1.

Which of the following procedures would an accountant most likely perform in a compilation engagement
a. Test the accounting records c. Apply analytical
procedure
b. Collect, classify and summarized financial information d. Assess risk components

2. The procedures employed in doing compilation are

a. Less extensive than review procedures but more extensive than agreed upon procedures
b. Designed to enable the accountant to express a limited assurance
c. Not designed to enable the accountant to express any form of assurance
d. Designed to enable the accountant to express a negative assurance

3. Which of the following procedures is normally performed in connection with a compilation engagement
a. Collect, classify and summarize financial information
b. Inquire of management about subsequent events
c. Applying analytical review procedures
d. Making inquiries of management concerning actions taken at board meeting

4. The use of negative assurance in audit reports on financial statements is

a. Encourage by PICPA
b. Violation of the professional standards
c. Properly located in the opinion paragraph of the unqualified report
d. A help in clarifying the degree of responsibility being assumed by the auditor

5. Which of the following is not true about reports provided a CPA

a. In a compilation engagement, no assurance is expressed and the users of financial
information do not derive any benefit from the CPAs involvement
b. In the audit engagement, the auditor provides high level of assurance that the financial
information is free of material misstatement
c. In a review engagement, the CPAs moderate assurance is expressed in the form of negative
assurance
d. For agreed upon procedures, the CPA provides a report on factual; findings and no assurance
is expressed

6. A CPA who is not independent may issue

a. Review report b. Compilation report c. Special report d. Report expressing a
qualified opinion

7. Which of the following statements about assurance engagements is not correct

 a. The Philippine Standards on Assurance Engagements issued by AASC describe the
objectives and elements of assurance engagements to provide either a high, moderate or low
level of assurance
b. Assurance engagements are intended to enhance the credibility of information about a subject
matter by evaluating whether the subject matter conforms in all material respects with suitable
criteria
c. Not all engagements performed by professional accountant are assurance engagements
d. The subject matter of an assurance engagement may take many forms such as data, systems
and processes

8. Which of the following services provides a moderate level of assurance about client financial statements
a. Compilation b. Review c. Compliance with contractual obligations d. Forecast and
projections

9. Which of the following is not one of the requirements before accepting an assurance engagements
a. The responsible party and the intended user of assurance report should be from different
organization
b. The practitioner should be competent and independent
c. The practitioner should accept the engagement only if the subject matter is identifiable and in
the form that can be subjected to evidence gathering procedures
d. The practitioner should accept the engagement only if the subject matter is the responsibility
of another party

10. Which of the following generalization is incorrect about the reliability of evidence gathered by practitioner
a. Evidence in the form of documents and written representation is more likely to be reliable
b. Evidence from external source is more reliable than the generated internally
c. Evidence generated internally is more reliable when subject to appropriate controls within the
entity
d. Evidence obtained indirectly by the practitioner is more likely reliable than that obtained
directly

11. When a CPA is associated with the preparation of forecast all of the following should be disclosed, except
a. Probability of achieving the forecast c. Character of work performed
b. Sources of information d. Major assumption used

12. Given one or more hypothetical assumption, a responsible party may prepare, to the best of its knowledge and
belief, an entity’s expected financial position, result of operations and cash flows. Such prospective financial
statements are known as
a. Proforma financial statements c. Partial presentation
b. Financial projections d. Financial forecast

13. An examination of financial forecast is a professional service that involves

 a. Evaluating the preparation of the financial forecast and the support underlying management
assumption
b. Assembling financial forecast that is based on management assumption
c. Assuming responsibility on the financial forecast
d. Limiting the distribution of the accountant reports to management and board of directors

14. When an accountant examines financial forecast that fails to disclose several significant assumptions used to
prepare the forecast, the accountant should describe the assumption in the accountant’s report and issue an
a. Qualified opinion c. Unqualified with emphasis of a matter paragraph
b. Adverse opinion d. Disclaimer of opinion

15. Error includes

a. Engaging in complex transactions that are structured to misrepresent the financial position or
financial performance of the entity
b. Concealing or not disclosing facts that could affect the amounts recorded in the financial
statements
c. An incorrect accounting estimate arising from oversight or misinterpretation of facts
d. Intentional misapplication of accounting policies relating to amounts, classification, manner
of presentation and disclosure

16. Fraud involves one or more members of management or those charge with governance is referred to
a. Management fraud c. Fraudulent financial reporting
b. Employee fraud d. Misappropriation of assets