1.As guidance for measuring the quality of the performance of an auditor, the auditor should refer toA.Statements of Financial Accounting Standards Board.B.Philippine Standards on Auditing.C.Interpretations of Rules of Conduct.D.Statements on Quality Control Standards.2.Generally Accepted Auditing Standards (GAAS) and Philippine Standards on Auditing (PSA) should belooked upon by practitioner as
Ideals to work for, but which are not achievable.
Maximum standards which denote excellent work.
Minimum standards of performance which must be achieved on each audit engagement.
Benchmarks to be used on all audits, reviews, and compilations.
An auditor who accepts an audit engagement, but does not possess the industry expertise of the businessentity, shouldA.Engage financial experts familiar with the nature of the business entity.B.Obtain a knowledge of matters that relates to the nature of the entity’s business.C.Refer a substantial portion of the audit to another CPA who will act as the principal auditor.D.First inform the client management that an unqualified opinion cannot be issued.4.Which of the following statements best describes the primary purpose of Philippine Standards onAuditing?A.They are guides intended to set forth auditing procedures that are applicable to a variety of situations.B.They are procedural outlines which are intended to narrow down the areas of inconsistency anddivergence of auditor’s opinion.C.They are authoritative statements, enforced through the Code of Professional Conduct, that areintended to limit the degree of the auditor’s judgment.D.They are interpretations which are intended to clarify the meaning of “generally acceptedauditing standards”.5.An auditor need not abide by a Philippine Standard on Auditing if the auditor believes thatA.The amount is insignificant.B.The requirement of the PSA is impractical to perform.C.The requirement of the PSA is impossible to perform.D.Any of the given three choices is correct.6.Auditing standards areA.Statutory in nature.B.Rules imposed by the Securities and Exchange Commission.C.Rules imposed by the PICPA.D.General guidelines to help the auditor.