Auditing Theory-1

D

Philippine Accountancy Act of 2004 (RA9298)1. The objective of the Philippine Accountancy Act of 2004 includes:

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. All of the above.

D

2. Which of the following does not constitute a practice of accountancy?

a. A person holding out himself as one skilled in the knowledge and practice ofaccounting and as a qualified person to render professional services as a CPAto more than one client.

b. A person representing his/her employer before government agencies on taxand other accounting related matters.

c. A person in educational institution teaching accounting, auditing, business law,taxation or other technically related subjects.

d. A person is appointed as marketing director of a government owned andcontrolled corporation.

A

3. Which of the following is not one of the qualifications of the members of the Board ofAccountancy?

a. Must be a natural-born CPA and a resident of the Philippines.

b. Must be a duly Certified Public Accountant with at least ten yearsexperience in practice of accountancy.

c. Must be of good moral character.

d. Must not have been convicted of crimes involving moral turpitude

D

4. Which is the least function of the Board of Accountancy?

a. To prepare, adopt, issue or amend syllabi at the subjects for examinationsin consultation with the academe.

b. To prepare questions for the CPA licensure examination which shall strictlywithin the scope of the syllabi of the subjects for examination.

c. To investigate violations of the RA 9298

d. To supervise PICPA

C

5. The auditing standard setting body created by the Board of Accountancy is knowns as a. Financial Reporting Standards Council (FRSC) b. Auditing Standards and Practices Council (ASPC) c. Accountancy Standards Council (ASC) d. Auditing and Assurance Standards Council (AASC)

D

6. The sector that is most represented in the AASC is the a. Commerce and Industry b. Academe c. Government d. Public Practice

B

7. Which of the following government regulatory agencies is not represented in theAASC? a. Securities and Exchange Commission b. Bureau of Internal Revenue c. BankoSentralngPilipinas d. Board of Accountancy

D

8. The following qualifications of applicants for CPA licensure examination, except a. He/She is a Filipino Citizen b. He/She is of good moral character c. He/She is a holder of the degree of Bachelor of Science in Accountancy d. He/She is at least 21 years of age

C

9. To be qualified as having passed the CPA licensure examination a. The candidate must have a general weighted average of at least 75%. b. The candidate must not have a grade lower than 65% in any given subject. c. A and B d. Neither A nor B

C

10. Which of the following shall be issued to examinees who pass the CPA licensureexamination? a. Certificate of accreditation b. Personal identification card c. Certificate of registration and professional identification card d. Certificate of full compliance and PRC ID

B

11. The Board of Accountancy may issue certificate of registration and professional identification card to any successful examinee a. Of unsound mind b. Convicted by a court of political offense. c. Guilty of immoral or dishonorable conduct. d. Who has falsely represented himself/herself in his/her application forexamination

A

12. The Board of Accountancy may, after the expiration of \_____ years from the dateof revocation of a certificate of registration, reinstate the validity of a revokedcertificate of registration a.2 b.3 c.4 d.5

C

13. Who is not permitted by RA 9298 to practice public accountancy? a. A corporation, whose stockholders are all CPAs. b. A general partnership. c. A limited liability partnership d. A sole proprietorship.

D

14. If the application or registration to practice public accountancy of Tiu and Co. CPAs,was approved on April 30, 2006, the registration shall expire on a. September 30, 2008. b. September 30, 2009. c. April 30, 2009. d. December 31, 2008

B

15. A certificate of accreditation shall be issued to CPA's in public practice only uponshowing, in accordance with rules and regulations promulgated by the Board and approved by the PRC, that such registration has acquired a minimum of \___ yearsmeaningful experience in any of the areas of public practice including taxation. a.2 b.3 c.4 d.5

D

16. Which of the following organization has been recognized by the Commission on October 2, 1975 per Accreditation No. 15, a Accredited Professional Organization? a. Board of Accountancy (BOA) b. Philippine Institute of CPAs (PICPA) c. Association of CPA's in public practice (ACPAPP) d. Association of CPAs in Education (ACPAE)

B

17. The PICPA shall renew it certificate of accreditation once every a. Two years c. Four years b. Three years d. Five years

