GENERAL DIRECTIONS:

➢ Say a little prayer to relax and boost yourselves. Read all the questions carefully.
➢ You can use pencil, friction pen, or permanent ink (black or blue) for your answer.
Avoid erasures/ alterations.
➢ Do not copy from your seatmates. Cheating is strictly prohibited and is punishable.
➢ Trust yourself. You know more than you think you do.

I. MULTIPLE CHOICE (1 point each)

Write the letter of your choice in capital letters before the corresponding number. Each
choice has an equal chance of being right but you must go for what is best for you.
Choose wisely.
1. Emma Jean, a Filipino certified public of finance and taxation, or is employed in a
accountant (CPA), is an accounting teacher in position that requires a CPA.
a higher education institution in Davao City. C. Is in an educational institution which
She plans to become an ASEAN Chartered involves teaching of accounting, auditing,
Professional Accountant (ACPA). For this management advisory services, accounting
purpose, which of the following is/are among aspect of finance, business law, taxation, and
the requirements? other technically-related subjects.
I. NBI clearance. D. Holds out himself/herself as one skilled in
II. Photocopies of CPD certificates of credit the knowledge, science and practice of
units earned accounting, and as someone qualified to render
III. Certificate for ACPA Registration from professional services as a CPA.
NACPAE since she is a CPA in the education
4. A CPA performed the following gengagements
sector
in March 2023. Which is considered an
IV. Registration Fee of P1,500
attestation engagement?
A. I only
I. Audit of 2022 financial statements
B. I, II, and IV only
II. Examination of 2024 proposed financial
C. IV only
statements
D. I, II, III and IV
A. I only
2. Which of the following statements about the B. II only
Philippine Accountancy Act of 2004 is LEAST C. Both I and II
LIKELY CORRECT? D. Neither I nor II
A. It shall provide for and govern the
5. Which of the following meets the definition
standardization and regulation of accounting
of an assurance engagement but does NOT need
education and the examination for registration
to be performed in accordance to the Framework
of certified public accountants.
for Assurance Engagement?
B. It shall provide for and govern the
A. Consulting (or advisory) engagements, such
supervision, control, and regulation of the
as management and tax consulting.
practice of Filipino professional accountants
B. The preparation of tax returns where no
in the Philippines and abroad.
conclusion conveying assurance is expressed.
C. It is aligned with the policy of the State
C. Agreed-upon procedures engagements and
to recognize accountants in nation building
compilations of financial or other
and development.
information.
D. It aims to develop and nurture professional
D. Engagements to testify in legal proceedings
accountants whose standards of practice and
regarding accounting, auditing, taxation or
service shall be excellent, qualitative, world
other matters.
class, and globally competitive.
6. Which of the following procedures is a
3. A person is deemed to be in practice of the
practitioner least likely to perform during a
accounting profession in commerce and industry
review engagement?
when he/she:
A. Comparing the financial statements with
A. Holds, or is appointed to a position in an
anticipated results in budgets and forecasts.
accounting professional group in government or
B. Studying the relationships of financial
in a government-owned and/or controlled
statement elements expected to conform to
corporation, where decision-making requires
predictable patterns.
professional knowledge in the science of
C. Inquiring of management about actions taken
accounting.
at the board of directors' meetings.
B. Is involved in decision-making requiring
D. Observing the safeguards over access to and
professional knowledge in the science of
use of assets and records.
accounting, as well as the accounting aspects

