of accountancy profession.
C. Examination for registration of certified public accountants.
D. Supervision, control and regulation of the practice of accountancy.

10. A CPA certificate is evidence of

A. Independence as a professional.
B. Basic competence at the time of certification.
C. Membership in the accredited association.
D. Completion of continuing professional education program

11. The following statements relate to RA 9298. Which statement is true?

A. The Professional Regulation Commission has the authority to remove any member of
the Board of Accountancy for negligence, incompetence, or any other just cause.
B. Insanity is not a ground for proceeding against a CPA.
C. A person shall be considered to be in the professional practice of accounting if,
as an officer in a private enterprise, he makes decisions requiring professional
accounting knowledge.
D. After three years, subject to certain conditions, the Board of Accountancy may
order the reinstatement of a CPA whose certificate of registration has been
revoked.

12. . No person shall serve the Professional Regulatory Board of Accountancy for more
than

A. 3 years
B. 6 years
C. 9 years
D. 12 years

13. Are the following CPAs required to comply with the requirements on continuing
professional education?

A B C D
• CPAs in Public Accountancy Yes Yes Yes Yes
• CPAs in Commerce and Industry Yes Yes No No
• CPAs in Education/Academe Yes Yes Yes No
• CPAs in Government Yes No Yes No

14. The Accountancy Law provided that a CPA certificate may be suspended or revoked on
grounds except
A. Immoral or dishonorable conduct.
B. Gross negligence or incompetence in the practice of profession.
C. Refusal to accept an audit engagement with a government corporation.
D. Conduct discreditable to the accounting profession.

15. Under the IRR of RA 9298, if a partner in a two-member partnership dies, the surviving
partner may continue to practice as an individual under the existing firm title which
includes the deceased partner’s name
A. For a period of time not to exceed five years.
B. For a period of time not to exceed two years.

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 C. Indefinitely.
D. Until the partnership payout to the deceased partner’s estate is terminated.

16. According to the profession's ethical standards, an auditor would be considered

independent in which of the following instances?
A. The auditor's checking account, which is fully insured by a PDIC, is held at a
client financial institution.
B. The auditor is also an attorney who advises the client as its general counsel.
C. An employee of the auditor donates service as treasurer of a charitable
organization that is a client.
D. The client owes the auditor fees for two consecutive annual audits.

17. A CPA purchased a stock in a client corporation and placed it in a trust as an

educational fund for the CPA's minor child. The trust securities were not material to
the CPA but were material to the child's personal net worth. Would the independence of
the CPA be considered to be impaired with respect to the client?
A. Yes, because the stock would be considered a direct financial interest and
consequently, materiality is not a factor.
B. Yes, because the stock would be considered an indirect financial interest that is
material to the CPA's child.
C. No, because the CPA would not be considered to have a direct financial interest
in the client.
D. No, because the CPA would not be considered to have a material indirect financial
interest in the client.

18. Safeguards created by the profession, legislation or regulation include the

following, except

A. Educational, training, and experience requirements for entry into the profession.
B. When the assurance client’s management appoints the firm, persons other than
management ratify or approve the appointment.
C. Continuing Professional Education (CPE) requirements.
D. Professional standards and monitoring and disciplinary processes.

19. Which of the following is NOT a factor to consider in determining the professional
fee of a professional accountant in public practice?

A. The skill and knowledge required for the type of professional services involved.
B. The result of the assurance work.
C. The level of training and experience of the persons necessarily engaged in
performing the professional services.
D. The time necessarily occupied by each person engaged in performing the
professional services.

20. Republic Act 9298 is known as the

A. Revised Accountancy Law

B. Code of Ethics for Professional Accountants.
C. Philippine Accountancy Act of 2004.
D. Philippine Accountancy Law of 2004.

