Professional Documents
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Overview of The Ms Practice by The Cpa
Overview of The Ms Practice by The Cpa
7-D
8.
a.
b.
c.
d.
8-C
9. In financial accounting, certain rules and regulations must be followed on how
financial statements must be presented to the reader. In managerial accounting, no
such restrictions generally apply because it is:
a. An entirely different field that need not observe the broad guidelines in
financial accounting.
b. Designed to provide management with non-financial information for decisionmaking.
c. Designed to provide accounting and other financial data to assist management in
making business decisions.
d. A discipline that does not require preparation of other financial statements.
e. All of the above.
9-C
10.
Which of the following characteristics relate to Financial Accounting?
a. Reports are promptly prepared and submitted to preserve its usefulness.
b. Data may be both historical and estimates.
c. It must adhere to the generally accepted accounting principles.
d. It provides information needed by management in making decisions.
10-C
11.
The following characteristics refer to Financial Accounting except
a. Provides information to external users
b. Emphasizes on objective data
c. Has no externally imposed standards
d. Generates general purpose financial statements
11-C
12.
To distinguish between management accounting and financial accounting, the
following statements are correct, except
a. Management accounting, in view of its various integrated recipients should have a
separate data recording and retrieval system from financial accounting.
b. Financial accounting is bound by GAAP, and management accounting need not be in
conformity with GAAP.
c. Financial accounting can be regarded as the process while management accounting
can be regarded as the product of the process.
d. Management accounting output must be released on time so as not to erode its
usefulness; Financial accounting output can still be useful even when delayed.
12-A
13.
Which of the following is a Controllers responsibility?
a. Tax planning and accounting
c. In charge of credit and collection
b. Custodian of funds
d. Arranging short-term financing
13-A
14.
You were newly appointed as controller of CZX Corporation. Among the jobs
your department would do include the following:
a. Cash receipts, cash disbursements, general accounting, taxation, financial
accounting analysis, and internal auditing.
b. Financial reporting, strategic planning, managerial accounting, taxation,
financial statement analysis, and internal accounting.
c. Financial accounting, managerial accounting, cost accounting, inventory
accounting, payroll accounting, tax accounting and sales forecasting.
d. Tax accounting, managerial accounting, internal auditing, general accounting.
14-D
15.
Controllership has attained special recognition in corporate management as
business expands in complexity and reach, and as the controller exerts influence for
management to take organizations goals. Controllership and treasurership
constitute corporate finance. These are among the controllers traditional
functions:
1. Tax management.
2. Financial reporting and interpretation.
3. Credit management.
4. Sourcing and investing of funds.
5. Reporting to government regulatory agencies.
6. Risk management.
7. Economic appraisal.
8. Planning for control.
a. All eight items.
c. Items 1, 2, 3, 4, 5, 7, and 8 only.
b. Items 1, 2, 5, 7, and 8 only. d. 2, 3, 5, and 7, and 8 only.
15-B
16.
The chief management accountant called controller traditionally performs
these functions except:
a. The establishment and implementation of the financial planning process.
b. Financial and management reporting and interpretation.
c. Protection of company resources and economic evaluation.
d. Preparation of proposals for product promotions.
16-D
17.
As business increase in complexity, the function of controllership has
attained top level recognition in the corporate area. Many areas related to finance
and accounting have been identified with controllership. One area that becomes
controversial when included under the controller and viewed that such inclusion
violates basic internal control is
a. Credit and collection.
b. Internal auditing.
c. Long-range financial planning.
d. Taxation and reporting to government agencies.
17-B
18.
Which of the following is not usually a controllers function?
a. Planning for control.
c. Tax administration.
b. Protection of assets.
d. Credit and collection.
18-D
19.
Which of the following is not a Controllers function?
a. In charge of planning and control
b. Protection of assets such as adequate insurance coverage. Etc.
c. Interpreting and reporting on effects of external factors on the business
d. Arranging short-term financing
19-D
20.
Controllers are generally not concerned with
a. Reporting to government c. Protection of assets
b. Preparation of tax returns d. Investor relations
20-D
21.
Which of the following is a Controllers responsibility?
a. Tax planning and accounting
c. In charge of credit and collection
b. Custodian of funds
d. Arranging short-term financing
21-A
22.
Which of the following is not a controllership function, as distinguished from
a treasury function?
a. Reporting and interpreting c. Protection of assets
b. Credit and collection
d. Government reporting
22-B
23.
The primary purpose of management advisory services is
a. To conduct special studies, preparation of recommendation, development plans and
programs, and provision of advise and assistance in their implementation.
b. To provide service or to fulfill some social need.
c. To improve the clients use of its capabilities & resources to achieve the
objectives of the organization.
d. To earn the best rate of return on resources entrusted to its care with safety of
investment being taken into account and consistent with the firms social and legal
responsibilities.
23-C
24.
Which of the following statements is not true?
a. In the rendition of MAS, independence must be observed so as to maintain the
essential requisites of impartiality and objectivity.
b. All provisions of the code of professional ethics are applicable to the practice
of MAS except those rules related to the expression of an opinion on financial
statements.
c. MAS serves only in the areas of accounting and finance.
d. Before accepting an engagement, a practitioner should notify the client of any
reservations he has regarding anticipated benefits.
24-C
25.
Which of the following acts is not performed by an independent CPA engaged to
install an accounting system?
a. Formulation of the chart of accounts
b. Design of business and accounting forms
c. Supervision of application of system and procedures recommended
d. Preparation of an accounting manual.