Page 1 of 10
7. Under the Code of Ethics, the following are disqualified from taking another set of
examples of situations that might create a examinations unless he/she submits certificate
conflict of interest, EXCEPT of completion of refresher 'course to the
A. Providing services to a seller and a buyer satisfaction of the PRBOA that he/she enrolled
in relation to different transactions. in and completed at least twenty-four (24)
B. Preparing valuations of assets for two units of subjects given in the licensure
parties who are in an adversarial position examination. Such a certificate shall be valid
with respect to the assets. for ____ years from the date of completion.
C. Representing two clients in the same matter A. One C. Three
who are in a legal dispute with each other. B. Two D. Four
D. In relation to a license agreement,
13. The PRBOA, subject to the approval of the
providing an assurance report for a licensor
PRC, may revise or exclude any of the subjects
on the royalties due while advising the
and their syllabi, and add new ones as the
licensee on the amounts payable
need arises, provided that the change shall
8. When accountants are not independent, which not be more often than:
of the following reports can nevertheless be A. Every two years C. Every four years.
issued? B. Every three years. D. Every five years.
A Compilation report. 14. Evaluate the following statements:
B. Standard unmodified audit report. I. In a year, the Professional Regulatory
C. Examination report on a forecast. Board of Accountancy (PRBOA) ordinarily
D. Examination of internal control over administers three (3) CPA licensure
financial reporting examinations in the Philippines.
9. According to the IRR of RA 9298, the II. As of the most recent update, a
following can teach business law: professional identification card has a
СРА Members of the IBP validity of five (5) years.
A. Yes Yes A. True, True C. False, True
B. Yes No B. True, False D. False, False
C. No Yes
D. No No 15. Certificate under seal, bearing a
10. The following first-time candidates had registration number, issued to an individual,
these CPALE ratings: by the PRC, upon recommendation by the Board
of Accountancy, signifying that the individual
Exercises CPALE Ratings has complied with all the legal and procedural
Subject1 Subject2 Subject3 Subject4 Subject5 Subject6 requirements for such issuance, including, in
Berlin 90 88 95 74 74 64 appropriate cases, having successfully passed
Manila 87 68 65 75 81 76
the CPA licensure examinations.
Nairobi 94 71 61 73 86 84
Rio 89 78 64 74 86 82
A. Certificate of registration.
Tokyo 81 89 73 65 65 77 B. Certificate of accreditation.
C. Certificate of identification.
Statement 1: Only two candidates failed. D. Certificate of quality review.
Statement 2: One candidate had to retake only 16. The Continuing Professional Development
one subject. (CPD) programs for accountancy shall have
Statement 3: Two candidates would receive these objectives:
conditional credits. • To raise and maintain the
Statement 4: Only two candidates passed. professional's capability for
A. Only one statement is correct. delivering professional services
B. Only two statements are correct. • To attain and maintain the
C. Only three statements are correct. minimum standards and quality in
D. All statements are correct. the practice of the profession
11. Any candidate who fails in ___________ • To make the profession
complete CPA Board Examinations shall be financially rewarding
disqualified from taking another set of A B C D
examinations unless he/she submits evidence to Yes Yes No Yes
the satisfaction of the BOA that he/she No Yes Yes No
enrolled in and completed at least _______ of Yes No Yes No
subjects given in the licensure examination.
A. 3, 15 units per year for a total of 60 17. CPD competence areas include:
units A. technical skills.
B. 2, 24 units B. professional competence.
C. 2, 15 units/year, total of 60 units C. professional values, ethics, and
D. 3, 24 units attitudes.
12. Any candidate who fails in two (2) D. All of the 'above.
complete CPA Board Examinations shall be

