University of Perpetual Help System Dalta

Auditing Theory RJ CARASCO

Quiz

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

2. The Philippine Accountancy Act of 2004 shall provide for and govern:
a. The supervision, control, and regulation of the practice of accountancy in the Philippines.
b. The standardization and regulation of accounting education.
c. The examination for registration of certified public accountants.
d. All of the above

3. The document that contains the norm and principles governing the practice of the accountancy
profession in the highest standards of ethical conduct
a. RA 9298
b. Code of Ethics for CPAs in the Philippines
c. IRR to RA 9298
d. PSA 220 on Quality Control

4. The following statements relate to some of the provisions of RA 9298. Which is correct?
a. Audit working papers are generally the property of the company whose financial statements were
audited.
b. After three (3) years, subject to certain conditions, the Board of Accountancy may order the
reinstatement of a CPA whose certificate of registration has been revoked.
c. The penal provision (Sec. 36) of RA 9298 applies only to the violation of any of the provisions of RA
9298 because its Implementing Rules and Regulations are unenforceable.
d. It shall be the primary duty of the PRC and the BOA to effectively enforce the provisions of RA
9298.

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

6. The area of practice of accountancy namely public accountancy, commerce and industry, academe /
education and government are called:
a. Sectors b. Scope of practice of accountancy c. Section d. Segment

7. As used in RA 9298, this term refers to the area of practice of accountancy:

a. Segment b. Line c. Sector d. Section

8. A Certified Public Accountant or CPA is:

a. A person who holds a valid Certificate of Registration issued by the PRC
b. A person who holds a valid professional Identification Card issued by the PRC
c. A person who holds a valid Certificate of Registration and a valid Professional Identification Card
issued by the PRC
d. A person who is engaged in the practice of public accountancy

9. A CPA is in public accounting practice when he/she:

a. Holds, or is appointed to, in an accounting professional group in government or in a government-
owned and/or controlled corporation where decision making requires professional knowledge in the
science of accounting.
b. Represents his/her clients before government agencies on tax and other matters related to
accounting.
c. Represents his/her employer before government agencies on tax and other matters related to
accounting.
d. Teaches accounting, auditing, management advisory services, accounting aspect of finance, business
law, taxation, and other technically related subjects.

10. Which of the following statements concerning the practice of accountancy in commerce and
industry is incorrect?
a. A CPA is in the practice of accountancy in commerce and industry when he/she is involved in decision
making requiring professional knowledge in the science of accounting, as well as the accounting aspects
of finance and taxation.
b. A CPA is in the practice of accountancy in commerce and industry when he/she renders
professional services as a Certified Public Accountant to more than one client on a fee basis.
c. A CPA is in the practice of accountancy in commerce and industry when he/she represents his/her
employer before government agencies on tax and other matters related to accounting.
d. A CPA is in the practice of accountancy in commerce and industry when such employment or position
requires that the holder thereof must be a Certified Public Accountant.

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

a. A person holding out himself as one skilled in the knowledge, science and practice of accounting and
as a qualified person to render professional services as a CPA to more than one client.
b. A person is appointed as a marketing director of a government owned and controlled corporation.
c. A person in educational institution teaching accounting, auditing, business law, taxation or other
technically related subjects.
d. A person representing his/her employer before government agencies on tax and other accounting
related matters.

12. Which of the following statements concerning the practice of accountancy in the
academe/education is incorrect?
a. Members of the Integrated Bar of the Philippines are not allowed to teach business law and
taxation subjects.
b. The position of either the Dean or the Department Chairman or its equivalent that supervises the
Bachelor of Science in Accountancy program of an educational institution is deemed to be in practice of
accountancy in the academe/education.
c. CPAs are allowed to teach business law subjects.
d. The position of either the Dean or the Department Chairman or its equivalent that supervises the
Bachelor of Science in Accountancy program of an educational institution must be occupied only by a
duly registered CPA.

