XOther Audit Services and CPA Profession PDF

AUDITING AND RELATED SERVICES
1. The Philippine Standards on Review Engagements (PSREs) are to be applied in

A. The audit of historical financial information.
B. Assurance engagements dealing with subject matters other than historical financial information.
C. The review of historical financial information.
D. The review of both historical and prospective financial information.
2. Which of the following standards are to be applied to compilation engagements, engagements to apply
agreed-upon procedures to information, and other related services engagements as specified by AASC
A. PSRSs
B. PSAEs
C. PSAs
D. PSREs
3. The Philippine Standards on Assurance Engagements (PSAEs) are to be applied in

A. Assurance engagements dealing with subject matters other than historical financial Information.
B. Compilation engagements and agreements to apply agreed-upon procedures to information.
C. The audit or review of historical financial information.
D. Assurance engagements dealing with historical financial information.
4. The Philippine Standards on Quality Control (PSQCs) are to be applied to

A. Assurance engagements only.
B. Review engagements only.
C. Compilation and review engagements only.
D. All services that fall under the AASC's engagement standards.
5. What level of assurance is provided by the auditor in an audit engagement?

A. Absolute
B. High, but not absolute
C. Moderate
D. No assurance
6. What level of assurance is provided by the practitioner in a review engagement?

A. No assurance
B. High, but not absolute
C. Reasonable
D. Moderate
7. Which of the following is not generally considered a procedure followed by a practitioner in obtaining
a reasonable basis for the expression of a review conclusion?
A. Obtain written representations from management.
B. Apply analytical procedures.
C. Make Inquiries of management.
D. Assess fraud risk.
8. Which of the following procedures should be applied by a practitioner when performing a review
engagement?
A. Obtaining a client representation letter from members of management.
B. Communicating significant deficiencies discovered during the assessment of control risk.
C. Sending bank confirmation requests to the entity's financial institutions.
This study source was downloaded by 100000857528025 from CourseHero.com on 11-19-2022 23:04:53 GMT -06:00
https://www.coursehero.com/file/113835183/xOther-Audit-Services-and-CPA-Professionpdf/
D. Searching for unrecorded liabilities by examining cash disbursements in the subsequent period.
9. For the purpose of expressing negative assurance in the review report, the practitioner should obtain
sufficient appropriate evidence primarily through
A. Inquiry and confirmation
B. Analytical procedures and substantive tests of details transactions and account balances
C. Confirmation and tests of controls
D. Inquiry and analytical procedures
10. In a review engagement, the practitioner performs which of the following?
Obtain an understanding Tests of Tests of

of internal control controls transactions
A. Yes Yes Yes
B. Yes Yes No
C. Yes No Yes
D. No Yes Yes
11. A compilation engagement

A. Requires the practitioner to verify the accuracy or completeness of the information provided by
management.
B. Requires the practitioner to gather evidence to express an opinion on the preparation of the financial
information.
C. Is not an assurance engagement.
D. Involves expression of a review conclusion on the preparation of the financial information.
12. PSRS 4410 (Revised), Compilation Engagements, applies to engagements where the practitioner
assists management in the preparation and presentation of
I. Historical or prospective financial information.

II. Non-financial information.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
13. In a compilation engagement, the practitioner applies accounting and financial reporting expertise to
assist management in the preparation and presentation of financial information of an entity in accordance
with an acceptable financial reporting framework. What type of assurance is provided by of the
practitioner when he/she performs this engagement?
A. Positive assurance
B. Negative assurance
C. No assurance
D. Limited assurance
14. What assurance is provided by the auditor in an agreed-upon procedures engagement?

A. Reasonable
B. Absolute
C. Moderate
D. No assurance
15. A report may be based upon applying agreed-upon procedures to specified elements, accounts, or
items of a financial statement. The users of the report should participate in establishing the procedures to
be performed. If the auditor cannot discuss the procedures with all the parties who will receive the report,
he/she may
I. Discuss the procedures to be applied with appropriate representatives of the parties involved.
II. Review relevant correspondence from the parties involved.
III. Distribute a draft of the type of report that will be issued to the parties involved.
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
16. Reports on agreed-upon procedures are intended to be distributed

A. To only the involved parties, who are aware of the reasons for the procedures.
B. Only to the stockholders of the entity.
C. To any party to whom the client wishes.
D. Only to the entity's management.
17. The report on an agreed-upon procedures engagement should contain

A. Identification of the purpose for which the agreed-upon procedures were performed.
B. An expression of positive assurance based on the specific procedures performed.
C. A statement that the auditor is independent of the entity.
D. A general description of the procedures performed.
18. Which of the following engagements does not require compliance with independence requirements?
A. Compilation of financial information.
B. Review of financial statements.
C. Examination of prospective financial information.
D. Audit of financial statements
19. Which of the following services, if any, may a practitioner who is not independent provide?
A. Compilations but not reviews.
B. Reviews but not compilations.
C. Reviews but not financial statement audits.
D. Agreed-upon procedures but not compilations.
20. A practitioner is associated with financial information when
I. The practitioner attaches a report to that financial information.