Page 2 of 10
18. Which of the following is false?
Philippine Framework for Assurance Engagements
A. describes the objective and elements of
assurance engagements intended to provide
either a reasonable assurance or limited
assurance.
B. identifies engagements to which Philippine
Standards on Auditing, Philippine Standards on
Review Engagements, and Philippine Standards
on Assurance Engagements apply.
C. establishes standards or provides
procedural requirements for the performance of
assurance engagements.
D. provides a frame of reference for the
Auditing and Assurance Standards Council in
its adoption of International Standards on
Auditing, International Standards on Review
Engagements and International Standards on
Assurance Engagements for application in the
Philippines.
19. Fer PRBOA Resolution 254 Series of 2017,
which of the following statements is
INCORRECT?
A. The following can be a CPD provider: sole
proprietor, partnership, corporation,
government institutions, and foreign entities.
B. Members of PRBOA are disqualified to be a
CPD provider during their incumbency.
C. Application for CPD program accreditation
should be filed 60 days before the offering of
the program.
D. The CPD monitor should' submit the
monitoring report to PRC within 15 working
days after the conduct of the program.
20. With respect to the most recent IRR
(PRC Resolution 1146 Series of 2019) for CPD
Law, which of the following statements is
INCORRECT?
A. The new provisions would take effect by
March 1, 2019.
B. It would refer to CPD Law of 2016.
C. 15 CPD credit units would be required for
the renewal of the PRC ID.
D. 120 CPD credit units would be required for
the accreditation of CPAs in government.
21. What is the minimum number of CPD credit
units that a registered professional
accountant in public practice should
accumulate for accreditation within the three-
year period starting 2019
A. 15 credit units C. 100 credit units
B. 45 credit units D. 120 credit units
22. Which of the following is NOT a ground for
the suspension or revocation of certificate of
registration and professional identification
card?
A. Possession of an unsound mind
B. Practice in more than one field of
accountancy
C. Conviction of a criminal offense involving
moral turpitude
D. Unprofessional or unethical conduct,
malpractice, or violation of RA 9298.
23. The punishment, upon conviction, for any
person who has violated any of the provisions
of the Accountancy Act of 2004, or any of its
Implementing Rules and Regulations as
promulgated by the Board of Accountancy:
A. A fine of not less than fifty thousand
pesos (P50,000.00) and imprisonment for a
period not exceeding two (2) years.
B. A fine of not less than fifty thousand
pesos (P50,000.00) but not an imprisonment.
C. No fine but an imprisonment for a period
not exceeding two (2) years.
D. A fine of not less than fifty thousand
pesos (P50,000.00) or imprisonment for a
period not exceeding two (2) years, or both.
24 CPA whose certificate has been revoked:
A. Is required to take the CPA Board Licensure
examinations before reinstatement
B. May be reinstated by the PRBOA after the
expiration of two (2) years from the date of
revocation
C. Can no longer be reinstated as a Certified
Public Accountant
D. Has committed a crime involving moral
turpitude
25. Evaluate the following statements:
I. A BSA graduate is NOT allowed to practice
public accountancy under his or her own name
immediately upon passing the CPA Board Exams.
II. The certificate of accreditation for CPAS
in education is granted only once and remains
in effect until withdrawn, suspended, or
revoked in accordance with RA 9298.
A. True, True C. False, True
B. True, False D. False, False
26. Evaluate the following statements:
I. Single practitioners and partnerships for
the practice of public accountancy shall be
registered certified public accountants in the
Philippines.
II. A certificate of accreditation shall be
issued to certified public accountants in
public practice only upon showing, that such
registrant has acquired a minimum of three (3)
years meaningful experience in any of the
areas of public practice including taxation.
A. True, True B. True, False
C. False, True D. False, False
27. Which of the following functions would
usually be performed by a senior (experienced)
associate?
A. Signs the audit report.
B. Performs detailed audit procedures.
C. Prepares the audit program and performs
more complex audit procedures
D. Tasked with liaison work between. partners
and other team members
28. When the auditor issues an erroneous
opinion as the result of an underlying failure
to comply with the requirements of auditing
standards, it results in
A. business failure B. audit failure
C. audit risk D. all of the above
