1. What are the three (3) most commonly sought assurance services?

A. Audits, review and compilations.

B. Audits, reviews and other assurance services.
C. Audits, compilations and other assurance services.
D. Reviews, compilations and other assurance service.

2. The "hallmark" of auditing is

A. available audit technology C. materiality and audit risk
B. generally accepted auditing standards D. professional judgment

3. Auditing is based on the assumption that financial data and statements are
A consistently applied. C. presented fairly.
B. in conformity with appropriate criteria. D. verifiable.

4. An audit of financial statements is conducted to determine if the

A. client's internal control is functioning as intended.
B. organization is operating efficiently and effectively.
C. auditee is following specific procedures or rules set down by some higher authority.
D. overall financial statements are stated in accordance with an applicable financial reporting framework.

5. Which of the following methods is MOST commonly used to reduce information risk?
A. Allow users to verify information.
B. Have the financial statements audited.
C. Allow all users to prepare the statements.
D. Users share information risk with management.

6. The purpose of an audit of financial statements is to

A. enhance the knowledge and skills of external auditors
B. enhance understanding of the stakeholders of the company
C. provide government agencies, such as BIR with basis for assessments
D. enhance the degree of confidence of intended users of the financial statements

7. Which of the following best describes the reason why independent auditors report on financial statements?
A. A poorly designed internal control structure may be in existence.
B. A management fraud may exist and it is more likely to be detected by independent auditors.
C. Different interests may exist between the company preparing the statements and the persons using the
statements.
D. A misstatement of account balances may exist and is generally corrected as the result of the independent
auditor's work.

8. An external audit:
A. Complements an internal audit C. Contradicts an internal audit
B. Confirms an internal audit D. Overlaps an internal audit

9. This type of audit is performed in order to determine the degree of adherence to specific procedures and rules
setdown by some higher authority.
A. Compliance audit C. Internal audit
B. Financial statement audit D. Operational audit

10. Which of the following BEST describes the operational audit?

A. It concentrates on implementing financial and accounting control in a newly organized company.
B. It attempts and is designed to verify the fair presentation of a company's results of operations.
C. It concentrates on seeking out aspects of operations in which waste would be reduced by theintroduction of
controls.
D. It requires the constant review by internal auditors of the administrative controls as they relate tooperations
of the company.