1.

Compared to the auditor of the past

Determination of fair
2. To distinguish it from reports that might
Title
3. Juan has been retained as auditor
Lend credibility
4. The process of examining underlying documentary
Auditing
5. The existence of audit risk is recognized by the statement
Obtain reasonable assurance about whether
6. When would the auditor refer to the work of an appraiser
An advance opinion is expressed based on
7. A system of internal control should be designed with these objectives except
Compliance with govt
8. Which of the following is an accepted audit procedure that involves the analysis of the two
Reconciliation
9. Which of the following is an effective audit planning and control procedure that helps prevent
Arrange a preliminary conference with the client to discuss
10. Which of the following is an administrative control
Accountability over source data
11. The primary source of information to be reported about litigation
Client’s management
12. Per BIR ruling, working papers should be retained by the auditor for a period of
10 years
13. The primary objective of procedures performed to obtain an understanding of internal control is
to provide an auditor with
Knowledge necessary to plan the audit
14. An auditor who uses the work of an expert may refer to and identify the expert
Auditor expresses a qualified opinion related to the work of the expert
15. The refusal of a client’s lawyer to provide a representation on the legality of a particular act
committed by the client
Considered to be a scope limitation
16. Fox, CPA, is succeeding Tyronne, Fox may do so if
Tyronne and Genesis consent
17. The two phases of the auditor’s involvement with internal control are sometimes referred to as
“understanding and assessment”
Obtain a reasonable degree of assurance that the client’s internal controls are in use and are
operating as planned.
18. Which of the following statement is true?
The control environment is the foundation for effective internal control providing discipline and
structure
19. Which paragraphs of an auditor’s report on financial statements should refer to Philippine
Financial Reporting Standars?
Management’s Responsibility and opinion
20. An auditor decides to express a qualified opinion on an entity’s financial statements because a
major inadequacy in its computerized accounting records prevents the auditor
The possible effects on the financial statements
21. .
22. Which of the following audit procedures is not usually applied in test of control procedures?
Analytical Procedures
23. In which of the following situations would an auditor ordinarily choose between expressing a
qualified opinion or an adverse
The financial statements fail to disclose information that is required by the pfrs
24. To avoid potential errors and irregularities a well-designed system of internal accounting control
in the accounts payable area should include separation
Cash disbursements and invoice verification
25. In an audit situation, communicating between successor and predecessor auditors should be
Either written or oral

1. .
2. The process of examining underlying
Auditing
3. .
4. A CPA’s opinion on financial statements is of little value to those who relied
Maintain his independence
5. Which of the following audit procedures is not usually applied in test of control procedure
Reperformance
6. These are applied specifically for the purpose of testing the reasonableness of account balances
Substantive analytical procedures
7. .\
8. An auditor may not express a qualified opinion when
The auditor lacks independence with respect to the audited entity
9. In making arrangements for an audit, there should be a clear understanding between the
auditor and the client as to the following except
Assurance of auditor’s management
10. Per PSQC 1 statements, working papers should be retained by the auditor
No shorter than 5 years
11. Fox
12. Preliminary arrangements for an audit agreed to by the client and the auditor are best set forth
in

Permanent file or management report/ engagement letter

13. An auditor decides to express

14. Letter of audit inquiry should be
Prepared and sent by the auditor
15. Which of the following best describes the reason why an independent auditor reports on
financial statements
 Different interests may exist between the company
16. An auditor who uses the work of an expert may refer to and identify the expert
Auditor expresses a qualified opinion related to the work
17. Which of the following statements is not correct about auditor’s working papers?
Audit working papers are the property of the auditor and the client
18. When two or more auditing firms participate in an audit, one firm should be the principal
auditor.
Disclaimer of opinion
19.