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29. An examination of a financial forecast is
a professional service that involves
A. compiling or assembling a financial
forecast that is based on management's
assumptions.
B. limiting the distribution of the
accountant's report to management and the
board of directors.
c. assuming responsibility to update
management on key events for one year after
the report's date.
D. evaluating the preparation of a financial
forecast and the support underlying
management's assumptions.
30. Which of the following statements applies
to consultation services engagements?
A. practitioner should obtain an understanding
of the internal control to assess controlrisk.
B. A practitioner is not permitted to compile
a financial forecast.
C. A practitioner is to maintain an appearance
of independence.
D. A practitioner should obtain sufficient
relevant data to complete the engagement.
31. The objective of assurance services is to
A. Improve the firm's outcomes.
B. Compare internal information and policies
to those of other firms.
C Enhance decision making.
D. Provide more timely information
32. Subjects or citizens of foreign countries:
A. May be allowed to practice accountancy in
the Philippines, regardless of the provisions
of existing laws and international treaty
obligations, including mutual recognition
agreements entered into by the Philippine
government with other countries.
B. Are not allowed to practice accountancy in
the Philippines, unless they take, and pass,
the certified public accountant licensure
examination given by the Board of Accountancy
C. May be allowed to practice accountancy in
the Philippines, subject to the provisions of
existing laws and international treaty
obligations, including mutual recognition
agreements entered into by the Philippine
government with other countries.
D. Are never allowed to practice accountancy
in the Philippines because they will
jeopardize the interests of Filipino certified
public accountants.
33. RA 9298 provides that temporary or special
permits may be issued to Foreign CPAs in the
following situations:
A. A foreign CPA was called for consultation
which, in the judgment of the Board of
Accountancy, is essential for the development
of the Philippines. The permit restricts the
foreign CPA's practice to the particular
consultation work being performed. No Filipino
CPA was qualified for such consultation.
B. A foreign CPA was engaged to lecture on
fields essential to accountancy education in
the Philippines. The permit restricts the CPA
to teaching only, and limited public practice
provided such practice is conducted outside
class hours.
C.A foreign CPA, an IFRS expert, is engaged
for services deemed essential for the
advancement of accountancy in the Philippines
which can also be performed by Filipino CPAs
D. All of the above situations do not justify
the issuance of a temporary or special permit.
34. Violations of the IRR shall subject the
CPA to fines and penalties as provided for
in RA 9298, including its IRR. Such violations
include:
I. Engaging in public accounting practice
without first registering with the PRBOA and
the SEC
II. Continuing to engage in the practice of
public accountancy after the expiration of the
registration/accreditation
III. Continuing to engage in the practice of
public accountancy after suspension,
revocation or withdrawal of registration
IV. Giving any false information, data,
statistics, reports or other statement which
tend to mislead, obstruct, or obscure the
registration of an Individual CPA, Firm or
Partnership of CPAs under the IRR.
V. Giving any misrepresentation to the effect
that registration was secured in truth when in
fact, it was not secured
VI. Failure to provide continuing professional
development to its staffs who are part of the
audit team
A. I, II, III, IV, V, and VI
B. I, II, III, IV, and V
C. I, II, III, IV, and VI
D. I, II, IV, V, and VI
35. Which of the following types of
documentary evidence should the auditor
consider to be the most reliable?
A. A sales invoice issued by the client and
supported by a delivery receipt from an
outside trucker.
B. A check, issued by the company and bearing
the payee's endorsement, that is included with
the bank statements mailed directly to the
auditor. A working paper prepared by the
client's controller and reviewed by the
client's treasurer.
D. Confirmation of an account payable balance
mailed by and returned directly to the Auditor
36. The following are qualifications of the
members of the Board of Accountancy, EXCEPT:
A. Natural-born citizen and resident of the
Philippines.
B. Duly registered CPA with at least five (5)
years of work experience in any scope of
practice of accountancy.