13. Which of the following statements concerning the practice of accountancy is correct?
a. A CPA is in the practice of accountancy in the government when he/she is involved in the audit or
verification of financial transactions and accounting records of his/her clients.
b. A CPA is in public accountancy when he/she renders his/her professional services as a CPA to more
than one client on a fee basis in the design, installation, review, and revision of accounting systems
and controls.
c. A CPA is in the practice of accountancy in the academe/education when he/she is in an educational
institution teaching any of the subjects included in the BSA curriculum.
d. A CPA is in the practice of accountancy in commerce and industry when his/her position requires civil
service eligibility as a Certified Public Accountant.
14. Which is not permitted by RA 9298 to practice public accountancy?
a. A CPA in individual capacity.
b. A sole proprietorship.
c. A general partnership.
d. A corporation, whose stockholders are all CPAs.

15. Which is permitted by RA 9298 to practice public accountancy?

a. A corporation whose stockholders are all CPAs
b. A corporation whose some of stockholders are CPAs
c. Limited liability partnership
d. A non-stock corporation whose members are all CPAs

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

17. A certificate of accreditation shall be issued to CPA's in public practice only upon showing, in
accordance with rules and regulations promulgated by the BOA and approved by the PRC, that such
registration has acquired a:
a. Minimum of 3 years meaningful experience in any of the areas of practice of accountancy including
taxation.
b. Minimum of 3 years meaningful experience in any of the areas of practice of accountancy.
c. Minimum of 3 years meaningful experience in any of the areas of public practice including taxation.
d. Minimum of 3 years meaningful experience in any of the areas of public practice excluding taxation.

18. The minimum meaningful experience in public accountancy as required by RA 9298 shall include:
a. At least one year as audit assistant and at least one year as auditor in charge.
b. At least one year as audit assistant and at least two years as auditor in charge.
c. At least two years as audit assistant and at least two years as auditor in charge.
d. At least two years as audit assistant and at least one year as auditor in charge.
19. Any position in any business or company in the private sector which requires supervising the
recording of financial transactions, preparation of financial statements, coordinating with the external
auditors for the audit of such financial statements and other related functions shall be occupied only by
a duly registered CPA if the business or company where the above position exists has
a. An annual revenue of at least P5,000,000.00
b. A total asset of at least P10,000,000
c. A paid-up capital of at least P10,000,000.00
d. A paid-up capital of at least P5,000,000.00

20. Individual CPAs, Firms or Partnerships of CPAs, including partners and staff members thereof shall
register with the BOA and the PRC. If the application for registration of AB and Co., CPAs was approved
on August 30, 2005, the registration will expire on
a. Sept. 30, 2007 b. Dec. 31, 2007 c. Dec. 31, 2008 d. Aug. 30, 2007

21. CPAs, firms and partnerships of CPAs engaged in the practice of public accountancy including
partners and staff members thereof, shall register with the PRC and the BOA, 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

22. Based on R.A. 9298, how many years can a partner who survived the death or withdrawal of other
partner(s) continue to practice under the partnership name after becoming a sole practitioner?
a. 1 year b. 2 years c. 3 years d. Indefinite period of time

23. Which of the following is not one of the qualifications of the members of the Board of Accountancy?
a. He/She must not be a director or officer of PICPA at the time of his appointment.
b. He/She must be a natural-born citizen and a resident of the Philippines.
c. He/She must be a duly Certified Public Accountant with at least ten years of experience in practice
of public accountancy.
d. He/She must not have any direct or indirect pecuniary interest in any school, college, university, or
institution offering a BS Accountancy course or institution conducting review classes in preparation for
the licensure examination at the time of his appointment to the Board.

24. Which of the following is not one of the qualifications of the members of the Board of Accountancy?
a. Must be a natural-born CPA and a resident of the Philippines.
b. Must be a duly registered Certified Public Accountant with at least ten years of experience in practice
of accountancy.
c. Must be of good moral character.
d. Must not have been convicted of crimes involving moral turpitude.

25. No person shall serve the Professional Regulatory Board of Accountancy for more than:
a. 3 years b. 6 years c. 9 years d. 12 years

26. The President of the Philippines, upon the recommendation of the Commission, may suspend or
remove any member of the Board of Accountancy. Which of the following is not a valid ground for
suspension or removal of members of the Board of Accountancy?
a. Neglect of duty or incompetence
b. A member of the Board manipulated the CPA licensure examination results.
c. A member of the Board has been sued of crimes involving moral turpitude.
d. A member of the Board has violated RA 9298.