A

18. It involves a study or appraisal by the Board or its duly authorized representativesof the quality of audit of financial statements through an evaluation of the qualitycontrol measures instituted by the CPA firm to ascertain compliance with ethicaland technical standards of the public practice. a. Quality review c. Compliance audit b. Peer review d. External audit

A

19. A body created by the Board to conduct an oversight of the quality of the auditof financial statements by reviewing the firms quality control is known as: a. Quality Review Committee (QRC) b. Educational Training Committee (ETC) c. Financial Reporting Standards Council (FRSC) d. Auditing and Assurance Service Council (AASC)

A

20. For every CPE seminars or conventions attended, participant CPAs shall get a CPE credit equivalent to a. one credit unit per hour. c. three credit units per hour. b. two credit units per hour. d. five credit units per hour.

B

21. A registered professional shall be permanently exempted from CPE requirementsupon reaching the age of a. 55 years old c, 60 years old b. 65 years old d. 70 years old

C

22. A registered CPA who I working or practicing his profession or furthering abroad shall be temporarily exempted from compliance with CPE requirements during the period of his stay abroad, provided that prior to the date or renewal he has been out of the country for at least a. Four years c. Two years b. Three years d. One year

B

23. Affixing the CPA's seal and signature on the auditor's report is an indication of: a. CPA's acceptance of responsibility for the financial statements audited. b. Compliance by the CPA of the requisite accounting and auditing standards and rules. c. CPA's accreditation to practice public accountancy. d. Fair presentation of financial statements audited.

D

24. Which of the following functions to promulgate auditing standards? a. National Accredited Professional Organization b. Financial Reporting Standards Council c. ACPAPP d. Auditing and Assurance Standards Council

B

25. CPAs, firms and partnership of CPAs engaged in the practice of public accountancy including partners and staff members thereof, shall register with the Commission and the Board, such registration to be renewed every a. Three years on or before December 31 b. Three years on or before September 30 c. Two years on or before December 31 d. Two years on or before September 30

C

26. Emerald, CPA is applying for renewal of his professional license. He is exempted from the CPE requirements a. If he is at least 65 years old b. If he is working abroad and he has been out of country for at least two years immediately prior to the date of renewal c. Either A or B d. Under no circumstances

A

27. What is the legal basis of the Philippine Accountancy Act of 2004? a. RA 9298 c. Senate Bill No. 2748 b. PD 692 d. House Bill No. 6678

B

28. It is the specific organization mandated by the law to promulgate rules and regulations affecting the practice of Accountancy.

a. Professional Regulation Commission (PRC) b. Professional Regulatory Board of Accountancy (BoA) c. Philippine Institute of Certified Public Accountants (PICPA) d. Accounting Standards Council (ASC)

A

29. It is the organization created by PICPA in 1981 to formalize the accounting standard-setting function and establish generally accepted accounting principles (GAAP) in the Philippines. a. Accounting Standard Council (ASC) b. Association of the CPAs in Education (ACPAE) c. Association of CPAs in Public Practice (ACPAPP) d. Professional Regulatory Board of Accountancy (BoA)

A

30. The Accounting Standards Council (ASC) used to be composed of the nominees from all the following organizations, except a. Bureau of Internal Revenue (BIR) b. Philippine Institute of Certified Public Accountants (PICPA) c. Securities and Exchange Commission (SEC) d. BangkoSentralngPilipinas (BSP)

B

31. Pursuant to the IRR of the Philippine Accountancy Act of 2004, the Accounting Standards Council (ASC) was replaced by the a. Auditing and Assurance Standards Council (AASC) b. Financial Reporting Standards Council (FRSC) c. Association of CPAs in Education (ACPAE) d. Education Technical Council (ETC)

D

32. The number of members (including the chairman) in the Financial Reporting Standards Council. a.12 c.14 b.13 d.15

C

33. The Financial Reporting Standards Council (FRSC) is composed of nominees from all of the following, except a. Commission on Audit (CoA) b. Bureau of Internal Revenue (BIR) c. Financial Accounting Standards Board (FASB) d. Professional Regulatory Board of Accountancy (BoA)