C. Good moral character, not convicted of
crimes involving moral turpitude.
D. No direct, or indirect pecuniary interest
in any school, college, university or
Page 4 of 10
institution conferring the B.S. Accountancy
degree or providing CPA Review classes.
37. The following qualifications are common to
members of the PRBOA and the applicants for
CPALE, EXCEPT:
A. good moral character.
B. natural-born Filipino citizen.
C. Both A and B.
D. Neither A nor B.
38. The Accredited Integrated Professional
Organization (AIPO) shall submit its
nominations for the PRBOA, with complete
documentation, to the Commission
A. Not later than sixty (60) days prior Leo
the expiry of the term of an incumbent
chairman or member.
B. On the date of expiry of the term of an
incumbent chairman or member.
C. After the 60th day from the expiry of the
term of an incumbent chairman or member.
D. Upon request by the Commission for the
submission of nominations.
39. The following are among the powers and
functions of the PRBOA, EXCEPT:
A. To prescribe and/or adopt a Code of Ethics
for the practice of accountancy
B. To ensure, 'in coordination with DepEd and
CHED that all senior high schools and higher
education institutions offering accountancy-
related programs and strand comply with
prescribed policies, standards and
requirements
C. To conduct an oversight into the quality of
audits of financial statements.
D. None of the choices
40. The following are grounds for suspension
or removal of members of the PRBOA, EXCEPT:
A. Neglect of duty or incompetence.
B. Violation or tolerance of any violation of
RA 9298 and its IRR, or the Code of Ethics and
technical and professional standards of
practice for CPAS.
C. Pending case on a crime involving moral
turpitude.
D. Manipulation or rigging of the CPA
licensure examination results.
41. According to the IRR of RA 9298, this
group is tasked to assist the PRC in
accepting, evaluating, and approving
applications for accreditation of CPE
programs, activities or sources as to their
relevance to the profession and determine the
number of CPE credit units to be earned on the
basis of the contents of the programs,
activity or source submitted by the CPE
providers.
A. PRC Quality Review Committee
B. PRC Education Technical Council
C. PRC CPE Council
D. PRC CPD Committee
42. The Quality Review Committee (ORC) hall
have the following functions:
A. Conduct quality control review on
applicants for registration to practice.
public accountancy and render a report on such
quality review
B. Revoke the certificate of registration and
professional ID of an individual CPA, firm, or
partnership. of CPAs who have not observed
quality control measures.
C. Both A and B
D. Neither A nor BB
43. Which of the following is not represented
in both AASC and FRSC?
A. SEC B. BSP
C. PRBOA D. BIR
44. Evaluate the following statements:
I. The Philippine Institute of Certified
Public Accountants is registered with the SEC
as a stock corporation and recognized by the
PRBOA, subject to the approval by the PRC.
II. Membership in PICPA shall be a bar to
membership in any other association of
certified public accountants.
A. True, True B. True, False
C. False, True D. False, False
45. Sectoral organizations have been
established to promote the interests of groups
of professional accountants. Which of the
following is the sectoral organization for
CPAS employed under oil and gas companies?
A. GACPA B. ACPAPP
С. АСРАСІ D. NACPAE
46. The Securities Exchange Commission
restrict accredited auditors from providing
many non-audit services to their audit
clients. Which of the following is true for
SEC-accredited auditors?
I. They are restricted from providing internal
audit outsourcing services to audit clients.
II. There is no restriction on providing non-
audit services to audit clients.
A. I only B. II only
C. Both I and II D. Neither I nor. II
47. Which of the following is a CORRECT
qualification of the Chairman, and two
Commissioners of COA?
A. A naturalized citizen of the Philippines
B. At least forty (40) years of age upon
appointment
C. CPAs with no less than five (5) years of
auditing experience or members of the
Philippine bar who have been engaged in law
practice for at least five (5) years
D. Must not have been candidates for any
elective position preceding appointment
48. Evaluate the following statements:
Statement 1: The mission of COA is to ensure
accountability for public resources, promote
transparency, and help improve government
operations, in partnership with stakeholders,
for the benefit of the Filipino people.
Statement 2: The Commission on Audit can
conduct special audits on NGOs upon request by
Page 5 of 10
proper authorities or as determined by the
Chairman.
A. Only statement 1 is correct.