21. To pass the CPA licensure examination, a candidate must obtain a

A. General average of sixty-five percent (65%), with no grades lower than seventy-
five percent (75%) in any given subject.
B. General average of seventy-five percent (75%), with no grades lower than sixty-
five percent (65%) in any given subject.
C. General average of seventy-five percent (75%).
D. General average of sixty-five percent (65%).

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22. The following statements relate to the practice of public accountancy. Which
statement is incorrect?

A. Single practitioners and partners of partnerships organized for the practice of

public accountancy shall be registered CPAs in the Philippines.
B. From the effectivity of RA 9298, a Certificate of Accreditation shall be issued
to CPAs in public practice only upon showing, in accordance with rules and
regulations promulgated by the Board and approved by the PRC, that such registrant
has acquired a minimum of two(2) years meaningful experience in any of the areas
of public practice including taxation.
C. A partnership engaged in the practice of public accountancy may be carried on in
the form of a general partnership (GP) or a limited liability partnership (LLP)
organized in accordance with Philippine laws.
D. The Securities Commission shall not register any corporation organized for the
practice of public accountancy.

23. A special/temporary permit may be issued by the Board of Accountancy (BOA) to the
following persons, except

A. A foreign CPA called for consultation or for a specific purpose which, in the
judgment of the BOA, is essential for the development of the country regardless
of whether there are Filipino CPAs who are qualified for such consultation or
specific purpose.
B. A foreign CPA engaged as a professor, lecturer or critic in fields essential to
accountancy education in the Philippines and his/her engagement is confined to
teaching only.
C. A foreign CPA who is an internationally recognized expert or with specialization
in any branch of accountancy and his/her service is essential for the advancement
of accountancy in the Philippines.
D. A foreign CPA called for consultation or for a specific purpose which, in the
judgment of the BOA, is essential for the development of the country and that
there is no Filipino CPA qualified for such consultation or specific purpose.

24. An accountant who reviews the financial statements of an entity should issue a report
stating that a review
A. Provides less assurance than an audit.
B. Provides negative assurance that internal control is functioning as designed.
C. Provides only limited assurance that the financial statements are fairly
presented.
D. Is substantially more in scope than a compilation.

25. Which of the following should not be included in an accountant’s report based upon
the compilation of an entity’s financial statements?
A. A statement that a compilation of the company’s financial statements was made in
accordance with the Philippine Standard on Related Services applicable to
compilation engagements.
B. A statement that management is responsible for the financial statements.
C. A statement that the accountant has not audited or reviewed the statements.
D. A statement that the accountant does not express an opinion but provides only
negative assurance on the statements.

26. In comparison to the independent auditor, an internal auditor is more likely to be

concerned with
A. Legal and regulatory compliance.
B. Cost accounting procedures.
C. Operational auditing.
D. Internal control system.

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27. Which element of a system of quality control is addressed by the establishment of
policies and procedures designed to provide the firm with reasonable assurance that it
has sufficient personnel with the competence, capabilities, and commitment to ethical
principles?
A. Monitoring
B. Leadership responsibilities for quality within the firm
C. Human resources
D. Engagement performance

28. The following circumstances create advocacy threats for a professional accountant
in public practice except
A. Promoting shares in an audit client.
B. Acting as an advocate on behalf of an audit client in litigation or disputes with
third parties.
C. A member of the assurance team having a significant close business relationship
with an assurance client.
D. Acting as campaign manager for the president of a client who is running for a
public office.

