ICCT Colleges Foundation Inc.

V.V Soliven Avenue II, Cainta, Rizal

1st trimester A.Y. 2018-2019

AUDIT01 – Assurance Prin. Professional Ethics & Good Governance

Instructions: Your paper will not be corrected if you will not do the following:
 Read directions/question carefully
 Use only black or blue ink for writing your answer
 Write your answer on the space provider
 Any form of erasures means wrong

Test I. Multiple Choice. Choose the letter of the correct answer. Write it in CAPITAL
LETTER.

__________1.It is conducted primarily to enable the auditor to express an opinion on

the entity’s financial statement
a. Audit of financial statement
b. Review of financial statement
c. Compilation of financial statement
d. Agreed-upon procedures engagement
__________2.Issued when the auditor believes, based on the evidence obtained, that
there are no material modifications that should be made to financial statement
a. Reporting Responsibility
b. Unmodified Review Report
c. Level of Assurance
d. Procedures to be Performed
__________3.The objective of these services that normally performed in connection
with entity’s financial statement is for the accountant to use accounting expertise, as
opposed to auditing expertise, to collect classify and summarize financial information.
a. Audit of financial statement
b. Review of financial statement
c. Compilation of financial statement
d. Agreed-upon procedures engagement
_______4.This type of engagement may be accepted provided if the client takes full
responsibility for the adequacy of the procedures to be performed
a. Limited Assurance Engagement
b. Reasonable Assurance Engagement
c. Assurance Engagement
d. Agreed-upon Procedure Engagement
__________5.Standard or benchmark used to evaluate or measure the subject matter
of an assurance engagement
a. Three-party Relationship
b. Criteria
c. Evidence
d. Assurance Report
__________6.It states that assurance engagements are 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.
a. PSAE 3000
b. PSAE 3400
c. PSAE 3410
d. PSAE 3420
__________7.The following are forms may take to the subject matter of an assurance
engagement except:
a. Data, System and Processes, Behavior and Physical Characteristics
b. Information, System and Processes, Behavior and Physical Characteristics
c. System and Processes, Behavior and Physical Characteristics
d. Data, System and Processes and Physical Characteristics
__________8.The practitioner should plan and perform the engagement to obtain
sufficient appropriate evidence to determine whether the assertions are free of material
misstatements.
a. Three-party Relationship
b. Criteria
c. Evidence
d. Assurance Report
__________9.Which of the following statements is NOT TRUE about PSAE 3400?
a. The auditor should obtain sufficient appropriate evidence that managements
best-estimate assumptions are reasonable and, in the case of hypothetical
assumptions, such assumptions are consistent with the purpose of the
information
b. The auditor should obtain sufficient appropriate evidence that the prospective
financial information is properly prepared on the basis of assumptions
c. The auditor should obtain sufficient appropriate evidence that the prospective
financial information is properly presented and all material assumptions are
adequately disclosed
d. The auditor should obtain sufficient appropriate evidence that the prospective
financial information is prepared on a consistent basis with future historical
statements
__________10.The review report should contain a clear written expression of negative
assurance. The auditor should review and assess the conclusion drawn from the
evidence obtained as the basis for the expression of negative assurance.
a. Reporting Responsibility
b. Unmodified Review Report
c. Level of Assurance
d. Procedures to be Performed

Test II. TRUE OR FALSE

__________1.The review report should contain a clear written expression of negative

assurance.
__________2.An auditor may be engaged to apply agreed-upon procedures on specific
account or element of a financial statement.
__________3.The objective of an agreed-upon procedures engagement is for the
accountant to use accounting expertise, as opposed to auditing expertise, to collect
classify and summarize financial information.
__________4.The report is restricted to those parties that have not agreed to the
procedures to be performed since others, unaware of the reasons for the procedures,
may misinterpret the results.
__________5.PSAE 3000 states that assurance engagements are 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.
__________6.The intended users responsible for the subject matter of the assurance
engagement.
__________7.With the frame of reference provided by these criteria, any conclusion is
open to individual interpretation and misunderstanding.
__________8.All engagement performed by professional accountant are assurance
engagement.
__________9.The auditor should evaluate the completeness and reasonableness of
the underlying assumptions as disclosed in the prospective financial information.
__________10.Assurance engagements involve separate parties such an dependent
and competent professional accountant who adheres to the fundamental principles
required by the Code of Ethics.