27. Which statement is correct regarding the term of office of the chairman and the members of the
Board of Accountancy (BOA)?
a. A person may serve in the Board of Accountancy for eight consecutive years.
b. No person who has served three (3) successive complete terms shall be eligible for reappointment
until the lapse of one (1) year
c. Appointment to fill up an unexpired term is to be considered a complete term.
d. No person shall serve in the Board for more than 10 years.
28. Which of the following is not one of the functions of the Board of Accountancy specifically provided
under the RA 9298?
a. To monitor the conditions affecting the practice of accountancy and adopt such measures deemed
proper for the enhancement and maintenance of high professional, ethical, accounting and auditing
standards.
b. To make investigations as it deems necessary to determine whether any person has violated any
provisions of this law or any standards promulgated by the Board as part of the rules governing the
practice of accountancy
c. To delegate its power and function to determine and prepare test questions for the CPA licensure
examination.
d. To conduct an oversight into the quality of audits of financial statements through a review of the
quality control measures.
29. Which is the least function of the Board of Accountancy?
a. To prepare, adopt, issue or amend syllabi at the subjects for examinations in consultation with the
academe.
b. To investigate violations of the RA 9298
c. To prepare questions for the CPA licensure examination which shall strictly within the scope of the
syllabi of the subjects for examination.
d. To supervise PICPA.
30. The following statements relate to the RA 9298. Which statement is true?
a. The Professional Regulation Commission has the authority to remove any member of the Board of
Accountancy for negligence, incompetence, or any other just cause.
b. No person shall be appointed as a member of the Board of Accountancy unless he has been in the
practice of accountancy for at least 10 years, among others.
c. Insanity is not a ground for proceeding against a CPA.
d. After three years, subject to certain conditions, the Board of Accountancy may order the
reinstatement of a CPA whose certificate of registration has been revoked.

31. Which of the following is not a function of the Board of Accountancy?

a. To supervise the registration, licensure and practice of accountancy in the Philippines
b. To prescribe and/or adopt a code of ethics for the practice of accountancy
c. To issue, suspend, revoke, or reinstate the certificate of registration for the practice of the
accountancy profession
d. To adopt an official seal of the Commission.
32. The person authorized to remove a member of BOA on valid grounds and after due process is:
a. The Commissioner of the PRC.
b. The Chairman of BOA, unless he is the one under investigation.
c. The President of the Philippines.
d. Congress of the Philippines.

33. The following are the grounds for suspension or removal of members of BOA, except
a. Neglect of duty.
b. Incompetence.
c. Violation of the CPAs Code of Ethics.
d. Pending case involving moral turpitude.

34. Which of the following statements about the composition of the Board of Accountancy is incorrect?
a. The Board shall be composed of a chairman and six members.
b. The members of the Board shall be appointed by the President of the Philippines from a list of three
recommendees for each position and ranked by the Commission from a list of five nominees for each
position submitted by Accredited Professional Organization or PICPA.
c. The Board shall elect a chairman from among its members to serve for a term of one year.
d. If the APO fails to submit its nominees within 60 days prior to the expiry of the term of an incumbent
chairman or member, the Commission in consultation with the Board shall submit to the president a list
of three nominees for each vacant position.

35. Who has the power to suspend or remove any member of the Board of Accountancy?
a. The Chairman of the FRSC
b. The Chairman of the PRC
c. The Chairman of the AASC
d. The President of the Philippines

36. This standard setting body shall have a chairman who had been or presently a senior accounting
practitioner in any of the scope of accounting practice.
a. PICPA b. ACPAPP c. FRSC d. AASC

37. This standard setting body shall have a chairman who had been or presently a senior accounting
practitioner in public accountancy.
a. BOA b. AASC c. FRSC d. ACPAE

38. The Chairman and the members of the FRSC and AASC shall have a term of
a. 1 year b. 3 years c. 5 years d. 6 years

39. The following statements relate to the term of office of the Chairman and members of the Board of
Accountancy (BOA). Which is false?
a. The Chairman and members of the BOA shall hold office for a term of three (3) years.
b. Any vacancy occurring within the term of a member shall be filled up for the unexpired portion of the
term only.
c. Appointment to fill up an unexpired term is not to be considered as a complete term.
d. No person who has served two successive complete terms as chairman or member shall be eligible
for reappointment until the lapse of two (2) years.
40. The Board of Accountancy shall elect a vice-chairman from among its members for a term of
a. Two (2) years b. One (1) year c. Three (3) years d. Five (5) years