29. Which of the following threats to independence may be created by family and personal
relationships between a member of the assurance team and a director, an officer, or an
employee of the assurance client in a position to exert direct and significant influence
over the subject matter information of the assurance engagement?
A. Self-review, familiarity, or advocacy threats
B. Advocacy, familiarity or self-review threats
C. Self-interest, familiarity or intimidation threats
D. Self-interest, advocacy or self-review threats

30. The following statements relate to the provision of legal services to an audit
client. Which is incorrect?
A. Legal services to support an audit client in the execution of a transaction (e.g.,
contract support) may create a self-review threat.
B. Acting for an audit client in the resolution of a dispute or litigation in such
circumstances when the amounts involved are material in relation to the financial
statements of the audit client would create advocacy and self-review threats so
significant no safeguards could reduce the threats to an acceptable level.
C. The provision of legal services to an audit client involving matters that would
not be expected to have a material effect on the financial statements may create
a self-review threat.
D. The appointment of a partner or an employee of the firm or network firm as General
Counsel for legal affairs to an audit client would create self-review and advocacy
threats that are so significant no safeguards could reduce the threats to an
acceptable level.

31. As defined in the Code of Ethics, __________ is the communication to the public of
facts about a professional accountant which are not designed for the deliberate promotion
of that professional accountant.
A. Advertising
B. Publicity
C. Solicitation
D. Marketing professional services

32. As defined in the Code, “a valuation comprises the making of assumptions with regard
to future developments, the application of certain methodologies and techniques, and the
combination of both in order to compute a certain value, or range of values, for an
asset, a liability or for a business as a whole.” Which of the following threats may
be created when a firm or a network firm performs valuation for an audit client that is
to be incorporated in the client’s financial statements?

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 A. Advocacy threat
B. Familiarity threat
C. Self-review threat
D. Intimidation threat

33. The following forms of assistance to a financial statement audit client do not
generally threaten the firm’s independence, except
A. Analyzing and accumulating information for regulatory reporting.
B. Assisting in resolving account reconciliation problems.
C. Authorizing or approving transactions.
D. Assisting in the preparation of consolidated financial statements.

34. When an immediate family member of a member of the assurance team is a director, an
officer, or an employee of the assurance client in a position to exert direct and
significant influence over the subject matter information of the assurance engagement,
or was in such a position during the period covered by the engagement, the threats to
independence can only be reduced to an acceptable level by
A. Where possible, structuring the responsibilities of the assurance team so that
the professional does not deal with matters that are within the responsibility of
the immediate family member.
B. Withdrawing from the assurance engagement.
C. Removing the individual from the assurance team.
D. Discussing the issue with those charged with governance, such as the audit
committee.

35. A close business relationship between a firm or a member of the audit team, or a
member of that individual’s immediate family, and the audit client or its management
may create
A. Self-interest and intimidation threats
B. Self-review and familiarity threats
C. Advocacy and self-review threats
D. Self-interest and self-review threats

36. A loan, or guarantee of a loan, to the firm from an audit client that is a bank
or a similar institution, would not create a threat to independence provided
I. The loan, or guarantee, is made under normal lending procedures, terms and
requirements.
II. The loan is material to both the firm receiving the loan and the audit client.
A. I only
B. II only
C. Neither I nor II
D. Both I and II

37. The following statements relate to the term of office of the chairman and members
of the Board of Accountancy (BOA). Which is false?
A. The chairman and members of the BOA shall hold office for a term of three (3)
years.
B. Any vacancy occurring within the term of a member shall be filled up for the
unexpired portion of the term only.
C. No person who has served two successive complete terms as chairman or member shall
be eligible for reappointment until the lapse of two (2) years.
D. Appointment to fill up an unexpired term is not to be considered as a complete
term.

38. Which of the following services, if any, may a practitioner who is not independent
provide?
A. Compilations but not agreed-upon.
B. Reviews but not compilations.

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 C. Reviews but not financial statement audits.
D. Agreed-upon procedures but not review.

39. Professional accountants should be aware of and consider Practice Statements

applicable to the engagement.

A professional accountant who does not consider and apply the guidance included in a
relevant Practice Statement need not explain how the basic principles and essential
procedures in the Engagement Standard(s) addressed by the Practice Statement have been
complied with.

A. Both statements are true.

B. Both statements are false.
C. True; False
D. False; True

40. Certain fundamental beliefs called "postulates" underlie auditing theory. Which of
the following is not a postulate of auditing?

