Professional Documents
Culture Documents
1. A CPA firm’s personnel partner periodically studies the CPA firm’s personnel
advancement experience to ascertain whether individuals meeting stated criteria are
assigned increased degrees of responsibility. This is evidence of the CPA firm’s
adherence to prescribed standards of
2. A basic objective of a CPA firm is to provide professional services that conform with
professional standards. Reasonable assurance of achieving this basic objective is
provided through
a. A system of peer review.
b. Continuing professional education.
c. A system of quality controls.
d. Compliance with generally accepted reporting standards.
3. The following factors affect the nature, timing and extent of an audit firm’s quality
control policies and procedures, except
A B C D
YE YES NO NO
S
YE YES YE NO
S S
YE NO YE NO
S S
YE YES NO NO
S
4. The fourth standard of reporting requires the auditor’s report to contain either an
expression of opinion regarding the financial statements taken as a whole or an
assertion to the effect that an opinion cannot be expressed. The objective of the
fourth standard is to prevent
ALDERSGATE COLLEGE Espinoza, Daenielle Audrey M.
Solano, Nueva Vizcaya, Philippines, 3709 Bachelor of Science in Accountancy - 3
School of Business, Management and T74/PRE1/AUDITING ASSURANCE AND
Accountancy PRINCIPLES
8. The auditor communicates the results of his or her work through the medium of the
a. Engagement letter c. Management letter.
b. Audit report d. Financial statements
10. Material misstatements may emanate from all of the following except
a. fraud
b. error
ALDERSGATE COLLEGE Espinoza, Daenielle Audrey M.
Solano, Nueva Vizcaya, Philippines, 3709 Bachelor of Science in Accountancy - 3
School of Business, Management and T74/PRE1/AUDITING ASSURANCE AND
Accountancy PRINCIPLES
11. An intentional act by one or more individuals among management, employees, or third
parties which results in misrepresentation of financial statements refers to
a. Error b. Noncompliance c. Fraud d. Illegal acts
12. Certain fundamental beliefs called "postulates" underlie auditing theory. Which of
the following is not a postulate of auditing?
a. No long-term conflict exists between the auditor and the management of the
enterprise under audit.
b. Economic assertions can be verified.
c. The auditor acts exclusively as an auditor.
d. An audit has a benefit only to the owners.
14. The responsibility for the detection and prevention of errors, fraud, and
noncompliance with laws and regulations rests with
a. auditor b. client’s legal counsel c. client management d. internal
auditor
15. Which of the following is a correct statement relating to the theoretical framework
of auditing?
a. The financial data to be audited can be verified.
b. Short-term conflicts do not exist between managers who prepare data and auditors
who examine data.
c. Auditors do not necessarily need independence.
d. An audit has a benefit only to the owners.
20. Which of the following types of audit uses as its criteria laws and regulations?
a. Operational audit c. Financial statement audit
b. Compliance audit d. Financial audit
21. Which of the following best describes what is meant by Generally Accepted
Auditing Standards?
a. Pronouncements issued by the Auditing Standards and Practices Council.
b. Procedure to be used to gather evidence to support financial statements.
c. Rules acknowledged by the accounting profession because of their universal
compliance.
Answer: GAAS represent measures of the quality of the auditor’s performance.
1. Firm should establish policies and procedures design designed to provide it with
reasonable assurance that the firm and its personnel comply with ethical
requirements, what are these? (5 points)