B

34. Based on IRR, how long in years is the renewable term of the chairman and members of FRSC? a.2 c.4 b.3 d.5

D

35. The chairman of FRSC must be or must have been a senior accounting practitioner in a. Public practice c. Government or education b. Commerce and industry d. Any scope of accounting practice

D

36. It function is to assist FRSC in establishing and improving financial reporting standards in the Philippines as it issues implementation guidance on existing PFRS. a. Board of Accountancy c. Professional Regulations Commission b. Education Task Force d. Philippine Interpretations Committee

D

37. Under PAS 1, the term "PFRS" shall be comprised of a. PAS only c. PFRS and PAS b. PFRS only d. PFRS, PAS and Interpretations

B

38. The accounting body that replaced the International Accounting Standards Committee (IASC) in 2001. a. Standing Interpretations Committee (SIC) b. International Accounting Standards Board (IASB) c. Standards Advisory Council (SAC) d. Accounting Principles Board (APB)

B

39. What is the branch of accounting that is most related with the accounting sector"Association of CPAs in Commerce nd Industry (ACPACI)?" a. Public accounting c. Government accounting b. Private accounting d. Accounting education

D

40. Who is not a present member of the Professional Regulatory Board of Accountancy(BoA)? a. Atty. Eugene Mateo c. Dr. Rufo Mendoza b. Mr. Jose Tayag Jr. d. Dra. Gloria Zamora

B

41. Who is not a present member of the Financial Reporting Standards Council(FRSC)? a. David Balangue c. Gregorio Navarro b. Judith Lopez d. Ester Ledesma

A

Ledesma42. Who used to be presidents of the Association of CPAs in Education (ACPAE) thatnow serve as advisers of the said Association? a. Asser Tamayo and Jose Ireneo c. Asser Tamayo and Antonio Dayag b. Antonio and ConradoUberita d. ConradoUberita and Jose Ireneo43

D

43. The Philippine Accountancy Act of 2004—shall provide and govern: a. The standardization and regulation of accounting education. b. The examination for registration and Certified Public Accountants. c. The supervision, control and regulation of the practice of accountancy in the Philippines. d. All of the answers.

D

44. Which organization(s) has/have the primary duty of effective enforcing the provisions of RA 9298? I. Professional Regulatory Board of Accountancy II. Department of Justice III. Professional Regulation Commission IV. Philippine Institute of Certified Public Accountants a. I and II b. II and III c. I, III and IV d. I and II

C

45. A professional identification card has a validity of: a. 1 year b. 2 years c. 3 years d. 4 years

D

46. CPAs may practice public accountancy under the following forms of organization, except: a. Sole proprietorship c. Limited liability partnership b. General partnership d. Corporations

B

47. This is the traditional service provided by CPA firms. a. Compilation. b. Audits. c. Reviews d. Tax services

C

48.Alllicensed CPAs shall obtain and use a seal of a design prescribed by the a. Accounting Standards Council. c. Board of Accountancy b. Philippine Institute of CPAs. d. PRC

D

49. The CPA shall be required to indicate which of the following numbers on the documents he/she signs, uses or issues in connection with the practice of the profession: a. CPA Certificate of Registration number. b. Professional Identification Card. c. Professional tax receipt. d. All of these are required to be indicated

D

50. The amount of audit fees depend largely on the: a. Size and capitalization of the company under audit. b. Amount of the profit for the year. c. Availability of cash. d. Volume of audit work and degree of competence and responsibility involved.

A

51. The practice of accountancy includes the following, except: a. Being appointed as the marketing manager of a business enterprise. b. Serving as edit examiner for the Commission on Audit. c. Working as the Dean of a College that grants a degree of BS Accountancy. d. Provision of assurance services to more than one client and on a fee basis

B

52. All graduates with a Bachelor's Degree in Accounting shall be allowed to take the CPA Licensure Examination within two years from the effectivity of RA 9298 under the rules and regulations to be promulgated by the BIA subject to the approval by the PRC. a. 1 year b. 2 years c. 3 years d. 4 years

B

53. According to the IRR, this council is tasked to assist the BOA in continuously upgrading accountancy education in the Philippines to make the Filipino CPAs globally competitive. a. Quality Review Committee c. CPE council b. Education Technical Council d. CHED

B

The Education Technical Council shall be composed of

a. Six members.

b. Seven members with a chairman.

c. Seven members with a chairman and a vice-chairman.

d. Eight members with a chairman, a vice-chairman, and a secretary.