B. Both statements are correct.
C. Only statement 2 is correct.
D. Both statements are incorrect.
49. A CPA firm is reasonably assured of
meeting its responsibility to provide services
that conform with professional standards by
A. Maintaining an attitude of independence in
its engagements.
B. Adhering to Philippine Standards on
Auditing (PSAs).
C. Having an appropriate system of quality
management.
D. Joining professional organizations that
enforce ethical conduct.
50. Expertise in a field other than accounting
or auditing may include expertise in relation
to the following, except.
A. Applying methods of accounting for deferred
income tax.
B. Estimating oil and gas reserves.
C. Interpreting contracts, laws and
regulations.
D. Valuation of environmental liabilities and
site clean-up costs.
51. A practitioner's report on agreed-upon
procedures that is in the form of procedures
and findings should contain
A. negative assurance that the procedures did
not necessarily disclose all reportable
conditions.
B. an acknowledgment of the practitioner's
responsibility for the. sufficiency of the
procedures.
C. a statement of restrictions on the use of
the report.
D. a disclaimer of opinion on the entity's
financial statements.
52. A CPA certificate is an evidence of
A. recognition of independence.
B. basic competence at the time the
certificate is granted.
C. culmination of the education process.
D. membership in the PICPA.
53. An audit can have a significant effect on
A. information risk.
B. business risk.
C. the risk-free interest rate.
D. all of these.
54. Which of the following is a cause of
information risk?
A. Voluminous data.
B. Biases and motives of the provider of
information.
C. Remoteness of the provider of the
information.
D. Each of these is a cause of Information
risk.
55. The main way (s) to reduce information
risk is to have
A. the user verify the information.
B the user share the information risk with
management
C. audited financial statements provided.
D. all of these.
56. As The predominant type of attestation
service performed by CPAs is
A. audit. B. review.
C. compilation D. management consulting
57. Upon completion of a typical audit, the
auditor has
A. total assurance that all material errors
and irregularities have been found
B. high level of assurance that all material
errors and regularities have been found
C. a low level of assurance that all material
errors and irregularities have been found
D. no assurance that all material errors
58. The single feature that most clearly
distinguishes auditing, attestation, and
assurance is the
A. A type of service being rendered.
B. training required to perform the service.
C. scope of services.
D. CPA's approach to the service.
59. Which of the following attributes is more
closely associated with assurance services
performed by CPA firms than with other lines
of professional work?
A. Integrity
B. Competence
C. Independence
D. Keeping informed on current professional
developments
60. An investor, while reading the financial,
statements of Silver Corporation, Learned that
the statements are accompanied by an
unqualified auditor's report. From this the
investor may conclude that:
A. Any disputes over significant accounting
issues have been settled to the auditor's
satisfaction.
B. The auditor is satisfied that Silver Is
operationally efficient.
C. Informative disclosures in the financial
statements but not necessarily in the notes to
financial statements are to be regarded as
reasonably adequate
D. The auditor has ascertained that Silver's
financial statements have been prepared
accurately.
61. A CPA should maintain objectivity and be
free of conflicts of interest when performing:
A. Audits, but not any other professional
services
B. All attestation services, but not other
professional services
C. All attestation and tax services, but not
other professional services
D. All professional services
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62. A summary of findings rather than
assurance is most likely to be issued on which
engagement?
A. Agreed-upon procedures B. Compilation
C. Examination D. Review
63. Which of the following professional has
primary responsibility for the performance of
an audit?
A. The managing partner of the firm
B. The senior assigned to the engagement
C. The manager assigned to the engagement
D. The partner in charge of the engagement
64. Which of the following services provides
the highest level of assurance to third
parties about a company's financial
statements?
A. Audit.
B. Review.
C. Compilation
D. Each of the above provides the same level
of assurance.
65. The most common type of audit report
contains a(n):
A. adverse opinion.
B. disclaimer of opinion.
C. qualified opinion.
