CORPUZ, ROBY GERARD M

3- AAC
REVIEW QUESTIONS

CHAPTER 1
1. The objective of financial statement audit is to provide an independent evaluation

and express unbiased opinion by the CPAs as required by the Regulatory

framework in order to enhance the credibility and reduce risks in financial

information.

2. The special function of auditors perform is that they provide an assurance

enhancement services to improve the degree of confidence in financial reporting.

3. The factors are when the business particularly the large entities raise a huge

amount of capital borrowings from investors thus, it will increase the resources of

a company and risk also due to misstatement of information.

4. The audit will probably produce a fair representation if an auditor complies

effectively the CoE by the IFAC which are the fundamentals and essentials of

principles, specifically the independent opinion that performed by an auditor.

5. The importance of an audit report is it increase the reliability of a financial

information that facilitates decision making by the intended users.

6. Usually there are instances that the company requires to produce an audit report

such as when some financial information has a significant difference that results

misstatement and there’s fraudulent act possibly occurred.

7. The assurance / audit services that performed by an accountant will definitely

provide a reliable information if he is independent in FACT & MIND.

8. a. The auditor should provide a faithful representation of FS as he honestly and

independently communicates his opinion to the management so that there will be

no any independence threat between the responsible parties.

b. The financial statements will totally lack of credibility and the corporation can

be sued as they’re not complying rules of legal framework.

9. Nowadays since the existence of pandemic, the professional/officials must have

produced an independent audit because it seems in our situations that there are

a lot of fraudulent acts that are executing by the government and therefore many

citizens especially the front liners have no compensation on their sacrifices.

10. I don’t agree. If the auditor does that, perhaps there will be a conflict of interest

among his/her clients. The auditor will no longer independent hence there will be

no credibility.

11. If we talk about the ideal requirement for the company, this statement is definitely

true. However, practically the small business does not need an annual audit as

the owner of micro entity can easily managed that he has a lower accountability

and cost of borrowing.

12. I definitely agree on this statement as required by the applicable framework that

the practitioners should express objective opinion, otherwise there will be a self-

interest that threatens the independence of provider of information.