25-C
26.
The following characterize management advisory services except
a. Involve decision for the future.
b. Broader in scope and varied in nature.
c. Utilize more junior staff than senior members of the firm.
d. Relate to specific problems where expert help is required.
26-C
27.
Which of the following is not a characteristic of management services?
a. A wider variety of assignments are encountered in MAS than in audit.
b. MAS engagements are recurring.
c. MAS pinpoint actions to be taken, the benefits of which will be received in the
future.
d. In MAS engagements, the nature of work involved requires a lesser need for junior
assistance.
27-B
28.
Which of the following is not a characteristic of Management Advisory
Services?
a. MAS is broad in scope
b. MAS involves problem-solving affecting the future operations of the client
c. Beneficiary of service is management
d. MAS is repetitive as far as the same client is concerned
28-D
29.
Which of the following types of management services is normally related to
accounting and finance?
a. Management audit.
b. Marketing forecasts.
c. Costs determination of alternatives in collective bargaining agreements.
d. Job evaluation and salary administration.
29-C
30.
Which of the following types of management services is not directly related to
accounting and finance functions?
a. Cost analysis of major investment decision.
b. Long range planning.
c. Design, installation and review of budgetary system.
d. Valuation of capital stock of companies for purposes of merger or sales.
30-B
31.
A certified public accountants scope of management services is broad and
covers all of the following except
a. Change management engagements.
c. Audit engagements.
b. Computerization engagements. d. Re-engineering jobs.
31-C
32.
Which of the following is not classifiable as a management advisory service by
CPAs?
a. Systems design.
c. Make or buy analysis.
43.
The Revised Accountancy Law incorporates the Code of Professional Ethics for
CPAs. The provision of management advisory services is among the areas of public
accounting. It is, however, not exclusive to CPAs. Considering these premises,
which of the following statements is applicable?
a. Management advisory services as a field of practice is considered as an integral
part of public accounting thus, the Code of Professional Ethics for CPAs covers
management advisory services.
b. CPAs in the practice of audit and management consulting services may advertise
and charge contingent fees.
c. The practice of management advisory services should not be extended to existing
audit clients since this will adversely affect the CPAs independence.
d. CPAs in the practice of management advisory services are not bound by the Board
of Accountancy but are bound by the said law in the practice of audit.
43-A
44.
Which of the following statements is False?
a. CPAs provide management services to go around the ethical constraints as mandated
by the Accountancy Act.
b. Businesses hire management consultants to help define specific problems and
develop solutions.
c. Included in the practice of consulting is the provision of confidential service
in which the identity of the client is concealed.
d. CPAs performing management services may be considered to be in the practice of
management consulting.
44-A
45.
Which of the following statements is not acceptable?
a. A CPA represents three major players in the industry in rationalizing the
industrys incentive before the government public hearing.
b. A CPA shares with a new and substantial client information regarding another
client belonging to the same industry.
c. A CPA provides consulting services to an existing audit client.
d. A CPA offers and provides consulting services to two major competing client.
45-B
46.
Mr. Rey Carlos, a CPA firms partner-in-charge of quality assurance and review
is arguing with Mr. Reuben Fortuna, the consulting partner regarding the question of
independence as Mr. Fortuna is presently rendering consulting services to T. Ang and
Nga Co., an audit client of the firm. Related to this issue of independence, all of
the following statements are not valid except
a. Independence is never sacrificed for as long as the auditor/consultant is correct
in his decisions for the client.
b. A CPA who renders both audit and consulting services to a client by virtue of his
competence/expertise and extensive knowledge of the clients business is in the best
position to render decisions for the client and should do so.
c. The client is the ultimate decision maker and the auditor and/or consultant
should not make decisions for the client.
d. It is us up to professional judgment and discretion of the auditor/ consultant to
render decisions for the client for as long as his professional fees are
commensurate to the benefit that the client will derive from the engagement.
46-C
47.
Which of the following acts is not performed by an independent CPA engaged to
design the accounting system?
a.
b.
c.
d.
47-C
48.
Which of the following will not impair the independence of a CPA in the
rendition of Management Services?
a. The CPA performs decision-making services for his client.
b. The CPA performs services wherein he is in effect, acting as an employee of the
client.
c. The CPA loses his objectivity and acts in a manner as if he is advocating for the
interest of his client.
d. The CPA does not extend his services beyond the presentation of recommendations
or giving of advice.
48-D
49.
A CPA should reject management advisory services engagement if
a. It would require him to make management decisions for an audit client.
b. The proposed engagement is not accounting related.
c. His recommendations are to be subjected to a review by the client.
d. He audits the financial statements of a subsidiary of the prospective client.
49-A
50.
After preliminary audit arrangements have been made, an engagement
confirmation letter should be sent to the client. This letter usually should not
include
a. An estimate of the time to be spent on the audit work by audit staff and
management.
b. A reference to the auditors responsibility for the detection of errors and
irregularities.
c. A statement that management advisory services would be available upon request.
d. A statement that management letter will be issued outlining comments and
suggestions as to any procedures requiring the clients attention.
50-C
ANSWER KEY
1. C 11. C
2. B 12. A
3. B 13. A
4. B 14. D
5. A 15. B
6. B 16. D
7. D 17. B
8. C 18. D
9. C 19. D
10. C
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
D
A
B
C
C
C
C
B
D
C
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
B
C
D
B
D
D
D
D
D
A
40.
41. D
42. C
43. A
44. A
45. B
46. C
47. C
48. D
49. A
A 50.