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Source: Auditing Theory by Ma. Elenita Balatbat Cabrera & Gilbert Anthony Cabrera

601001 - IS AN INDIVIDUAL WHO HOLDS A VALID PROFESSIONAL ACCOUNTANT OR CERTIFIED PUBLIC

CERTIFICATE ISSUED BY THE BOARD OF ACCOUNTANCY, ACCOUNTANT
WHETHER HE/SHE BE IN PUBLIC PRACTICE, INDUSTRY,
COMMERCE, THE PUBLIC SECTOR OR EDUCATION.
601002 - SCOPE OF PRACTICE OF ACCOUNTANCY IN THE 1. PRACTICE OF PUBLIC ACCOUNTANCY
PHILIPPINES (4 ITEMS) 2. PRACTICE IN COMMERCE & INDUSTRY (COMMERCE -
DISTRIBUTION OF GOODS AND SERVICES; INDUSTRY -
CONVERSION OF RAW MATERIALS TO FINISHED GOODS)
3. PRACTICE IN EDUCATION/ACADEME
4. PRACTICE IN THE GOVERNMENT
601003 - ACCOUNTANTS IN __________ ARE WORKING PUBLIC PRACTICE
IN ACCOUNTING FIRMS OR INDIVIDUALLY TO PROVIDE
AUDIT AND ATTESTATION, TAX PLANNING AND
PREPARATION, AND ADVISORY SERVICES TO THEIR
CLIENTS.
601004 - AN ACCOUNTANT PRACTICING IN __________ INDUSTRY & COMMERCE (ALSO PRIVATE ACCOUNTING)
SERVES ONLY ONE COMPANY. HE PROVIDES A STAFF
FUNCTION WHICH SUPPORTS THE COMPANY BY
PERFORMING ACCOUNTING-RELATED TASKS.
601005 - AN ACCOUNTANT PRACTICING IN ___________ (ACCOUNTING) EDUCATION/ACADEME
CAN PURSUE A CAREER AS A FACULTY MEMBER IN A
SCHOOL, AN AUTHOR OF AN ACCOUNTING BOOK, A
RESEARCHER, A TRAINER OR A REVIEWER.
601006 - AN ACCOUNTANT PRACTICING IN __________ GOVERNMENT
PROVIDE ACCOUNTING INFORMATION THAT HELP
GOVERNMENT AGENCIES PLAN, BUDGET, FORECAST AND
ALLOCATE GOVERNMENT FUNDS.
601007 - IS A SYSTEMATIC PROCESS BY WHICH A AUDITING
COMPETENT, INDEPENDENT PERSON OBJECTIVELY
OBTAINS AND EVALUATES 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,
601008 - IS A KEY PHRASE IN THE DEFINITION OF SYSTEMATIC PROCESS
AUDITING WHICH IMPLIES A STRUCTURED, LOGICAL AND
ORGANIZED SERIES OF STEPS AND PROCEDURES.
601009 - INCLUDE INFORMATION CONTAINED IN ASSERTIONS
FINANCIAL STATEMENTS, INTERNAL OPERATING
REPORTS AND TAX RETURNS.
601010 - REFERS TO THE CLOSENESS WITH WHICH THE DEGREE OF CORRESPONDENCE
ASSERTIONS CAN BE IDENTIFIED WITH ESTABLISHED
CRITERIA.

