COMMISSION ON AUDIT (COA)

79. This Constitutional Commission has the power, authority,

and duty to examine, audit, and settle all accounts
pertaining
to the revenue and receipts of, and expenditures or uses of
funds and property, owned or held in trust by, or pertaining
to, the government, or any of its subdivisions, agencies, or
instrumentalities, including government-owned or controlled
corporations and recommend measures to improve the
efficiency and effectiveness of government operations.
A. Securities and Exchange Commission

B. Insurance Commission

C. Commission on Audit

D. Bureau of Internal Revenue

80. The COA is composed of

A. A chairman and two (2) commissioners.

B. A chairman and three (3) commissioners.

C. A chairman and four (4) commissioners.

D. A chairman and five (5) commissioners.

The COA is composed of a chairman and two (2)

commissioners.
Together they are called the “Commission Proper”

81. The COA Chairman and the two (2) commissioners shall be
appointed by the President of the Philippines with consent
of
 the Commission on Appointments for a term of
A. 5 years B. 6 years C. 7 years

D. 9 years

82. Which of the following is not one of the principal duties of

the COA?
A. Keep the general accounts of the government and preserve
the vouchers and supporting papers pertaining thereto.
B. Maintain price stability conducive to a balanced and
sustainable economic growth.
C. Promulgate accounting and auditing rules and regulations
including those for the prevention and disallowance of
irregular, unnecessary, excessive, extravagant or
unconscionable expenditures, or uses of government funds
and properties.
D. Submit to the President of the Philippines and Congress,
within the time fixed by law, an annual report covering the
financial condition and operation of the government.

To maintain price stability conducive to a balanced and

sustainable economic growth is the primary objective of the
Bangko Sentral ng Pilipinas.

83. The COA conducts a comprehensive audit that includes

A. Financial and compliance audits

B. Compliance and performance audits.

C. Financial and financial-related audits.

D. Financial, compliance, and performance audits.

 KEY ANSWERS

1. C 36. D 71. C

2. D 37. A 72. D

3. D 38. A 73. A

4. B 39. D 74. A

5. A 40. B 75. B

6. A 41. B 76. B

7. A 42. B 77. C

8. C 43. B 78. D

9. C 44. C 79. D

10. B 45. A 80. A

11. D 46. A 81. D

12. B 47. C 82. D

13. A 48. C 83. C

14. D 49. A 84. D

15. D 50. A 85. A

16. B 51. D 86. B

17. B 52. C 87. A

18. A 53. A 88. A

19. A 54. A 89. D

20. A 55. B 90. B

21. A 56. A 91. C

22. C 57. C 92. C

23. D 58. A 93. B

24. D 59. D 94. D

25. B 60. B 95. C

26. B 61. B 96. C

27. B 62. B 97. A

28. D 63. D 98. C

29. D 64. C 99. B

30. C 65. A 100. D

31. A 66. D

32. B 67. D

33. B 68. B

34. A 69. D

35. B 70. A
Chapter 3
The CPA’s Professional
Responsibilities

1. The Code of Ethics for Professional Accountants in the

Philippines consists of three parts. Part A

A. Applies to professional accountants in public practice.

B. Establishes the fundamental principles for professional

accountants.
C. Applies to professional accountants in business.

D. Provides a conceptual framework for the application of

fundamental principles and illustrates how the framework is to be
applied in specific situations.

The Code of Ethics for Professional Accountants in the

Philippines consists of three parts. Part A establishes the
fundamental principles for professional accountants and
provides a conceptual framework for their application.
Parts B and C illustrate how the conceptual framework is
to be applied in specific situations. Part B applies to
professional accountants in public practice. Part C applies
to professional accountants in business.

2. Which part of the Code of Ethics applies to professional accountants in

public practice?

A. Part A C
Part C .
 B. Part B D
Part D .

3. Which of the following fundamental ethical principles requires a

professional accountant to be straightforward and honest in all
professional and business relationships?

A. Objectivity

B. Professional behavior

C. Professional competence and due care

D. Integrity

Part A of the Code establishes the following fundamental ethical

principles:

Figure 11-2

Vibro Company sells a product used in many manufacturing

processes. The sales activity involves three activity areas:

Activity Area Cost Driver and Rate

Order taking $100 per purchase order
Sales visits $50 per visit
Delivery vehicles $1 per delivery mile
The following customer information is given:

AX BY DZ
Units sold 100,000 80,000 60,000
List price $50 $50 $50
Actual sales price $45 $48 $50
Number of purchase orders 30 20 10
Number of sales visits 6 5 3
Number of delivery miles 100 80 60

Refer to Figure 11-2. What is the profitability of customer

BY?
A. $4,000,000
B. $3,840,000
C. $3,837,670
D. $2,330,000

40. Figure 11-3

Vitella Company manufactures a product sold to retailers. It

is considering suppliers for its process. The supplier quality
involves four activity areas:

Activity Area Cost Driver and Rate

Order cost $125 per purchase order
Defective units $200 per unit internal failure costs
Delivery trips $5 per delivery mile
Carrying cost $1 per order
The following supplier information is given:

X3 Y2 Z1
Materials units needed 100,000 100,00 100,00
0 0
Actual purchase price $5 $4.99 $5.01
Number of purchase orders 20 30 18
Number of defects 6 12 0
Number of deliveries 20 30 18

Refer to Figure 11-3. Which supplier is least costly?

A. X3
B. Y2
C. Z1
D. They are equally costly.

41. Figure 11-3

Vitella Company manufactures a product sold to retailers. It

is considering suppliers for its process. The supplier quality
involves four activity areas:

Activity Area Cost Driver and Rate

Order cost $125 per purchase order
Defective units $200 per unit internal failure costs
Delivery trips $5 per delivery mile
Carrying cost $1 per order
The following supplier information is given:

X3 Y2 Z1
Materials units needed 100,000 100,00 100,00
0 0
Actual purchase price $5 $4.99 $5.01
Number of purchase orders 20 30 18
Number of defects 6 12 0
Number of deliveries 20 30 18

Refer to Figure 11-3. Which supplier has the most defective

units?
A. X3
B. Y2
C. Z1
D. They are equal.

1. Professional Behavior

- A professional accountant should comply with

relevant laws and regulations and should avoid any

action that discredits the profession.

2. Integrity

- A professional accountant should be

straightforward and honest in all professional and
business relationships.
 3. Confidentiality

- A professional accountant should respect the

confidentiality of information acquired as a result of

professional and business relationships. Such
information should not be disclosed to third parties
without proper and specific authority unless there is a
legal or professional right or duty to disclose. Also, it
should not be used for the personal advantage of the
professional accountant or third parties.

4. Objectivity

- A professional accountant should not allow bias,

conflict of interest or undue influence of others to
override professional or business judgments.