C

55. Unless there's a valid reason to have additional representation, the PICPA shall have how many national directors? a.12 b.14 c.15 d.20

D

56. The PICPA national directors shall be apportioned according to four geographic sectors based on the ratio of latest available number of members in good standing from those areas. Which of the following is NOT a geographic sector? a. Luzon b. NCR c. Mindanao d. CAR

A

57. A PICPA director can only represent a sector in a region if he/she has been a member in good standing in such sector in the region for at least \_____ years at the same time of his/her nomination: a. Two years b. Three years c. Four years d. Five years

B

58. Sectoral Organization have been established to promote the interests of groups of professional accountants. Which of the following is the sectoral organization forCPAs in Public Practice? a. GACPA. b. ACPAPP. c. ACPACI. d. ACPAE.

C

59. Monitoring the compliance with CPE requirements is done by the PRC CPE Council. The PRC CPE Council shall be composed of: a. A chairperson and three members b. A chairperson, vice-chairperson and two members c. A chairperson and two members d. A chairperson, vice-chairperson and three members

?

60. Regarding practice of accountancy, which of the following certificates is issued to a successful passer of the CPA Board Exams first, a certificate of registration or a certificate of accreditation? a. Certificate of registration. c. Both are issued at the same time. b. Certificate of accreditation. d. Neither are issued to CPAs.

D

61. S1 A registered professional who is working abroad shall be temporarily exemptedfrom compliance with CPE requirements during his/her stay abroad, provided S2 Those who failed to renew professional licenses for a period of three continuousyears from initial recognition, or from last renewal, shall be declared delinquent. a. True, true b. True, false c. False, true d. False, false

D

62. As used in RA 9298, this term refers to the area of practice of accountancy: a. Line b. Section c. Segment d. Sector

D

63. The practice of accountancy includes the following except: a. Practice in public accountancy. b. Practice in education or the academe. c. Practice in the government. d. Practice in commerce and industry, when the CPA is appointed as marketing of the enterprise.

D

64. This organization administers, implements and enforces the regulatory policies of the Philippine Government with respect to the regulation and licensing of the various profession under its jurisdiction, one of which is accountancy. a. BOA b. PICPA c. COA d. PRC

A

65. Who is the person that has the authority to suspend or remove a member of the BOA, on valid grounds and after due process? a. The President of the Republic of the Philippines. b. The Chairman of the Professional Regulatory Board of Accountancy, unless he is one who is under investigation. c. The Commissioner of the Professional Regulation Commission. d. None of them.

C

66. The following are grounds for suspension or removal of members of the Board of Accountancy, except: a. Neglect of duty or incompetence. b. Violation or tolerance of any violation of RA9298 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.

D

67. CPAs may practice public accountancy under the following forms of organization,except: a. Sole proprietorships c. Limited liability partnerships b. General partnerships d. Corporations

A

68. The names under which a CPA practices the profession must: a. Not be misleading as to the form of organization. b. Contain more than three names. c. Indicate any specialization. d. Include one fictitious name.

B

69. A (n) \___________ shall do business under their respective duly registered andauthorized firm name appearing in the registration documents issued by the Departmentof Trade and Industry or any other proper government office .a. Individual CPA b. Firm c. Partnerships of CPAs. d. Corporations of CPAs

C

70. All licensed CPAs shall obtain and use as seal of a design prescribed by the a. Accounting Standards Council. b. Philippine Institute of CPAs. c. Board of Accountancy. d. Professional Regulation Commission.

