CPA REVIEW SCHOOL OF THE PHILIPPINES AT-9114

Manila
AUDITING THEORY CPA Review

PHILIPPINE ACCOUNTANCY ACT OF 2004/IMPLEMENTING

RULES & REGULATIONS (IRR)

1. Republic Act 9298 is known as the

A. Revised Accountancy Law.
B. Code of Ethics for Professional Accountants.
C. Philippine Accountancy Act of 2004.
D. Philippine Accountancy Law of 2004.

2. Which of the following is not an objective of the Philippine Accountancy Act of 2004?
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. The development and improvement of accounting standards that will be generally
accepted in the Philippines.

3. The practice of Accountancy includes

I. Practice of Public Accountancy
II. Practice in Commerce and Industry
III. Practice in Education/Academe
IV. Practice in the Government
A. I, II, and IV only C. I, II, and III only
B. II, III, and IV only D. I, II, III, and IV

4. A CPA is in public accounting practice when he/she

A. Represents his/her employer before government agencies on tax and other matters
related to accounting.
B. Represents his/her clients before government agencies on tax and other matters related
to accounting.
C. Teaches accounting, auditing, management advisory services, accounting aspect of
finance, business law, taxation, and other technically related subjects.
D. Holds, or is appointed to a position, 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 accounting.

5. Section 4 of the Rules and Regulations Implementing RA 9298 (IRR) provides that 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 should be
occupied by a duly registered CPA. It provides further that
A. The business or company where such position exists has a paid-up capital of at least
P5,000,000 and/or annual revenue of at least P10,000,000.
B. The business or company where such position exists has a paid-up capital of at least
P10,000,000 and/or annual revenue of at least P5,000,000.
C. The section applies to all incumbents to the position.
D. The section applies only to persons to be employed after the effectivity of the Code of
Ethics for Professional Accountants in the Philippines.

6. Section 5 of the Accountancy Act of 2004 states that the Board of Accountancy shall be
composed of a Chairman and
A. 2 members C. 7 members
B. 6 members D. 8 members

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7. The members of the Professional Regulatory Board of Accountancy shall be appointed by the
A. Philippine Institute of CPAs (PICPA).
B. Professional Regulation Commission (PRC).
C. President of the Philippines.
D. Association of CPAs in Public Practice (ACPAPP).

8. Who has the power to suspend or remove any member of the Board of Accountancy?
A. The Chairman of the FRSC C. The Chairman of the AASC
B. The Chairman of the PRC D. The President of the Philippines

9. The following statements relate to the submission of nominations to the Board of

Accountancy. Which is correct?
A. The Accredited National Professional Organization of CPAs (APO) shall submit its
nominations to the president of the Philippines not later than sixty (60) days prior to the
expiry of the term of an incumbent chairman or member.
B. The APO shall submit its nominations to the PRC not later than thirty (30) days prior to
the expiry of the term of an incumbent chairman or member.
C. If the APO fails to submit its own nominee(s) to the PRC within the required period, the
PRC in consultation with the Board of Accountancy shall submit to the president of the
Philippines a list of five (5) nominees for each position.
D. There should be adequate documentation to show the qualifications and primary field of
professional activity of each nominee.

10. The following statements relate to the qualifications of a member of the Board of Accountancy.
Which is incorrect?
A. He/she must be of good moral character and must not have been convicted of crimes
involving moral turpitude.
B. He/she must be a duly registered CPA with at least ten (10) years of work experience in
the practice of public accounting.
C. He/she must be a natural-born citizen and a resident of the Philippines.
D. He/she must not be a director or officer of the APO at the time of his/her appointment.

11. The following statements relate to the term of office of the chairman and members of the
Board of Accountancy (BOA). Which is false?
A. The Chairman and members of the BOA shall hold office for a term of three (3) years.
B. Any vacancy occurring within the term of a member shall be filled up for the unexpired
portion of the term only.
C. No person who has served two successive complete terms as Chairman or member shall
be eligible for reappointment until the lapse of two (2) years.
D. Appointment to fill up an unexpired term is not to be considered as a complete term.

