AUDITING THEORY
RA 9298 – PHILIPPINE ACCOUNTANCY ACT OF 2004
(Multiple Choice Questions)
1. The objective of the Philippine Accountancy
Act of 2004 includes:
a. The standardization and regulation of
accounting education.
b. The examination for registration of
certified public accountants.
c. The supervision, control, and regulation
of the practice of accountancy in the
Philippines.
d. All of the above
2. The Philippine Accountancy Act of 2004 shall
provide for and govern:
a. The supervision, control, and regulation
of the practice of accountancy in the
Philippines.
b. The standardization and regulation of
accounting education.
c. The examination for registration of
certified public accountants.
d. All of the above
3. The document that contains the norm and
principles governing the practice of the
accountancy profession in the highest
standards of ethical conduct
a. RA 9298
b. Code of Ethics for CPAs in the
Philippines
c. IRR to RA 9298
d. PSA 220 on Quality Control
4. The following statements relate to some of
the provisions of RA 9298. Which is correct?
a. Audit working papers are generally the
property of the company whose financial
statements were audited.
b. After three (3) years, subject to certain
conditions, the Board of Accountancy may
order the reinstatement of
a CPA whose certificate of registration has
been revoked.
c. The penal provision (Sec. 36) of RA 9298
applies only to the violation of any of the
provisions of RA 9298 because its
Implementing Rules and
Regulations are unenforceable.
d. It shall be the primary duty of the
PRC and the BOA to effectively
enforce the provisions of RA 9298.
5. Which of the following organization has been
recognized by the Commission on October 2,
1975 per Accreditation No. 15, As Accredited
Professional Organization?
a. Board of Accountancy (BOA)
b. Association of CPA's in Public Practice
(ACPAPP)
c. Association of CPAs in Education (ACPAE)
d. Philippine Institute of CPAs (PICPA)
6. The area of practice of accountancy namely
public accountancy, commerce and industry,
academe / education and government are
called:
a. Sectors
b. Scope of practice of accountancy
c. Section
d. Segment
Red Sirug
7. As used in RA 9298, this term refers to the
area of practice of accountancy:
a. Segment
b. Line
c. Sector
d. Section
8. A Certified Public Accountant or CPA is:
a. A person who holds a valid
Certificate of Registration issued by the
PRC
b. A person who holds a valid
professional Identification Card issued by
the PRC
c. A person who holds a valid
Certificate of Registration and a
valid Professional
Identification Card issued by the
PRC
d. A person who is engaged in the
practice of public accountancy
9. A CPA is in public accounting practice when
he/she:
a. Holds, or is appointed to, in an
accounting professional group in
government or in a government-owned
and/or controlled corporation where
decision making requires
professional knowledge in the
science of
accountin
g.
b. Represents his/her clients before
government agencies on tax and
other matters related to accounting.
c. Represents his/her employer before
government agencies on tax and other
matters related to accounting.
d. Teaches accounting, auditing,
management advisory services,
accounting aspect of finance,
business law, taxation, and other
technically related subjects.
10. Which of the following statements concerning
the practice of accountancy in commerce and
industry is incorrect?
a. A CPA is in the practice of accountancy in
commerce and industry when he/she is
involved in decision making requiring
professional knowledge in the science of
accounting, as well as the accounting
aspects of finance and taxation.
b. A CPA is in the practice of
accountancy in commerce and
industry when he/she renders
professional services as a Certified
Public Accountant to more than one
client on a fee basis.
c. A CPA is in the practice of
accountancy in commerce
and industry when he/she represents
his/her employer before government
agencies on tax and other matters
related to accounting.
d. A CPA is in the practice of accountancy in
commerce and industry when such
employment or position requires that the
 holder thereof must be a Certified Public 11. Which of the following does not constitute a
Accountant. practice of accountancy?
a. A person holding out himself as one skilled
in the

AT – RA 9298 Red Sirug Page 1

knowledge, science and practice of a. A corporation whose stockholders are all
accounting and as a qualified person to CPAs
render professional services as a CPA to b. A corporation whose some of
more than one client. stockholders are CPAs
b. A person is appointed as a c. Limited liability partnership
marketing director of a d. A non-stock corporation whose members
government owned and are all CPAs
controlled corporation.
c. A person in educational institution
teaching accounting, auditing, business
law, taxation or
other technically related subjects.
d. A person representing his/her employer
before government agencies on tax and
other accounting related matters.