A. No long-term conflict exists between the auditor and the management of the
enterprise under audit.
B. Economic assertions can be verified.
C. An audit has a benefit only to the owners
D. The auditor acts exclusively as an auditor.

41. Assurance engagement

A. Is an engagement in which a practitioner is engaged to issue, or does issue, a

written communication that expresses a conclusion about the reliability of a
written assertion that is the responsibility of another party.
B. Is a systematic process of objectively obtaining and evaluating evidence regarding
assertions about economic actions and events to ascertain the degree of
correspondence between those assertions and established criteria and
communicating the results to interested users.
C. Is an engagement intended to enhance the credibility of information about a
subject matter by evaluating whether the subject matter conforms in all material
respects with suitable criteria, thereby improving the likelihood that the
information will meet the needs of an intended user.
D. Is an engagement in which the auditor provides a moderate level of assurance that
the information subject to the engagement is free of material misstatement.

42. Which of the following procedures is normally performed in connection with a

compilation engagement?

A. Inquire of management about subsequent events

B. Making inquiries of management concerning actions taken at board meeting
C. Applying analytical review procedures
D. Collect, classify and summarize financial information.

43. If the auditor learns that an entity is inappropriately using the auditor’s name in
association with financial information, he/she should:

A. Remain silent.
B. Require management to cease doing so.
C. Inform any known third party users of the inappropriate use of his/her name in
connection with the information.
D. Seek legal advice if necessary.

44. Assurance engagement include the following, except

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 A. An engagement conducted to provide a high level of assurance that the subject
matter conforms in all material respects with identified suitable criteria.
B. An engagement to perform agreed-upon procedures.
C. An engagement conducted to provide a moderate level of assurance that the subject
matter is plausible in the circumstances.
D. An engagement in accordance with the Philippine Standard on Assurance
Engagement(s).

45. Which of the following is not a characteristic of suitable criteria?

A. Completeness B. Comparability C. Neutrality D. Relevance

46. Which of the following has the primary responsibility for the fairness of the
representations made in the financial statements?

A. Client’s management
B. Audit committee
C. Independent auditor
D. Board of Accountancy

47. e procedure deemed necessary in the circumstances to achieve the objective of a

financial statement audit shall be determined by the

A. Client’s management
B. Audit committee
C. Independent auditor
D. Board of Accountancy

48. The Philippine Framework for Assurance Engagements

A. Contains basic principles, essential procedures, and related guidance for the
performance of assurance engagements.
B. Defines and describes the elements and objectives of an assurance engagement,
and identifies engagements to which PSAs, PSREs, and PSAEs apply.
C. Provides a frame of reference for CPAs in public practice when performing audits,
reviews, and compilations of historical financial information.
D. Establishes standards and provides procedural requirements for the performance
of assurance engagements.

49. What is the proper organizational role of internal auditing?

A. To assist the external auditor in order to reduce external audit fees.

B. To serve as an independent, objective assurance and consulting activity that adds
value to operations.
C. To perform studies to assist in the attainment of more efficient operations.
D. To serve as the investigative arm of the audit committee of the board of directors.

50. The following statements relate to the term of office of the chairman and members
of the Board of Accountancy (BOA). Which is false?

A. The chairman and members of the BOA shall hold office for a term of three (3)
years.
B. Any vacancy occurring within the term of a member shall be filled up for the
unexpired portion of the term only.
C. Appointment to fill up an unexpired term is not to be considered as a complete
term.

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 D. No person who has served two successive complete terms as chairman or member shall
be eligible for reappointment until the lapse of two (2) years.

51. An operational audit has as one of its objectives to:

A. determine whether the financial statements fairly present the

entity’s operations.
B. evaluate the feasibility of attaining the entity’s operational
objectives.
C. make recommendations for improving performance.
D. report on the entity’s relative success in attaining profit
maximization.
52. Which of the following services provides the lowest level of assurance
on a financial statement?
A. A review.
B. An audit.
C. Neither service provides assurance on financial statements.
D. Each service provides the same level of assurance on financial
statements.