41. According to Section 9(A) of the IRR, the Commission upon the recommendation of the Board shall
create an accounting standard setting body to be known as the
a. Accounting Standards Board
b. Accounting Standards Council
c. Financial Reporting Standards Council
d. Financial Reporting Standards Board

42. The Financial Reporting Standards Council shall be composed of

a. 8 members b. 14 members c. 15 members d. 17 members

43. According to Section 9(A) of the IRR, the Commission upon the recommendation of the Board, shall
create an auditing standard setting body to be known as the
a. Auditing and Assurance Standards Council (AASC)
b. Auditing Standards Board
c. Auditing Standards Council
d. Auditing Standards and Practices Council (ASPC)

44. The Auditing and Assurance Standards Council (AASC) shall be composed of
a. 8 members b. 14 members c. 15 members d. 17 members

45. Which of the following does not have representation in the Financial Reporting Standards Council
(FRSC)?
a. Board of Investments (BOI)
b. Philippine Institute of CPAs (PICPA)
c. Bureau of Internal Revenue (BIR)
d. Board of Accountancy (BOA)

46. The following are represented both to the Financial Reporting Standards Council (FRSC) and Auditing
and Assurance Standards Council (AASC), except:
a. BangkoSentral ng Pilipinas
b. Bureau of Internal Revenue
c. Securities and Exchange Commission
d. Board of Accountancy

47. Which of the following functions to promulgate auditing standards?

a. National Accredited Professional Organization
b. Financial Reporting Standards Council
c. Auditing and Assurance Standards Council
d. ACPAPP

48. The auditing standard setting body created by the Board of Accountancy is known as
a. Accounting Standards Council (ASC)
b. Financial Reporting Standards Council (FRSC)
c. Auditing Standards and Practices Council (ASPC)
d. Auditing and Assurance Standards Council (AASC)
49. Which of the following statements about Accounting Standard Setting Council is false?
a. The accounting standard setting body is to be known as Financial Reporting Standards Council (FRSC).
b. The Accounting standard setting body shall be composed of a chairman and fourteen members.
c. The public accounting practice is the sector that is most represented in the accounting standard
setting council.
d. The chairman and members of the standard setting council shall be appointed by the Commission
upon the recommendation of the Board in coordination with APO.

50. The sector that is most represented in the AASC is the:

a. Commerce and Industry b. Academe c. Public Practice d. Government

51. Which of the following statements is correct about AASC?

a. The AASC shall be composed of a chairman and six members.
b. The chairman and members of the AASC shall be appointed by the President of the Philippines from a
list of three recommendees ranked by the Commission from the list of 5 nominees for each position
submitted by APO.
c. The chairman and members of the AASC shall have a term of three years renewable for another
term.
d. The AASC shall elect a Vice-Chairman from among its members for a term of one year.

52. Which of the following statements about Accounting Standard Setting Council is false?
a. The accounting standard setting body is to be known as Financial Reporting Standards Council (FRSC).
b. The Accounting standard setting body shall be composed of a chairman and fourteen members.
c. The chairman and members of the standard setting council shall be appointed by the Commission
upon the recommendation of the Board in coordination with APO.
d. The public accounting practice is the sector that is most represented in the accounting standard
setting council.

53. Educational Technical Council (ETC) differs from accounting and auditing standard setting councils in
that
a. The chairman and members of ETC are appointed by the Commission.
b. The chairman of ETC must have been or presently a senior accounting practitioner in
Academe/Education.
c. ETC is composed of 15 members with a chairman.
d. The chairman and members of ETC have a three year term renewable for another term.

54. Which of the following is not one of the functions of ETC?

a. Determine a minimum standard curriculum for the study of accountancy to be implemented in all
schools offering BS Accountancy.
b. Establish teaching standards, including the qualifications of the members of the faculty of schools and
colleges of accountancy.
c. Monitor the progress of the program on the study of accountancy and undertaking measures for the
attainment of a high quality accountancy education in the country.
d. Recommend to the BOA the revocation of the Certificate of Registration and the professional
identification card of an individual CPA or CPA firm including any of their members who have not
observed the quality control measures or who have not complied with the standards of quality
prescribed for the practice of public accountancy.
55. Which of the following is not a requisite in applying for the CPA licensure examinations?
a. Good moral character
b. Natural-born citizen of the Philippines
c. Holder of the degree of Bachelor of Science in Accountancy
d. Has not been convicted of any criminal offense involving moral turpitude