12. The Board of Accountancy has the power to conduct an oversight into the quality of audits of
financial statements through a review of the quality control measures instituted by auditors
in order to ensure compliance with the accounting and auditing standards and practices. This
power of the BOA is called
A. Quality assurance review C. Appraisal
B. Peer review D. Quality control

13. The following ratings were obtained by an examinee during the October 2019 examination:
Financial Accounting and Reporting 96
Advanced Financial Accounting and Reporting 94
Management Advisory Services 94
Auditing 92
Taxation 64
RFBT 74

Based on the above information, the examinee is considered

A. Passed C. Conditional
B. Topnotcher D. Failed

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14. The Board of Accountancy shall submit to the PRC the ratings obtained by each candidate
within _____ days after the examination, unless extended for just cause.
A. 10 C. 3
B. 5 D. 2

15. Any candidate who fails in ________ complete CPA Board Examinations shall be disqualified
from taking another set of examinations unless he/she submits evidence to the satisfaction
of the BOA that he/she enrolled in and completed at least________ of subjects given in the
licensure examination.
A. 3, 15 units per year for a total of 60 units C. 2, 24 units
B. 2, 15 units/year, total of 30 units D. 3, 24 units

16. Which of the following shall be issued to examinees who pass the CPA licensure examination?
A. Certificate of registration only.
B. Professional identification card only.
C. Certificate of registration and professional identification card.
D. Certificate of participation and professional identification card.

17. Which of the following statements concerning the issuance of Certificates of Registration and
Professional Identification Cards to successful examinees is correct?
A. The Certificate of Registration issued to successful examinees is renewable every three
(3) years.
B. The Professional Identification Card issued to successful examinees shall remain in full
force and effect until withdrawn, suspended or revoked in accordance with RA 9298.
C. The BOA shall not register and issue a Certificate of Registration and Professional
Identification Card to any successful examinee of unsound mind.
D. The BOA may, after the expiration of three (3) years from the date of revocation of a
Certificate of Registration, reinstate the validity of a revoked Certificate of Registration.

18. Meaningful experience shall be considered as satisfactory compliance with the requirements
of Section 28 of RA No. 9298 if it is earned in
A. Commerce and industry and shall include significant involvement in general
accounting, budgeting, tax administration, internal auditing, liaison with the
Commission on Audit, representing his/her employer before government agencies on
tax and matters related to accounting or any other related functions.
B. Academe/education and shall include teaching for at least three (3) trimesters or two
(2) semesters subjects in either financial accounting, business law and tax, auditing
problems, auditing theory, financial management and management services and the
accumulated teaching experience on these subjects shall not be less than three (3)
school years.
C. Government and shall include significant involvement in general accounting,
budgeting, tax administration, internal auditing, liaison with external auditors or any
other related functions
D. Public practice and shall include at least one year as auditor in charge and at least
two years as audit assistant of audit engagement covering full audit functions of
significant clients.

19. If the application for registration to practice public accountancy of Ramon Francisco, CPA was
approved on July 31, 2018, the registration shall expire on
A. September 30, 2021
B. December 31,2020
C. December 31, 2021
D. The date of birth of the individual in year 2021

20. Unless otherwise exempted, registered CPAs in the practice of accountancy who have not
completed the CPE requirements shall
A. Be dropped from the roster of CPAs.
B. Not be allowed to renew their professional licenses.
C. Present evidence to the satisfaction of the Board that they have the necessary knowledge,
skills and experience to discharge their professional responsibility.

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D. Submit a letter addressed to the Board indicating the reasons for not complying with the
CPE requirements.