II. The practitioner consents to the use of his/her name in a professional connection.
A. I only
B. II only
C. Either I or II
D. Neither I nor II
Code of Ethics for Professional Accountants in the Philippines
21. BOA Resolution No. 263 Series of 2015 approves the adoption of ________________ (subject to
changes of certain provisions) as the Code of Ethics for Professional Account ants in the Philippines.
A. IFAC 2010 Code of Ethics for Professional Accountants

B. IFAC 2012 Code of Ethics for Professional Accountants
C. IFAC 2013 Code of Ethics for Professional Accountants
D. IFAC 2015 Code of Ethics for Professional Accountants
22. 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 illustrate how the
framework is to be applied in specific situations.
23. 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
24. The following statements relate to the fundamental principles of professional ethics:
A B C D
Integrity implies fair dealing and truthfulness. True True False False
The principle of objectivity imposes an
obligation on all professional accountants to
maintain professional knowledge and skill at the
level required. True False True False
The principle of professional behavior requires
all professional accountants to act diligently and
in accordance with applicable technical and
professional standards when rendering
professional services. False False True True
25. Which of the following fundamental ethical principles prohibits association of professional
accountants with reports, returns, communications or other information that is believed to contain a
materially false or misleading statement?
A. Integrity
B. Objectivity
C. Professional competence and due care
D. Confidentiality
26. The principle of professional competence and due care imposes which of the following obligations on
professional accountants?
A. To maintain professional knowledge and skill at the level required to ensure that clients or employers
receive competent professional service.
B. To refrain from disclosing confidential information obtained as a result of professional and business
relationships without proper and specific authority unless there is a legal or professional right or duty to
disclose.
C. To comply with relevant laws and regulations and avoid any situation that may bring discredit to the
profession.
D. Not to compromise professional or business judgment because of bias, conflict of interest or undue
influence of others.
27. The Code of Ethics provides a Conceptual Framework for applying the fundamental ethical principles.
This framework requires a professional accountant to
I. Identify threats to compliance with the fundamental principles.

II. Evaluate the significance of the identified threats.
III. Apply safeguards to eliminate the threats or reduce them to an acceptable level.
A. I and II only
B. I and III only
C. II and III only
D. I, II, and III
28. Which of the following threats to compliance with the fundamental principles may occur as a result of
the financial or other interests of a professional accountant or of an immediate or close family member?
A. Self-interest
B. Self-review
C. Advocacy
D. Familiarity
29. Which of the following may be considered by a professional accountant to eliminate or reduce
identified threats to an acceptable level?
I. Safeguards created by the profession, legislation or regulation.

II. Safeguards in the work environment.
III. Resign from the client or the employer.
IV. Decline or discontinue the professional engagement.
A. I and II only
B. III and IV only
C. I and IV only
D. II and III only
30. An example of a safeguard implemented by the client that might mitigate a threat to independence is
A. An effective corporate governance structure.
B. Management selection of the audit firm.
C. Required quality control review of an audit engagement.
D. Required continuing professional development for all assurance engagement team members.
31. Which of the following would create a "self-review" threat to independence?
A. An engagement team member has a spouse that serves as CEO of the attest client.
B. A second partner review (i.e., a quality control review) is required on all attest engagements.
C. A member of the audit team prepares invoices for the client.
D. A member of the audit team has a direct financial interest in the client.
32. Which of the following circumstances may create self-interest threat for a professional accountant in
public practice?
A. A member of the assurance team having a direct financial interest in the assurance client.
B. Performing a service for an assurance client that directly affects the subject matter information of the
assurance engagement.
C. Being threatened with litigation by the client.
D. Acting as an advocate on behalf of an audit client in litigation or disputes with third parties.
33. The following are examples of circumstances that may create familiarity threat, except
A. The firm promoting shares in an audit client.
B. Long association of senior personnel with the assurance client.
C. A member of the engagement team having a close or immediate family member who is a director or
officer of the client.
D. A director or officer of the client or an employee in a position to exert significant influence over the
subject matter of the engagement having recently served as the engagement partner.
34. Which of the following is an example of engagement-specific safeguards in the work environment?
A. Advising partners and professional staff of those assurance clients and related entities from which they
must be independent.
B. Disclosing to those charged with governance of the client the nature of services provided and extent of
fees charged.
C. A disciplinary mechanism to promote compliance with the firm's policies and procedures.
D. Published policies and procedures to encourage and empower staff to communicate to senior levels
within the firm any issue relating to compliance with the fundamental principles that concerns them.
35. BONUS
36. If the fee quoted for a professional service is so low, it may be difficult for the CPA to perform the
engagement in accordance with applicable technical and professional standards for that price. This
situation may create a self-interest threat to
A. Professional competence and due care
B. Objectivity
C. Integrity
D. Professional behavior
37. Which of the following is not a contingent fee?