53. Fees calculated on a predetermined basis relating to the outcome or

result of a transaction or the result of the work preformed.

A. Contingent fees
B. Flat sum fees
C. Retainer fees
D. Per diem fees

54. Family and personal relationships between a member of the assurance

team and a director, an officer or certain employees, depending on their
role, of the assurance client, least likely create

A. Self-interest threat
B. Intimidation threat
C. Self-review threat
D. Familiarity threat
55. Occurs when a firm, or a member of the assurance team, promotes, or may be perceived
to promote, an assurance client’s position or opinion to the point that objectivity may,
or may be perceived to be, compromised. Such may be the case if a firm or a member of
the assurance team were to subordinate their judgment to that of the client.

A. Self-interest threat
B. Advocacy threat
C. Self-review threat
D. Familiarity threat

56. Which of the following is incorrect regarding professional competence?

A. Professional competence may be divided into two separate phases.

B. The attainment of professional competence requires initially a high standard of
general education.
C. Professional accountants may portray themselves as having expertise or experience
they do not possess.
D. The maintenance of professional competence requires a continuing awareness of
development in the accountancy profession.

57. Below are the names of three CPA firms and pertinent facts relative to each firm.
Unless otherwise indicated, the individuals named are CPAs and partners, and there are

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no other partners. Which firm name and related facts indicates a violation of the IRR
of RA 9298?
A. Joyce, Ara and Angela, CPAs (Joyce died about 10 years ago, Ara and Angela are
continuing the firm)
B. Lupin and Fujico, CPAs ( the name of Goymon a third active partner is omitted in
the firm name)
C. Hugo and Pugo, CPAs (Bibi died 3 years ago, Bobot was admitted into the partnership
2 months after Bibi’s death.)
D. Bubu and Bibi, CPAs (Bubu died 25 months ago, Bibi is continuing the firm as a
sole proprietor)

58. Indicate whether the following functions would be performed by:

P – Partner S – Senior M – Manager AS – Audit Assistant
(1) Signs audit report
(2) Overall responsibility for audit
(3) Performs detailed audit procedures
(4) Supervises two or more concurrent audit engagements

(1) (2) (3) (4)

A. P AS S M
B. M S M P
C. M AS P P
D. P P AS M

59. Any person who shall violate any of the provisions of the Philippines Accountancy
Act or any of its IRR promulgated by the Board of Accountancy subject to the approval
of the PRC, shall upon conviction, be punished by

A. A fine of not less than P50,000 or by imprisonment for a period exceeding two
years or both
B. A fine of not less than P50,000 or by imprisonment for a period not exceeding two
years
C. A fine of not less than P50,000 or by imprisonment for a period not exceeding two
years or both
D. A fine of not less than P50,000 and by imprisonment for a period not exceeding
two years

60. As defined in Annex "C" of the IRR, this refers to the inculcation, assimilation and
acquisition of knowledge, skills, proficiency and ethical and moral values, after the
initial registration of a professional that raise and enhance the professional's
technical skills and competence.

A. Professional Development
B. Continuing Professional Education
C. Continuing Professional Development
D. Professional Growth and Development

61. A CPA whose certificate has been revoked:

A. May be reinstated by the PRC after the expiration of 3 years from the date of
revocation.
B. May be reinstated by the PRC after the expiration of 2 years from the date of
revocation.
C. May be reinstated by the BOA after the expiration of 2 years from the date of
revocation.
D. May be reinstated by the BOA after the expiration of 3 years from the date of
revocation.

62. A candidate who obtains the rating of seventy-five percent (75%) and above in at
least a majority of the subjects shall receive a conditional credit for the subjects
passed. He/she shall take an examination in the remaining subjects within
A. One (1) year from the preceding examination.