21. Which of the following statements concerning ownership of working papers is incorrect?
A. All working papers made by a CPA and his/her staff in the course of an examination remain
the property of such CPA in the absence of a written agreement between the CPA and the
client to the contrary.
B. Working papers include schedules and memoranda prepared and submitted by the client
of the CPA.
C. Working papers include reports submitted by a CPA to his/her client.
D. Working papers shall be treated confidential and privileged unless such documents are
required to be produced through subpoena issued by any court, tribunal, or government
regulatory or administrative body.

22. Any person who shall violate any of the provisions of the Accountancy Act or any of its
implementing rules and regulations promulgated by the Board of Accountancy subject to the
approval of the PRC, shall, upon conviction, be punished by
A. A fine of not more than P50,000.
B. Imprisonment for a period not exceeding two years.
C. A fine of not less than P50,000 or by imprisonment for a period not exceeding two years
or both.
D. Lethal injection.

23. The Board of Accountancy may reinstate the validity of a revoked Certificate of Registration
after the expiration of how many years from the date of revocation?
A. 5 C. 2
B. 3 D. 1

24. All registered CPAs shall obtain and use a seal which shall be circular in form with a smaller
circle within bearing the registrant’s name, registration number and title. Which of the
following is correct?
A. Engraved in the lower portion of the space between the circles is the CPA’s name.
B. Engraved in the middle of the smaller circle are the letters “CPA”.
C. Engraved in the middle of the smaller circle are the CPA’s name and registration number.
D. Engraved in the middle of the smaller circle is the CPA’s name.

25. Which of the following statements concerning the use of firm or partnership name is incorrect?
A. In the case of an individual CPA, he/she shall do business under his/her registered name
with the BOA and the PRC and as printed in his/her CPA certificate (for example, Juan
Puruntong, CPA).
B. In the case of a firm, it shall do business under its duly registered and authorized firm
name appearing in the registration documents issued by the Department of Trade and
Industry (DTI) and other government offices and such firm name shall include the real
name of the sole proprietor as printed in his/her CPA certificate (for example, Arnulfo
Gumamela and Associates).
C. In the case of a registered partnership, it shall do business under its name as indicated in
its current Articles of Partnership and Certificate of Registration issued by the Securities
and Exchange Commission (SEC) (for example, Tanya, Sam, and Jervi, CPAs).
D. A CPA shall practice only under an individual, firm, or partnership name in accordance
with Philippine laws and shall not include any fictitious name but may indicate
specialization.

26. A partner surviving the death or withdrawal of all the other partners in a partnership may
continue to practice under the partnership name for a period of not more than _____ years
after becoming a sole proprietor.
A. 4 C. 2
B. 3 D. 1

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27. The death or disability of an individual CPA and/or the dissolution and liquidation of a firm or
partnership of CPAs shall be reported to the BOA not later than _____ days from the date of
such death, dissolution or liquidation.
A. 90 C. 30
B. 60 D. 15

28. Which of the following statements concerning a CPA’s disclosure of confidential client
information is ordinarily correct?
A. Disclosure may be made to any party on consent of the client.
B. Disclosure should not be made even if such disclosure will protect the CPA’s professional
interests in legal proceedings.
C. Disclosure should be made only if there is a legal or professional duty to make the
disclosure.
D. Disclosure may be made to any government agency without subpoena.

29. Listed below are names of four CPA firms and pertinent facts relative to each firm. Unless
otherwise indicated, the individuals named are CPAs and partners, and there are no other
partners. Which is a violation of the Implementing Rules and Regulations of RA 9298?
A. Tin, Ton and Tan, CPAs (Tin died about five years ago; Ton and Tan are continuing the
firm.)
B. Pol and Bon, CPAs (The name of Cua, a third partner, is omitted from the partnership
name.)
C. Joni and Jona, CPAs (Joni died about three years ago; Jona is continuing the firm as a
sole proprietor.)
D. Elias and Co., CPAs (The firm has ten other partners who are all CPAs).

30. 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.

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