D

71. Which of the following cannot be mentioned by an author in publicizing a book in accounting? a. Name b. Qualifications c. Membership in professional organization d. Services that the author's firm provides

D

72. A professional accountant may invite the following to attend training courses and seminars conducted for the assistance of staff (select the exception): a clients b. staff of the firm c. other professional accountants d. potential clients

D

73. Regarding anniversaries, a firm may undertake press releases or other media releases to commemorate their anniversaries in public practice only every: a. year b. 3 years c. 4 years d. 5 years

B

74. This acts provides that only licensed professionals may teach licensure subjects, and provides for the triennial renewal of the Professional Identification Card: a. RA no. 9298 b. PRC Modernization Act c. IRR of RA 9298 d. PD 1081

C

75. The accreditation granted for accounting teachers is valid for: a. 1 year b. 2 years c. 3 years d. 4 years

D

76. It function is to assist FRSC in establishing and improving financial reporting standards in the Philippines as it issues implementation guidance on existing PFRS. a. Board of Accountancy c. Professional Regulations Commission b. Education Task Force d. Philippine Interpretations Committee

D

77. S1 A registered professional who is working abroad shall be temporarily exemptedfrom compliance with CPE requirements during his/her stay abroad, provided S2 Those who failed to renew professional licenses for a period of three continuous years from initial recognition, or from last renewal, shall be declared delinquent. a. True, true b. True, false c. False, true d. False, false

D

78. The following are regarded by RA9298 as CPA services in public practice if offered or rendered on afee basis and to more than one client:

Preparation and signing of audit reports.Professional assistance on accounting procedures.Representation of clients before governmental agencies on tax and other matters regardless of its relation to accounting

\
a.YES YES YES b. YES NO YES c.YES NO NO d. YES YES NO

A

79. Which of the following statements is correct? a. The chairman and members of the Board shall receive compensation and allowances comparable to that being received by the chairman and members of the existing regulatory boards under the PRC as provided for in the General Appropriations Act. b. No person shall serve in the Board for more than nine years. c. The BOA chairmanhas the sole power to administer oaths in connection with the administration of the accountancy law. d. The Board shall be under administrative supervision of the PICPA.

D

80. This organization administers and implements and enforces the regulatory policies of the Philippine Government with respect to the regulation and licensing of the various profession under its jurisdiction, one of which is accountancy. a. BOA b. PICPA c. COA d. PRC

D

81. May a CPA give a brochure to a non-client? a. No, because this is a violation of the revised rules on advertising. b. Yes, since this is acceptable under revised rules on advertising. c. No, unless the non-client becomes a client within 10 days from receipt of the brochure. d. Yes, if the non-client has made an unsolicited request.

D

82. Which if the following partner profile information may be posted in a firm's website? a. Name b. Educational attainment and brief listing of services c. Postal address, telephone, fax, and email-address d. All of these may be posted in a form's website

D

83. Regarding anniversaries, a firm may undertake press releases of other media releases to commemorate their anniversaries I public practice only every: a. Year b. 3 years c. 4 years d. 5 years

C

84. The accreditation granted for accounting teacher is valid for: a. 1 year b. 2 years c. 3 years d. 4 years

C

85. The constitution of the Philippines requires this office to "keep the general accounts of the Government and for such period as may be provided by law, preserve the vouchers pertaining thereto." a. National Accounting Office b. Ministry of Finance c. Commission on Audit d. Accounting Units

A

86. A CPA firm usualy offers non-aduit services, such as management advisory services. Its pimary purpose is to: a. Furnish professional advice and assistance which will enable the client to improve operation b.Keep the CPA firmcompetitive with other firms. c.Establish the firm as a consultant, thus ensuring its future expansion and growth. d.Permit the firm's staff members to acquire expertise in other areas of practice

A

87. Under this method of building a client, the external auditors charges on the basis of actual time spent by principals/partners,supervisors ,seniors and juniors at predetermined rates agreed upon with the client a. Per diem basis. c. flat fee or flat sum basis b. retainer basis. d. maximum fee basis

B

88. the following are grounds for the suspension or revocation of certificate of registration and professional identification card, excert:

a.Possession of an unsound mind

b. Practice in more than one field of accountancy

c.Conviction of a criminal offense involving moral turpituded.

d. Unprofessional or unethical conduct, malpractice, or violation of RA9298.