D. unqualified opinion.
66. Which of the following is a correct
statement?
A. An audit provides limited assurance by
attesting to the fairness of the client's
assertions.
B. A review provides positive assurance by
attesting the reliability of the client's
assertions.
C. Management consulting services provide
attestation in all cases.
D. Accounting services do not provide
attestation.
67. Unlike consulting services, assurance
services:
A. make recommendation to management
B. report on how to use information
C. report on the quality of information
D. are two-party contracts.
68. Financial statements audits:
A. reduce the cost of capital
B. report on compliance with laws and
regulations
C. assess management's efficiency
D. overlook information risk
69. A summary of findings rather than
assurance is most likely to be included in
a(n):
A. Agreed-upon procedures report
B. Compilation report
C. Examination report
D. Review report
70. The risk associated with a company's
survival and profitability is referred to as:
A. Business Risk B. Information Risk
C. Detection Risk D. Control Risk
71. An engagement in which a CPA firm arranges
for a critical review of its practices by
another CPA firm is referred to
A. Peer Review Engagement
B. Quality Control Engagement
C. Quality Assurance Engagement
D. Attestation Engagement
72. Attestation risk is limited to a low level
in which of the following engagement (s)?
A. Both examinations and reviews
B. Examinations, but not reviews
C. Reviews, but not examinations
D. Neither examinations nor reviews
73. An operational audit differs in many ways
from an audit of financial statements. Which
of the following is the best example of one of
these differences?
A. The usual audit of financial. statements
covers the four basic statements, whereas the
operational audit is usually limited to either
the balance sheet or the income statement
B. The boundaries of an operational audit are
often drawn from an organization chart and are
not limited to a single accounting period
C. Operational audits do not ordinarily result
in the preparation of a report
D. The operational audit deals with pre- tax
income
74. The review of a company's financial
statements by a CPA firm:
A. Is substantially less in scope of
procedures than an audit
B. Requires detailed analysis of the major
accounts
C. Is of similar scope as an audit and adds
similar credibility to the statements
D. Culminates in issuance of a report
expressing the CPA's opinion as to the
fairness of the statements
75. When performing an engagement to review a
nonpublic entity's financial statements, an
accountant most likely would:
A. Obtain an understanding of the entity's
internal control.
B. Limit the distribution of the accountant's
report.
C. Confirm a sample of significant accounts
receivable balances.
D. Ask about actions taken at board of
directors' meetings
76. 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 any agreement (written or oral) between the
CPA and the client to the contrary.
B. Working papers include schedules and
memoranda pre- pared and submitted by the
client of the CPA.
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C. All working papers, except reports
submitted by a CPA to his/her client shall be
treated confidential and privileged.
D. Working papers shall be treated
confidential and privileged and remain the
property of the CPA unless such documents are
'required to be produced through subpoena
issued by any court, tribunal, or government
regulatory or administrative body.
77. 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.
78. Which of the following has the power
quality of audits of financial statements
through the review of the quality control
measures instituted by auditors?
A. Bureau of Internal Revenue
B. Securities and Exchange
C. Commission Board of Accountancy
D. Insurance Commission
79. In the exercise of its power to conduct an
oversight into the quality of audits, the BOA
organized the Department of the Philippine
Institute of Certified Public Accountants
(PICPA) to conduct an independent study,
appraisal, or review of the quality of audit
of financial statements.
A. Quality Assurance Review
B. Quality Control Review
C. Independent Quality Assurance Review
D. Independent Quality Control Review
80. Which of the following is a typical
objective of an operational audit?
A. To determine whether an entity's internal
control system is adequately operating as
designed.
B. To determine whether an entity's
operational information is in accordance with
PFRS.
C. To determine whether an entity's financial
statements present fairly the results of
operations.
D. To determine whether an entity's specific
operating units are functioning efficiently
and effectively