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601011 - ARE THE STANDARDS AGAINST WHICH THE ESTABLISHED CRITERIA

ASSERTIONS OR REPRESENTATIONS ARE JUDGED.
601012 - IS THE REPORTING OF THE RESULTS ANALYZED ATTESTATION
AND CONFIRMED IN THE AUDITING PROCESS.
601013 - ARE THE INDIVIDUALS WHO USE (RELY ON) THE INTERESTED USERS
AUDITOR’S FINDINGS.
601014 - EXAMPLES OF INTERESTED USERS (5 ITEMS) 1. STOCKHOLDERS
2. MANAGEMENT
3. CREDITORS
4. GOVERNMENTAL AGENCIES
5. PUBLIC
601015 - REASONS WHY IT IS RARE THAT OWNERS 1. SHAREHOLDERS ARE NUMEROUS.
(SHAREHOLDERS) OF THE BUSINESS ALSO RUN 2. THEY OFTEN LACK SPECIFIC MANAGEMENT SKILLS
(CONTROL) THE BUSINESS (2 ITEMS) REQUIRED TO SUCCESSFULLY MANAGE LARGE
ENTERPRISES.
601016 - THE SHAREHOLDERS VEST CONTROL OF THE BOARD OF DIRECTORS; MANAGEMENT
BUSINESS IN __________ WHO EMPLOY SPECIALIST
_________ TO RUN THE BUSINESS AND RETURN THE
PROFITS OF THE BUSINESS BACK TO SHAREHOLDERS.
601017 - IS THE RISK THAT UNRELIABLE INFORMATION INFORMATION RISK
WILL BE PROVIDED TO DECISION MAKERS.
601018 - FACTORS THAT CONTRIBUTE TO INFORMATION 1. REMOTENESS OF INFORMATION USERS FROM
RISK (4 ITEMS) INFORMATION PROVIDERS
2. POTENTIAL BIAS AND MOTIVES OF INFORMATION
PROVIDER
3. VOLUMINOUS DATA
4. COMPLEX BUSINESS TRANSACTIONS
601019 - WAYS ON HOW INFORMATION RISK MAY BE 1. ALLOW USERS TO VERIFY INFORMATION (GENERALLY
REDUCED (3 ITEMS) IMPRACTICABLE)
2. USER SHARES INFORMATION RISK WITH
MANAGEMENT (I.E., HAVING A WAY FOR OWNERS TO
RECOVER PART OF OPERATING LOSSES FROM THE
MANAGEMENT)
3. HAVE THE FINANCIAL STATEMENTS AUDITED
601020 - GENERAL TYPES OF AUDIT (3 ITEMS) 1. INDEPENDENT FINANCIAL STATEMENTS AUDIT
2. INTERNAL AUDIT
3. GOVERNMENT AUDIT
601021 - IS A TYPE OF AUDIT THAT CONSISTS OF INDEPENDENT FINANCIAL STATEMENTS AUDIT
METHODOLOGICAL REVIEW AND OBJECTIVE
EXAMINATION OF FINANCIAL STATEMENTS PREPARED BY
AN ENTERPRISE (AUDITEE) TO DETERMINE IF SUCH
STATEMENTS HAVE BEEN PREPARED IN CONFORMITY
WITH FINANCIAL REPORTING PRACTICES THAT ARE
APPROPRIATE FOR THE AUDITEE.
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601022 - IS A TYPE OF AUDIT DESCRIBED AS AN INTERNAL AUDIT

INDEPENDENT, OBJECTIVE ASSURANCE AND
CONSULTING ACTIVITY DESIGNED TO ADD VALUE AND
IMPROVE AN ORGANIZATION’S OPERATIONS.
601023 - IS A TYPE OF AUDIT WHICH INVOLVES THE GOVERNMENT AUDIT
DETERMINATION OF WHETHER GOVERNMENT FUNDS
ARE BEING HANDLED PROPERLY AND IN COMPLIANCE
WITH EXISTING LAWS AND WETHER THE PROGRAMS ARE
BEING CONDUCTED EFFICIENTLY AND ECONOMICALLY.
601024 - IS THE LEVEL OF ASSURANCE THAT THE REASONABLE (OR HIGH) ASSURANCE
FINANCIAL STATEMENTS ARE NOT MATERIALLY
MISSTATED THAT AN AUDITOR, EXERCISING
PROFESSIONAL SKILL AND CARE, IS EXPECTED TO ATTAIN
FROM AN AUDIT.
601025 - IS THE HIGHEST LEVEL OF ASSURANCE AN ABSOLUTE ASSURANCE
AUDITOR CAN GIVE, IF HE CHECKS EACH AND EVERY
TRANSACTION.
601026 - FACTORS THAT LIMIT THE AUDITOR FROM 1. USE OF SAMPLING (SAMPLING RISK)
GIVING ABSOLUTE ASSURANCE (3 ITEMS) 2. INHERENT LIMITATIONS OF ANY ACCOUNTING AND
INTERNAL CONTROL SYSTEM (E.G., POSSIBILITY OF
COLLUSION)
3. MOST AUDIT EVIDENCE IS PERSUASIVE RATHER THAN
CONCLUSIVE
4. HUMAN WEAKNESSES SUCH AS FATIGUE,
MISINTERPRETATION OF EVIDENCE, MISAPPLICATION OF
PROCEDURE (NON-SAMPLING RISKS)
601027 - IS EVIDENCE THAT HAS THE POWER TO PERSUASIVE EVIDENCE
INFLUENCE OR PERSUADE SOMEONE TO BELIEVE IN ITS
TRUTH (E.G., CONFIRMATION OF ACCOUNT RECEIVABLE
FROM 75% OF CLIENTS).
601028 - IS A SOLID EVIDENCE AFTER WHICH NO CONCLUSIVE EVIDENCE
FURTHER PROOF OR INQUIRY IS REQUIRED & EVIDENCE
IN ITSELF IS COMPLETE (E.G., SENDING OF
CONFIRMATION LETTER TO ALL CUSTOMERS AND
PURSUING ALL OF THEM UNTIL THEY RESPOND).

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