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 B. Two (2) years from the preceding examination.
C. Three (3) years from the preceding examination.
D. Five (5) years from the preceding examination.

63. Which of the following is not a requisite in applying for the CPA licensure
examinations?
A. Good moral character
B. Natural-born citizen of the Philippines
C. Holder of the degree of Bachelor of Science in Accountancy
D. Has not been convicted of any criminal offense involving moral turpitude

64. The sector that is most represented in the AASC is the:

A. Commerce and Industry
B. Academe
C. Public Practice
D. Government

65. A CPA is in public accounting practice when he/she:

A. Holds, or is appointed to, in an accounting professional group in government or
in a government-owned and/or controlled corporation where decision making requires
professional knowledge in the science of accounting.
B. Represents his/her clients before government agencies on tax and other matters
related to accounting.
C. Represents his/her employer before government agencies on tax and other matters
related to accounting.
D. Teaches accounting, auditing, management advisory services, accounting aspect of
finance, business law, taxation, and other technically related subjects.

66. The "hallmark" of auditing is

A. Professional competence.
B. Professional judgment.
C. Generally accepted auditing standards.
D. Professional behavior.

67. The two most important qualities for an operational auditor are:
A. personality and appearance.
B. independence and technical training.
C. competence and independence.
D. academic background and sufficient experience.

68. . PSA 220 requires the engagement partner to consider whether members of the
engagement team have complied with the ethical requirements relating to audit
engagements. The Code of Ethics establishes the fundamental principles of professional
ethics, which include
I. Integrity
II.Objectivity
III.Professional competence and due care
IV.Confidentiality
V. Professional behavior
A. I, II, IV, and V only C. I, III, IV, and V only
B. II,III,IV, and V only D. I,II,III,IV, and V only

69. Under PAS 1, the term "PFRS" shall be comprised of

A. PAS only
B. PFRS and PAS
C. PFRS only
D. PFRS, PAS and Interpretations

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70. What is the branch of accounting that is most related with the accounting sector
"Association of CPAs in Commerce and Industry (ACPACI)?”
A. Public accounting
B. Government accounting
C. Private accounting
D. Accounting education

71. This standard setting body shall have a chairman who had been or presently a senior
accounting practitioner in any scope of accounting practice.
A. FRSC
B. AASC
C. PICPA
D. ACPAPP

72. This standard setting body shall have a chairman who had been or presently a senior
accounting practitioner in public accountancy.
A. FRSC
B. AASC
C. PICPA
D. ACPAPP

73. The SEC is composed of a chairperson and four commissioners appointed by the President
of the Philippines for a term of
A. 3 years
B. 6 years
C. 7 years
D. 8 years

74. Which of the following is not a function of the BSP?

A. Supervise banks and exercise regulatory powers over non-bank institutions
performing quasi-bank functions
B. Determine the exchange rate policy of the Philippines
C. Recommend measures to improve the efficiency and effectiveness of government
operations
D. Extend discounts, loans and receivables to banking institutions for liquidity
purposes.

75. The COA is composed of

A. A chairman and three commissioners
B. A chairman and four commissioners
C. A chairman and two commissioners
D. A chairman and a commissioner

76. Which of the following is not one of the principal duties of the COA?
A. Keep the general accounts of the government and preserve the vouchers and
supporting papers pertaining thereto.
B. Promulgate accounting and auditing rules and regulations including those for the
prevention and disallowance of irregular, unnecessary, excessive, extravagant or
unconscionable expenditures or uses of government funds and properties
C. Submit to the President of the Philippines and Congress, within the time fixed by
law, an annual report covering the financial condition and operation of the
government
D. Maintain price stability conducive to a balanced and sustainable economic growth

77. Which of the following shall be issued to examinees who pass the CPA licensure
examination?
A. Certificate of accreditation and professional identification card
B. Certificate of registration or professional identification card