II. TRUE OR FALSE (30 Points)

_________________1. As used in the Philippine Framework for Assurance Engagements, the term
"practitioner" refers to a CPA in public practice.
_________________2. In a limited assurance engagement, the practitioner expresses his/her
conclusion in positive form.
_________________3. Common examples of assurance engagements are engagements to apply agreed-upon
procedures and consulting.
_________________4. When an assurance engagement is a part of a larger engagement (for example, a
business acquisition consulting engagement which includes a requirement to provide assurance on
historical financial information), the Philippine Framework for Assurance Engagements shall be
applied only to the assurance portion of the engagement.
_________________5. In some cases, the ethical requirement on professional competence can be
satisfied by using the work of individuals from other disciplines referred to in the standards as
experts.
_________________6. In a direct reporting engagement, the responsible party is responsible for the
subject matter of the engagement.
_________________7. Under all situations, the responsible party is the party who engages the
practitioner (1.e., the engaging party).
_________________8. The responsible party can be one of those for whom the practitioner prepares
the assurance report.
_________________9. In an engagement to provide assurance about the effectiveness of an entity's
internal control, the subject matter is the assertion of management about its effectiveness.
_________________10. An appropriate subject matter is one that is capable of consistent evaluation
or measurement against the identified criteria.
_________________11. The criteria or benchmarks that are used to measure or evaluate the subject
matter of the assurance engagement need not be available to the intended users.
_________________12. The quantity of evidence is affected by the risk of the subject matter
information being materially misstated and also by the quality of such evidence (the greater the
risk and the higher the quality, the more evidence is likely to be required.
_________________13. Assurance engagement risk is the possibility that the practitioner will
express an inappropriate conclusion on a subject matter information that is materially misstated.
_________________14. The conclusion: "In our opinion, internal control is effective in all material
respects, based on XYZ criteria." expresses a reasonable assurance in positive form.

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_________________15. The practitioner's conclusion in an assertion-based engagement can be worded
in terms of the intended users' assertion.
_________________16. PSA 120 (Framework of Philippine Standards on Auditing) applies to audits and
related services such as taxation and consultancy.
_________________17. In a review engagement, the auditor provides a high, but not absolute level of
assurance (expressed in the form of negative assurance) that the information subject to review is
free of material misstatement.
_________________18. For agreed-upon procedures and compilation engagements, no assurance is
expressed.
_________________19. Because most of the evidence available to the auditor is conclusive, rather
than persuasive, in nature, absolute assurance in auditing is not attainable.
_________________20. A review of financial statements normally involves an assessment of an
entity's accounting and internal control systems.
_________________21. A practitioner engaged to perform related services such as agreed-upon
procedures, review, and compilation need not be the auditor of the entity's financial statements.
_________________22. A practitioner is associated with financial information when he/she attaches a
report to that information or consents to the use of his/her name in a professional connection.
_________________23. Independence is not a requirement for a compilation engagement.
_________________24. In a financial statement audit, reasonable assurance is obtained when the
auditor has gathered sufficient appropriate audit evidence to reduce audit risk to an acceptably
low level.
_________________25. In general, misstatements are considered to be material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of the financial statements.Tove _________________26. Audit risk is the risk that the
auditor will provide an unmodified opinion on financial statements that are, in fact, materially
misstated.
_________________27. A practitioner's report expressing an opinion on an entity's internal controls
should state that the study and evaluation of the internal controls was conducted in accordance
with Philippine Standards on Auditing (PSAs).
_________________28. A summary of findings rather than assurance is most likely to be included in
an examination report.
_________________29. The risk that information is misstated is referred to as information risk.
_________________30. The work of internal auditors' is primarily for the benefit of the entity's
management and its board of directors.

III. Fill out the table below to summarize pointers on the PRBOA: (10 points)
Composition __________ -(Chairman) including ________-(members)
Nominations (No. of nominees) ____________-(PICPA) ________-(PRC) ___________-(President)
One (1) complete term ________________________________________________________
Maximum no. of years _________________
Vice Chairman (term) __________________

-end-

Prepared by:
LEINELL B. STA MARIA, CPA
Course Instructor

Reviewed by:
Kristan M. Licaycay, CPA, MBA
Program Head

Approved by:
Jelwin DL. Baustista, CPA, MBA
OIC, Dean of CBA

"You are braver than you believe, stronger than you seem, and smarter than you think.”

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