56. An applicant for the CPA licensure examination should be

I. A Filipino citizen
II. Of good moral character
III. A holder of the degree of Bachelor of Science in Accountancy
a. I and II only b. I and III only c. II and III only d. I, II, and III

57. The following documents shall be submitted by applicants for the CPA licensure examination, except
a. Certificate of Live Birth in National Statistics Office (NSO) security paper.
b. Marriage contract in NSO security paper for married male applicants.
c. NBI clearance.
d. Transcript of records with indication therein of date of graduation and Special Order number unless it
is not required.

58. A candidate who obtains the rating of seventy-five percent (75%) and above in at least a majority of
the subjects shall receive a conditional credit for the subjects passed. He/she shall take an examination
in the remaining subjects within
a. One (1) year from the preceding examination.
b. Two (2) years from the preceding examination.
c. Three (3) years from the preceding examination.
d. Five (5) years from the preceding examination.

59. Which of the following statements is correct?

a. Any candidate who fails in two (2) complete CPA board examinations will no longer be allowed to
take another set of examinations.
b. Any candidate who fails in two (2) complete CPA board examinations shall be disqualified from
taking another set of examinations unless he/she submits evidence to the satisfaction of the Board
that he/she enrolled in and completed at least twenty-four (24) units of subjects given in the licensure
examination.
c. The examination in which the candidate was conditioned and the removal examination oh the subject
in which he/she failed shall be counted as two (2) complete examinations.
d. The refresher course should be completed within two (2) years from the preceding examination.

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

61. 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

62. Any candidate who fails in 2 complete CPA Board Examinations shall be disqualified from taking
another set of examination unless he or she submits evidence to the satisfaction of the Board that
a. He/She enrolled in and completed at least 24 units of subjects given in the licensure examination.
b. He/She enrolled the subjects given in the CPA Board Examination in the regular course offering.
c. He/She is ready to take another set of examination.
d. He/She enrolled in an educational institution offering or conducting review classes in preparation for
CPA Board Examination.

63. The following statements relate to CPA examination ratings. Which of the following is incorrect?
a. To pass the examination, candidates should obtain a general weighted average of 75% and above,
with no rating in any subject less than 65%.
b. Conditioned candidates shall take an examination in the remaining subjects within two years from the
preceding examination.
c. Candidates who obtain a rating of 75% and above in at least four subjects shall receive a conditional
credit for the subjects passed.
d. Candidates who failed in four complete examinations shall no longer be allowed to take the
examinations the fifth time.

64. The following statements relate to the rating in the CPA licensure examination. Identify the incorrect
statement.
a. A candidate must have a general weighted average of at least 75% with no grades lower than 65% in
any given subject in order to pass the CPA licensure examination.
b. In the event a candidate obtains a rating of 75% and above in at least a majority of the subjects,
he/she shall receive a conditional credit for the subject passed.
c. A candidate who receives a conditional credit shall take an examination on the remaining subjects
within two years from the preceding examination.
d. A candidate who gets a conditional credit and takes an examination on the remaining subjects must
get an average of at least 75% on the subjects reexamined and at least 65% in each of the subjects
reexamined.

65. The following are grounds for the suspension or revocation of certificate of registration and
professional identification card, except:
a. Unprofessional or unethical conduct.
b. Practice in more than one field of accountancy.
c. Possession of unsound mind.
d. Conviction of a criminal offense involving moral turpitude.

66. The following are grounds for refusal to issue a certificate of registration and professional
identification card to any successful examinee except:
a. Guilty of immoral and dishonorable conduct.
b. Conviction for a political offense.
c. Unsound mind.
d. Conviction of a criminal offense involving moral turpitude.

67. A CPA whose certificate has been revoked:

a. Has committed a crime involving moral turpitude.
b. Is required to take the CPA Board Licensure examinations before reinstatement.
c. May be reinstated by the BOA after the expiration of 2 years from the date of revocation.
d. Can no longer be reinstated as a CPA.

68. 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 for examination.

69. The Board of Accountancy may, after the expiration of ____ years from the date of revocation of a
certificate of registration, reinstate the validity of a revoked certificate of registration.
a. 2 b. 3 c. 4 d. 5

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

END