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 C. Certificate of full compliance and professional identification card
D. Professional identification card and Certificate of registration

78. Pursuant to the IRR of the Philippine Accountancy Act of 2004, the Accounting
Standards Council (ASC) was replaced by the
A. Auditing and Assurance Standards Council (AASC)
B. Financial Reporting Standards Council (FRSC)
C. Association of CPAs in Education (ACPAE)
D. Education Technical Council (ETC)

79. The reason an independent auditor gathers evidence is to

A. Form an opinion on the financial statements
B. Detect fraud
C. Evaluate management’s performance
D. Evaluate the entity’s internal control

80. In financial statement audits, the audit process should be conducted in accordance
with
A. Philippine Standards on Accounting
B. Philippine Standards on Auditing
C. Philippine Accounting Standards
D. Philippine Financial Reporting Standards

81. The following statements relate to the BOA. Which statements is correct?
A. The Chairman and members are appointed by the President of the Philippines upon
recommendation of PICPA
B. The Professional Regulation Commission may remove from the Board any member whose
certificate to practice has been removed or suspended.
C. Majority of the board members shall as much as possible be in public practice.
D. The Board consists of a Chairman and six members

82. Unless otherwise exempted, registered CPAs in the practice of accountancy who have
not completed the CPE requirements shall
A. Be dropped from the roster of CPAs
B. Not be allowed to renew their professional licenses
C. Present evidence to the satisfaction of the Board that they have the necessary
knowledge, skills and experience to discharge their responsibility
D. Submit a letter addressed to the Board indicating the reasons for not complying
with the CPE requirements

83. Which of the following is not one of the functions of the Board of Accountancy
specifically provided under the RA 9298?
A. To monitor the conditions affecting the practice of accountancy and adopt such
measures deemed proper for the enhancement and maintenance of high professional,
ethical, accounting and auditing standards.
B. To make investigations as it deems necessary to determine whether any person has
violated any provisions of this law or any standards promulgated by the Board as
part of the rules governing the practice of accountancy
C. To delegate its power and function to determine and prepare test questions for
the CPA licensure examination.
D. To conduct an oversight into the quality of audits of financial statements through
a review of the quality control measures

84. As used in the Philippine Framework for Assurance Engagements, the term
“practitioner” refers to a CPA in public practice.
In a limited assurance engagement, the practitioner expresses his/her conclusion in
positive form.
A. True; False

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 B. Both statements are true
C. False; True
D. Both statements are false

85. Common examples of assurance engagements are engagements to apply agreed-upon

procedures and consulting.

A summary of findings rather than assurance is most likely to be included in an

examination report.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

86. Independence is not a requirement for a compilation engagement.

For agreed-upon procedures and compilation engagements, no assurance is expressed.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

87. PSA 120 (Framework of Philippine Standards on Auditing) applies to audits and related
services such as taxation and consultancy.

The Certificate of Registration issued to successful examination is renewable every

three years.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

88. RA no. 9298 is also known as the Philippine Accountancy Law of 2004.

One credit hour of CPE program, activity or source shall be equivalent to two credit
unit.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

89. No person shall serve in the Board for less than twelve years.

The risk that information is misstated is referred to as business risk.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

90. A certificate of accreditation issued only after showing that the registrant has
acquired the minimum 3 years meaningful experience in any of the areas of accountancy
(whether in the public accountancy, commerce and industry, education/academe and
government)

The SEC shall not register any corporation organized for the practice of public
accountancy. In other words, corporation form of CPA firm is not allowed.