A. A fee that is dependent upon the approval of the assurance client's loan application.
B. An audit fee that is based on 5% of the client's adjusted net income for the current year.
C. A fee that is fixed by a court or other public authority.
D. An arrangement whereby no fee will be charged unless a specified finding or result is attained.
38. The Code of Ethics requires that members of assurance teams, firms and, when applicable, network
firms be independent of assurance clients. Independence requires
A. Independence of mind only
B. Independence in appearance only
C. Both independence of mind and independence in appearance
D. Either independence of mind or independence in appearance
39. Which of the following most completely describes how independence has been defined by the
accountancy profession?
A. Possessing the ability to act with integrity, and exercise objectivity and professional skepticism.
B. Accepting responsibility to act professionally and in accordance with laws and regulations.
C. Avoiding the appearance of significant interests in the affairs of an assurance client.
D. Performing an assurance service from the viewpoint d the public.
40. The Code of Ethics provides that where the larger structure is aimed at cooperation and the entities
within the structure share a significant part of professional resources, it is considered to be a network.
Professional resources include the following, except
A. Audit methodology or audit manuals
B. Training courses and facilities
C. Brand name
D. Partners and staff
41. Which of the following threats to independence would most likely be created by a financial interest in
an assurance client?
A. Self-interest threat
B. Self-review threat
C. Familiarity threat
D. Intimidation threat
42. A self-interest threat may be created when a member of the assurance team knows that his close
family member has a direct financial interest or a material indirect financial interest in the assurance
client. Which of the following should be considered in evaluating the significance of the identified threat
to independence?
I. The nature of the relationship between the member of the assurance team and the close family member.
II. The materiality of the financial interest.
A. I only
B. II only
C. Neither I nor II
D. Both I and II
43. Which of the following threats to independence may be created by family and personal relationships
between a member of the assurance team and a director, an officer, or an employee of the assurance client
in a position to exert direct and significant influence over the subject matter information of the assurance
engagement?
A. Self-interest, familiarity or intimidation threats
B. Self-review, familiarity, or advocacy threats
C. Advocacy, familiarity or intimidation threats
D. Self-interest, advocacy or self-review threats
44. When an audit client becomes a Public Interest Entity (PIE), the length of time the individual has
served the audit client as a key audit partner before the client becomes a PIE shall be taken into account in
determining the timing of the rotation. If the individual has served the audit client as a key audit partner
for five (5) years or less when the client becomes a PIE, the number of years the individual may continue
to serve the client in that capacity before rotating off the engagement is
A. Seven (7) years
B. Seven (7) years less the number of years served
C. Maximum of two (2) additional years
D. Five (5) years
45. If the individual has served the audit client as a key audit partner for six (6) or more years when the
client becomes a PIE, the partner may continue to service in that capacity for _______________ before
rotating off the engagement.
A. Seven (7) years
B. Seven (7) years less the number of years served
C. Maximum of two (2) additional years
D. Five (5) years
46. What threat to independence may be created when the litigation support services provided to an audit
client include the estimation of the possible outcome and thereby affects the amounts or disclosure to be
reflected in the financial statement?
B. Advocacy threat
C. Intimidation threat
D. Familiarity threat
47. The recruitment of senior management for an audit client may create the following current or future
threats to independence, except
B. Familiarity threat
D. Self-review threat
48. What threat to independence may be created if fees due from an assurance client for professional
services remain unpaid for a long time, especially if a significant part is not paid before the issue of the
assurance report for the following year?
A. Advocacy threat
B. Self-interest threat
D. Self-review threat
49. Accepting gifts or hospitality (unless inconsequential or trivial) may create

A. Self-interest and familiarity threats
B. Advocacy and intimidation threats
C. Familiarity and self-review threats
D. Self-interest and self-review threats
50. Under the Code of Ethics,
A. An immediate family member of a professional accountant, whether or not in public practice, may not
accept a gift from a client.
B. A close relative of a professional accountant not in public practice may not accept a gift from a client.
C. A professional accountant in public practice may accept an inconsequential gift from a client.
D. A professional accountant, whether or not in public practice, may not accept a gift from a client.
Powered by TCPDF (www.tcpdf.org)

XOther Audit Services and CPA Profession PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

XOther Audit Services and CPA Profession PDF

Uploaded by

Copyright:

Available Formats

AUDITING AND RELATED SERVICES

1. The Philippine Standards on Review Engagements (PSREs) are to be applied in

3. The Philippine Standards on Assurance Engagements (PSAEs) are to be applied in

4. The Philippine Standards on Quality Control (PSQCs) are to be applied to

5. What level of assurance is provided by the auditor in an audit engagement?

6. What level of assurance is provided by the practitioner in a review engagement?

10. In a review engagement, the practitioner performs which of the following?

Obtain an understanding Tests of Tests of

11. A compilation engagement

I. Historical or prospective financial information.

14. What assurance is provided by the auditor in an agreed-upon procedures engagement?

16. Reports on agreed-upon procedures are intended to be distributed

17. The report on an agreed-upon procedures engagement should contain

20. A practitioner is associated with financial information when

I. The practitioner attaches a report to that financial information.

Code of Ethics for Professional Accountants in the Philippines

A. IFAC 2010 Code of Ethics for Professional Accountants

I. Identify threats to compliance with the fundamental principles.

I. Safeguards created by the profession, legislation or regulation.

37. Which of the following is not a contingent fee?

49. Accepting gifts or hospitality (unless inconsequential or trivial) may create

You might also like