12. Which of the following statements concerning

the practice of accountancy in the
academe/education is incorrect?
a. Members of the Integrated Bar
of the Philippines are not
allowed to teach business law
and taxation subjects.
b. The position of either the Dean or the
Department Chairman or its equivalent
that supervises the Bachelor of Science in
Accountancy program of an educational
institution is deemed to be in practice of
accoun- tancy in the academe/education.
c. CPAs are allowed to teach business law
subjects.
d. The position of either the Dean or the
Department Chairman or its equivalent
that supervises the Bachelor of Science
in Accountancy program of an
educational institution must be occupied
only by a duly reg- istered CPA.

13. Which of the following statements concerning

the practice of accountancy is correct?
a. A CPA is in the practice of accountancy in
the government when he/she is involved
in the audit or verification of financial
transactions and accounting records of
his/her clients.
b. A CPA is in public accountancy when
he/she renders his/her professional
services as a CPA to more than one
client on a fee basis in the design,
installation, review, and revision of
accounting systems and controls.
c. A CPA is in the practice of accountancy
in the academe/education when he/she
is in an educational institution teaching
any of the subjects included in the BSA
curriculum.
d. A CPA is in the practice of accountancy
in commerce and industry when his/her
position requires civil service eligibility
as a Certified Public Accountant.

14. Which is not permitted by RA 9298 to practice

public accountancy?
a. A CPA in individual capacity.
b. A sole proprietorship.
c. A general partnership.
d. A corporation, whose stockholders
are all CPAs.

15. Which is permitted by RA 9298 to practice

public accountancy?
16. The names under which a CPA practices
the profession must:
a. Indicate any specialization.
b. Contain more than three name.
c. Include one fictitious name.
d. Not misleading as to form of
organization.
17. A certificate of accreditation shall be issued
to CPA's in public practice only upon
showing, in accordance with rules and
regulations promulgated by the BOA and
approved by the PRC, that such registration
has acquired a:
a. Minimum of 3 years meaningful
experience in any of the areas of
practice of accountancy including
taxation.
b. Minimum of 3 years meaningful
experience in any of the areas of
practice of accountancy.
c. Minimum of 3 years meaningful
experience in any of the areas of
public practice including taxation.
d. Minimum of 3 years meaningful
experience in any of the areas of public
practice excluding taxation.
18. The minimum meaningful experience in
public accountancy as required by RA 9298
shall include:
a. At least one year as audit assistant and
at least one year as auditor in charge.
b. At least one year as audit assistant
and at least two years as auditor in
charge.
c. At least two years as audit assistant and
at least two years as auditor in charge.
d. At least two years as audit assistant and at
least
one year as auditor in charge.
AT – RA 9298 Red Sirug
19. Any position in any business or company in
the private sector which requires supervising
the recording of financial transactions,
preparation of financial statements,
coordinating with the external auditors for
the audit of such financial statements and
other related functions shall be occupied only
by a duly registered CPA if the business or
company where the above position exists has
a. An annual revenue of at least P5,000,000.00
b. A total asset of at least P10,000,000
c. A paid-up capital of at least P10,000,000.00
d. A paid-up capital of at least
P5,000,000.00
20. Individual CPAs, Firms or Partnerships of
CPAs, including partners and staf members
thereof shall register with the BOA and the
PRC. If the application for registration of AB
and Co., CPAs was approved on August 30,
2005, the registration will expire on
a. Sept. 30, 2007
b. Dec. 31, 2007
c. Dec. 31, 2008
d. Aug. 30, 2007
21. CPAs, firms and partnerships of CPAs engaged
in the practice of public accountancy including
partners and staf members thereof, shall
register with the PRC and the BOA, such
registration to be renewed every
a. Three years on or before December 31
b. Three years on or before September
30
c. Two years on or before December 31
d. Two years on or before September 30
22. Based on R.A. 9298, how many years can a
partner who survived the death or
withdrawal of other
Page 2