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 A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

91. The PRC is the official government agency empowered to enforce RA 9298.

PRC is under the supervision and administrative control of the BOA.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

92. The Chairman and the members of the BOA members shall hold office for a term of 12
years.

Any vacancy during the term of a member shall be filled up for the unexpired portion of
the term only. Appointment to fill up an unexpired term is not to be construed as a
complete term.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

93. Which of the following is a function of the Board of Accountancy?

I. To prescribe and adopt the rules and regulations necessary for carrying out the
provisions of this Act (RA 9298)

II. To supervise the registration, licensure and practice of accountancy in the

Philippines;

III. To administer oaths

A. I and II only
B. I and III only
C. II and III only
D. I,II and III

94. Which of the following is a function of the Board of Accountancy?

I. To issue, suspend, revoke, or reinstate the Certificate of Registration for the

practice of the accountancy profession

II. To adopt its own official seal

III. Conduct quality review on applicants for registration to practice accountancy and
render a report which shall be attached to the application for registration.

A. I and II only
B. I and III only
C. II and III only
D. I,II and III

95. Which of the following is a function of the Board of Accountancy?

I. To ensure, in coordination with the Commission on Higher Education (CHED) or other

authorized government offices that all higher educational instruction and offering of

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accountancy comply with the policies, standards and requirements of the course prescribed
by CHED or other authorized government offices in the areas of curriculum, faculty,
library and facilities.

II. Promulgate accounting and auditing rules and regulations including those for the
prevention of irregular, unnecessary, excessive or extravagant expenditures or uses of
funds and property.

III. To prepare, adopt, issue or amend the syllabi of the subjects for examinations in
consultation with the academe, determine and prepare questions for the licensure
examination which shall strictly be within the scope of the syllabi of the subjects for
examinations as well as administer, correct and release the results of the licensure
examinations

A. I and II only
B. I and III only
C. II and III only
D. I,II and III

96. All applicants for registration for the practice of accountancy shall be required
to undergo a licensure examination to be given by the BOA in such places and dates as
the PRC may designate subject to compliance with the requirements prescribed by the PRC
in accordance with Republic Act No. 8981.

The Board, subject to the approval of the Commission, may revise or exclude any of the
subjects and their syllabi, and add new ones as the need arises.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

97. Certificate of Registration is a certificate under seal, issued by the Commission

upon the recommendation by the Board pursuant to this revised rules and regulation,
attesting that Individual CPAs, including the staff members thereof, Firms, including
the sole proprietors and the staff members thereof and Partnerships of CPAs including
the partners and the staff members thereof, are duly accredited to practice public
accountancy in the Philippines.

Certificate of Accreditation is a certificate under seal bearing a registration number,

issued to an individual, by the Commission, upon recommendation by the Board, signifying
that the individual has complied with all the legal and procedural requirements for such
issuance including, in appropriate cases, having successfully passed the CPA licensure
examination.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

98. Professional Identification Card is a card with validity of three (3) years, bearing
the registration number, date of issuance with an expiry date, due for periodic renewal,
duly signed by the Chairperson of the Commission issued by the BOA to a registered CPA
upon payment of the annual registration fees for three (3) years.

Certificate of Accreditation is a certificate under seal bearing a registration number,

issued to an individual, by the Commission, upon recommendation by the Board, signifying
that the individual has complied with all the legal and procedural requirements for such
issuance including, in appropriate cases, having successfully passed the CPA licensure
examination.
A. True; False
B. Both statements are true

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 C. False; True
D. Both statements are false

99. Commission or PRC is the Professional Regulation Commission of the Philippines

created under Republic Act No. 8981.

Board or BOA is the Professional Regulatory Board of Accountancy of the Philippines

created under Republic Act No. 9298.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

100. Subjects or citizens of foreign countries may be allowed to practice Accountancy

in the Philippines in accordance with the provisions of existing laws, international
treaty obligations including mutual recognition agreements entered into by the Philippine
government with other countries.

A person who is not a citizen of the Philippines shall not be allowed to practice
accountancy in the Philippines unless he/she can prove, in the manner provided by the
rules of court that, by specific provision of law, the country of which he/she is a
citizen, subject or national admits citizens of the Philippines to the practice of the
same profession without restriction.

A. True; False
B. Both statements are true
C. False; True
D. Both statements are false

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